[Federal Register Volume 67, Number 176 (Wednesday, September 11, 2002)]
[Proposed Rules]
[Pages 57543-57549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-22439]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AL22


Accelerated Payments Under the Montgomery GI Bill--Active Duty 
Program

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the regulations governing 
various aspects of the educational assistance programs the Department 
of Veterans Affairs (VA) administers in order to implement some of the 
provisions of the Veterans Education and Benefits Expansion Act of 
2001. These provisions include accelerated payments to individuals 
under the Montgomery GI Bill--Active Duty program who are enrolled in 
approved training programs that lead to

[[Page 57544]]

employment in high tech industries and whose charged tuition and fees 
exceed an amount equal to 200 percent of the monthly rate of basic 
educational assistance allowance otherwise payable. This document also 
proposes to amend the regulation defining educational institution to 
include certain private technology entities.

DATES: Comments must be received on or before November 12, 2002.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Avenue, NW., Room 1154, Washington, DC 20420; or fax comments 
to (202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AL22''. All written comments received will be available for public 
inspection at the above address in the Office of Regulations 
Management, room 1158 between the hours of 8:00 a.m. to 4:30 p.m., 
Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Lynn M. Cossette, Education Advisor, 
Education Service, Veterans Benefits Administration, 202-273-7294.

SUPPLEMENTARY INFORMATION: The Veterans Education and Benefits 
Expansion Act of 2001 (Pub. L. 107-103) (the ``Act'') contains 
provisions that allow the Department of Veterans Affairs (VA) to make 
accelerated payments under the Montgomery GI Bill--Active Duty program. 
Individuals can elect to receive an accelerated payment only when they 
are enrolled in an approved program of education that leads to 
employment in a high technology industry (as determined by the 
Secretary) and are charged tuition and fees for enrollment that exceed 
200 percent of the monthly rate of basic educational assistance 
allowance otherwise payable.
    Public Law 107-103 directs VA to prescribe regulations to carry out 
the provisions allowing accelerated payments. Since the term ``high 
technology industry'' is not defined in the statute, VA must define by 
regulation what industries qualify as high technology industries. This 
definition is included in this proposed rule. To arrive at its proposed 
definition of ``high technology industry,'' VA considered how other 
federal agencies determine what industries are considered high 
technology industries. For instance, in a June 1999 Monthly Labor 
Review Report, ``High-technology employment; a broader view,'' Dr. 
Daniel Hecker, an economist in the Office of Employment Projections, 
Bureau of Labor Statistics (BLS), considered an industry to be ``high 
tech'' if employment in both research and development and in all 
technology-oriented occupations accounted for a proportion of 
employment that was at least twice the average for all industries in 
the Occupational Employment Statistics survey. This resulted in 29 
industries being identified as high technology industries. Ten of the 
29 are considered to be high technology intensive industries because 
the ratios of employment in both research and development and in all 
technology oriented occupations is at least 5 times the average for all 
industries. We spoke to Dr. Hecker. He indicated that a report by the 
National Science Foundation (NSF), ``Science and Engineering Indicators 
2000,'' includes a good list of 10 advanced technology industries that 
are high tech. He stated the NSF list is similar to the 10 high 
technology intensive industries identified in his report.
    The NSF list of advanced technologies is based on the U.S. Bureau 
of the Census classification system for exports and imports of products 
that embody new or leading-edge technologies.
    VA also considered the pertinent legislative history of Pub. L. 
107-103 regarding accelerated MGIB payments. For instance, Chairman 
Rockefeller (D-WV), Senate Veterans Affairs Committee, original sponsor 
of the bill (S. 1088) enacted as Pub. L. 107-103, explained that the 
accelerated payment provision ``would allow veterans to use their 
Montgomery GI Bill educational benefits to pay for short-term, high 
technology courses that would allow veterans to earn the credentials 
they need to gain entry to today's civilian-sector careers.'' 147 Cong. 
Rec. S12,395 (daily ed. Dec. 5, 2001) (statement of Chairman 
Rockefeller). He further stated, ``many veterans are pursuing forms of 
nontraditional training, such as short-term courses that lead to 
certification in a technical field. These courses often last just a few 
weeks or months, and can cost many of thousands of dollars.'' Id.
    The Committee report (S. Rep. No. 107-86) (2001) accompanying S. 
1088 does not define which technology fields would be covered by the 
bill, but indicates that the bill authorizes the Secretary of Veterans 
Affairs to determine which courses are applicable. The report makes 
reference to Microsoft, Cisco, and other technical training. 
Additionally, it reflects that the Congressional Budget Office 
estimated the bill's costs based on short-term, high-cost, information 
technology courses.
    Nevertheless, the Act itself does not contain language limiting 
accelerated payment to short-term high-cost information technology 
courses. Nor does it limit accelerated payment to nontraditional 
training, or to programs or courses that lead to certification in a 
technical field.
    After considering all the above information, including especially 
Dr. Hecker's recommendation, we propose to use the listing in the 
Science and Engineering Indicators 2000 report to define the industries 
that will be considered ``high-tech'' for accelerated payment purposes. 
We believe this listing is the most accurate on leading-edge 
technologies. The list includes the following industries:
    [sbull] Biotechnology;
    [sbull] Life Science Technologies;
    [sbull] Opto-Electronics;
    [sbull] Computers and Telecommunications;
    [sbull] Electronics, Computer-Integrated Manufacturing;
    [sbull] Material Design;
    [sbull] Aerospace;
    [sbull] Weapons; and
    [sbull] Nuclear Technology.

    We further propose the list of industries that we define as high 
technology industries include any advanced technologies listed in 
future Science and Engineering Indicators reports published by the NSF. 
The National Science Board (the governing board of the National Science 
Foundation) is responsible, by law, to publish the Science and 
Engineering Indicators Report on a biennial basis. By using the list in 
this biennial report, VA will stay current in our definition of high 
technology industries.
    Moreover, our proposed regulations define ``employment in a high 
technology industry''. We are doing so because the Act states that, in 
order to be eligible for accelerated payment, the individual's program 
of education must lead to employment in a high technology industry. Of 
the numerous employment positions that may be found in a high 
technology industry, many are common to all industries, not just high 
technology industries. We believe, however, that the Act, by its terms 
in their context, reasonably should be read as limiting accelerated 
payments to pursuit of programs that lead to high-technology-specific 
occupations. Thus, to give meaning to the term ``employment in a high 
technology industry'' as used in the Act, we propose to define that 
term to mean employment in a high technology

[[Page 57545]]

occupation specific to a high technology industry.
    The Act further provides that VA will prescribe regulations to 
include the requirements, conditions, and methods for the request, 
issuance, delivery, certification of receipt and use, and recovery of 
overpayment of an accelerated payment.
    In our proposed rule, we propose to make accelerated payments 
similar to the way we currently make advance payments under section 
3680(d)(4) of title 38, United States Code. Using this method, payment 
is drawn in the student's name and VA mails the payment directly to the 
educational institution for delivery to the student. We propose that 
upon delivery of payment, the educational institution shall submit 
certification of delivery to the Secretary. VA will provide a form for 
this certification. We further propose that the educational institution 
shall return the accelerated payment to VA within 30 days if the 
payment is not delivered to the student.
    If the educational institution does not agree to accept accelerated 
payments, we propose that the educational institution must wait until 
the student begins classes before it submits enrollment information to 
VA. In this instance, VA proposes to make payment directly to the 
student via electronic funds transfer (EFT) to the eligible 
individual's bank account. By using EFT, recipients will receive the 
accelerated payment sooner than by regular mail, with minimal risk of 
it being lost or stolen. If the student does not have a bank account or 
objects to payment by EFT, VA will issue a check to the student's 
mailing address.
    In our proposed rule, we propose requiring that the individual 
requesting the accelerated payment must verify that payment was 
received and used, and that the course was (or courses were) completed. 
We propose collecting this information by a certification form to be 
submitted by the individual at the end of the term, quarter, semester, 
or the end of the enrollment period for those courses not on a term, 
quarter, or semester basis. The proposed rule requires that VA must 
receive the information within 60 days of the end of the enrollment 
period or VA will establish and collect an overpayment equal to the 
accelerated payment amount. We propose that no further education 
benefits will be paid until VA receives the required certification.
    If an individual fails to complete the course(s) for which an 
accelerated payment has been made and received, and the individual does 
not have mitigating circumstances for such failure, the proposed rule 
provides that VA will establish an overpayment equal to the accelerated 
payment. If mitigating circumstances are shown, VA will determine the 
amount of education benefits to which the individual is entitled for 
the enrollment period by prorating the accelerated payment amount in 
proportion to the number of days from the beginning of the enrollment 
period through the date of last attendance. VA will establish an 
overpayment against the individual for the difference between the 
amount so determined and the accelerated payment amount. Mitigating 
circumstances, for this purpose, are circumstances beyond the 
individual's control that prevent him or her from continuously pursuing 
a program of education.
    The Act also contains a provision that includes certain private 
technology entities in the definition of educational institution. This 
provision allows a private entity that offers, either directly or under 
an agreement with another entity, a course or courses to fulfill 
requirements for the attainment of a license or certificate generally 
recognized as necessary to obtain, maintain, or advance in employment 
in a profession or vocation in a high technology occupation. The 
proposed rule defines ``high technology'' occupation for VA purposes.
    To identify those occupations that VA defines as high technology 
occupations, we used the following reports:
    [sbull] Bureau of Labor Statistics, Monthly Labor Review, June 
1999, ``High-technology employment; a broader view'' by Dr. Daniel 
Hecker; and
    [sbull] The Digital Work Force, June 1999, by the Office of 
Technology, U.S. Department of Commerce.
    The Digital Work Force report identifies only information 
technology occupations while the BLS Monthly Labor Review report 
identifies all high technology occupations including those in 
information technology. Consequently, we propose to use the occupations 
BLS identified as high technology occupations. BLS defines high 
technology occupations as scientific, technical, and engineering 
occupations that include the following occupational groups and detailed 
occupations:
    [sbull] Life and physical scientists;
    [sbull] Engineers;
    [sbull] Mathematical specialists;
    [sbull] Engineering and science technicians;
    [sbull] Computer specialists; and
    [sbull] Engineering, scientific, and computer managers.
    We further propose to define the term ``computer specialists''. To 
do this we looked at various information technology programs approved 
for veterans' training, and courses currently offered by computer 
training centers. We also considered the core information technology 
occupations as listed in the Digital Workforce 2000 report by Office of 
Technology Policy. After reviewing this material, we propose to include 
the following occupations as computer specialists in our proposed 
definition:
    [sbull] Database, system, and network administrators;
    [sbull] Database, system, and network developers;
    [sbull] Computer and network engineers;
    [sbull] Systems analysts;
    [sbull] Programmers;
    [sbull] Computer, database, and network support specialists;
    [sbull] Computer scientists;
    [sbull] Web site designers;
    [sbull] Computer and network service technicians;
    [sbull] Computer and network electronics specialists; and
    [sbull] Certified professionals, certified associates, and 
certified technicians in the information technology field.

Paperwork Reduction Act of 1995

    Comments on the proposed collection of information should be 
submitted to the Office of Management and Budget, Attention: Desk 
Officer for the Department of Veterans Affairs, Office of Information 
and Regulatory Affairs, Washington, DC 20503, with copies mailed or 
hand-delivered to: Director, Office of Regulations Management (02D), 
Department of Veterans Affairs, 810 Vermont Avenue, NW., Room 1154, 
Washington, DC 20420. Comments should indicate that they are submitted 
in response to ``RIN 2900-AL22.'' Comments must be received on or 
before November 12, 2002.
    The Office of Management and Budget (OMB) has determined that the 
proposed new paragraphs 38 CFR 21.7151(c)(1)(i), (c)(2)(ii), and 
21.7154(d)(1) would constitute collections of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Accordingly, 
under section 3507(d) of the Act, VA has submitted a copy of this 
rulemaking action to OMB for review.

    Title: Request for Accelerated Payment.
    Summary of Collection of Information: The collection of information 
in Sec.  21.7151(c)(1)(i) of this rulemaking proceeding is necessary to 
apply provisions of section 104 of Pub. L. 107-103. The Act provides 
that certain individuals may elect to receive

[[Page 57546]]

an accelerated payment of the basic educational assistance allowance 
otherwise payable.
    Description of need for information and proposed use of 
information: The information collection required in Sec.  
21.7151(c)(1)(i) is needed because the law requires an individual to 
elect an accelerated payment.
    Description of likely respondents: Respondents are veterans and 
service members who wish to receive an accelerated payment of 
educational assistance under the MGIB for courses leading to employment 
in a high technology industry.
    Estimated number of respondents: 34,633.
    Estimated frequency of responses: When a claimant wishes to receive 
an accelerated payment of educational assistance, the claimant must 
file a statement with VA or the educational institution requesting an 
accelerated payment. Some claimants will file just one request for an 
accelerated payment while others will file several a year if they are 
enrolled in more than one term. Thus, we estimate 1\1/2\ responses per 
respondent.
    Estimated total annual reporting and record keeping burden: 2,597 
hours of reporting burden. VA estimates there will be no record keeping 
burden.

    Estimated average burden per respondent: .05 hour.
    Title: Agreement with Educational Institution.
    Summary of Collection of Information: The collection of information 
in Sec.  21.7151(c)(2)(ii) of this rulemaking proceeding is necessary 
to apply provisions of section 104 of Pub. L. 107-103. The Act requires 
VA to prescribe regulations to carry out provisions of section 104 
regarding the requirements, conditions, and methods for the request, 
issuance, deliver, certification of receipt and use of an accelerated 
payment.
    Description of need for information and proposed use of 
information: Section 21.7151(c)(2)(ii) requires an educational 
institution to enter into an agreement with VA to receive accelerated 
payments on behalf of veterans and servicemembers. Generally 
educational assistance allowance is paid directly to a claimant. VA 
will release an accelerated payment in advance of the start date of the 
course if the payment goes directly to the educational institution. By 
signing the agreement required in Sec.  21.7151(c)(2)(ii), the 
educational institution is agreeing to accept an accelerated payment on 
behalf of a veteran or servicemember and to deliver the payment to him 
or her. VA requires the agreement before we release an accelerated 
payment to an educational institution to ensure proper handling of 
payments.
    Description of likely respondents: Respondents are educational 
institutions that request to receive an accelerated payment on behalf 
of a veteran or servicemember.
    Estimated number of respondents: 3,454.
    Estimated frequency of responses: Educational institutions would 
apply just once.
    Estimated total annual reporting and record keeping burden: 172 
hours of reporting burden. VA estimates that there will be no record 
keeping burden for respondents.
    Estimated average burden per respondent: .05 hour.
    Title: Certifications Required from Individuals Electing 
Accelerated Payments.
    Summary of Collection of Information: The collection of information 
required in Sec.  21.7154(d)(1) of this rulemaking is necessary to 
apply provisions of section 104 of Pub. L. 107-103. The law requires VA 
to prescribe regulations to carry out provisions of section 104 
regarding the delivery, certification of receipt and use of accelerated 
payments.
    Description of need for information and proposed use of 
information: The information collection required in Sec.  21.7154(d)(1) 
is needed to collect information required by law. The information 
collected verifies that the proper individual received the accelerated 
payment, that the course was completed, and shows how the recipient 
used the payment. We are responsible for determining proper payment. 
Generally individuals are not eligible for payment if they do not 
complete a course. In addition to the above information, we need to 
know if and when a person withdraws from a course. We also need to know 
the reason they withdrew. This information is necessary to determine if 
an individual has been overpaid benefits. Most accelerated payments are 
paid before the completion of the course and represent payment for the 
entire course.
    Description of likely respondents: Respondents are veterans and 
servicemembers who receive an accelerated payment under the MGIB 
program.
    Estimated number of respondents: 34,633.
    Estimated frequency of responses: Some individuals will file just 
one request for an accelerated payment. Those who enrolled in more than 
one term may request an accelerated payment for each term. We estimate 
1\1/2\ responses per respondent.
    Estimated total annual reporting and record keeping burden: 4,329 
hours.
    Estimated average burden per respondent: .083 hour.
    The Department considers comments by the public on proposed 
collections of information in--
    [sbull] Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    [sbull] Evaluating the accuracy of the Department's estimate of the 
burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
    [sbull] Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
    [sbull] Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private section, of 
$100 million or more in any given year. This proposed rule would have 
no consequential effect on State, local, or tribal governments.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this 
proposed rule will not have a significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed rule will 
directly affect only individuals and will not directly affect small 
entities. Pursuant to 5 U.S.C. 605(b), this proposed rule, therefore, 
is exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance numbers for the programs

[[Page 57547]]

affected by this proposed rule are 64.117, 64.120, and 64.124.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflicts of interests, Defense 
Department, Education, Employment, Grant programs-education, Grant 
programs-veterans, Health care, Loan programs-education, Loan programs-
veterans, Manpower training programs, Reporting and recordkeeping 
requirements, Schools, Travel and transportation expenses, Veterans, 
Vocational education, Vocational rehabilitation.

    Approved: June 6, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 21 (subparts D 
and K) is proposed to be amended as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

    1. The authority citation for part 21, subpart D continues to read 
as follows:

    Authority: 10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 
30, 32, 34, 35, 36, unless otherwise noted.

    2. Section 21.4138 is amended by:
    a. In paragraph (f)(1)(v), removing ``basis. or'' and adding, in 
its place, ``basis;''.
    b. In paragraph (f)(1)(vi), removing ``basis.'' and adding, in it 
place, ``basis; or''.
    c. Adding paragraph (f)(1)(vii).
    The addition reads as follows:


Sec.  21.4138  Certifications and release of payments.

* * * * *
    (f) * * *
    (1) * * *
    (vii) The veteran receives an accelerated payment for the term, 
quarter, semester, or summer session preceding the interval.
* * * * *
    3. Section 21.4200 is amended by:
    a. In paragraph (a)(4), removing ``section; or'', and adding, in 
its place, ``section;';
    b. In paragraph (a)(5), removing ``program.'', and adding, in its 
place, ``program; or'; and
    c. Adding paragraph (a)(6); and paragraphs (aa) through (dd) 
immediately after the authority citation at the end of paragraph (z).
    d. Revising the authority citation at the end of paragraph (a).
    The revisions and additions read as follows:


Sec.  21.4200  Definitions.

    (a) * * *
    (6) Any private entity that offers, either directly or indirectly 
under an agreement with another entity, a course or courses to fulfill 
requirements for the attainment of a license or certificate generally 
recognized as necessary to obtain, maintain, or advance in employment 
in a profession or vocation in a high technology occupation.

(Authority: 38 U.S.C. 3452, 3501(a)(6), 3689(d))

* * * * *
    (aa) High technology industry: The term high technology industry 
includes the following industries:
    (1) Biotechnology;
    (2) Life science technologies;
    (3) Opto-electronics;
    (4) Computers and telecommunications;
    (5) Electronics;
    (6) Computer-integrated manufacturing;
    (7) Material design;
    (8) Aerospace;
    (9) Weapons;
    (10) Nuclear technology; and
    (11) Any other identified advanced technologies in the biennial 
Science and Engineering Indicators report published by the National 
Science Foundation.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

    (bb) Employment in a high technology industry. Employment in a high 
technology industry means employment in a high technology occupation 
specific to a high technology industry.

(Authority: 38 U.S.C. 3014A)

    (cc) High technology occupation. The term high technology 
occupation means an occupation that leads to employment in a high 
technology industry. These occupations consist of:
    (1) Life and physical scientists;
    (2) Engineers;
    (3) Mathematical specialists;
    (4) Engineering and science technicians;
    (5) Computer specialists; and
    (6) Engineering, scientific, and computer managers.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

    (dd) Computer specialists. The term computer specialists includes 
the following occupations:
    (1) Database, system, and network administrators;
    (2) Database, system, and network developers;
    (3) Computer and network engineers;
    (4) Systems analysts;
    (5) Programmers;
    (6) Computer, database, and network support specialists;
    (7) All computer scientists;
    (8) Web site designers;
    (9) Computer and network service technicians;
    (10) Computer and network electronics specialists; and
    (11) All certified professionals, certified associates and 
certified technicians in the information technology field.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

* * * * *

Subpart K--All Volunteer Force Educational Assistance Program 
(Montgomery GI Bill--Active Duty)

    4. The authority citation for part 21, subpart K, continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise 
noted.

    5. Section 21.7020 is amended by adding paragraphs (b)(47) through 
(b)(51) at the end of the section.
    The additions read as follows:


Sec.  21.7020  Definitions.

* * * * *
    (b) * * *
    (47) High technology industry. The term high technology industry 
has the same meaning as provided in Sec.  21.4200(aa).

    (Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

    (48) Employment in a high technology industry. Employment in a high 
technology industry has the same meaning as provided in Sec.  
21.4200(bb).

(Authority: 38 U.S.C. 3014A)

    (49) High technology occupation. The term high technology 
occupation has the same meaning as provided in Sec.  21.4200(cc).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

    (50) Computer specialist. The term computer specialist has the same 
meaning as provided in Sec.  21.4200(dd).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

    (51) Accelerated payment. An accelerated payment is a lump sum 
payment of a maximum of 60 percent of the charged tuition and fees for 
an individual's enrollment for a term, quarter, or semester in an 
approved program of education leading to

[[Page 57548]]

employment in a high technology industry. In the case of a program of 
education not offered on a term, quarter, or semester basis, the 
accelerated payment is a lump sum payment of a maximum of 60 percent of 
the charged tuition and fees for the entire such program.

(Authority: 38 U.S.C. 3014A)

    6. Section 21.7076 is amended by revising paragraphs (a), (b)(1) 
introductory text, and (b)(7) to read as follows:


Sec.  21.7076  Entitlement charges.

    (a) Overview. VA will make charges against entitlement as stated in 
this section.
    (1) Charges will be made against the entitlement the veteran or 
servicemember has to educational assistance under 38 U.S.C. chapter 30 
as the assistance is paid.
    (2) There will be a charge (for record purposes only) against the 
remaining entitlement, under 38 U.S.C. chapter 34, of an individual who 
is receiving the educational assistance under Sec.  21.7137 of this 
part. The record-purpose charges against entitlement under 38 U.S.C. 
chapter 34 will not count against the 48 months of total entitlement 
under both 38 U.S.C. chapters 30 and 34 to which the veteran or service 
member may be entitled. (See Sec.  21.4020(a) of this part).
    (3) Generally, VA will base those entitlement charges on the 
principle that a veteran or service member who trains full time for one 
day should be charged one day of entitlement. However, this general 
principle does not apply to a veteran or servicemember who:
    (i) Is pursuing correspondence training;
    (ii) Is pursuing flight training;
    (iii) Is pursuing an apprenticeship or other on-job training; or
    (iv) Is paid an accelerated payment.
    (4) The provisions of this section apply to:
    (i) Veterans and service members training under 38 U.S.C. chapter 
30; and
    (ii) Veterans training under 38 U.S.C. chapter 31 who make a valid 
election under Sec.  21.21 of this part to receive educational 
assistance equivalent to that paid to veterans under 38 U.S.C. chapter 
30.

(Authority: 38 U.S.C. 3013, 3014(A), 3014(b))

    (b) * * *
    (1) Except for those pursuing correspondence training, flight 
training, apprenticeship or other on-the-job training, those who are 
receiving tutorial assistance, and those who receive an accelerated 
payment, VA will make a charge against entitlement:
* * * * *
    (7) When a veteran or servicemember is paid an accelerated payment, 
VA will make a charge against entitlement for each accelerated payment 
made to him or her. The charge--
    (i) Will be made in months and decimal fractions of a month; and
    (ii) Will be determined by dividing the amount of the accelerated 
payment by an amount equal to the rate of basic educational assistance 
otherwise applicable to him or her for full-time institutional 
training. If the rate of basic educational assistance increases during 
the enrollment period, VA will charge entitlement for the periods 
covered by the initial rate and the increased rate, respectively.

(Authority: 38 U.S.C. 3014A)

* * * * *
    7. Section 21.7140 is amended by:
    a. Redesignating paragraphs (b) through (f) as paragraphs (c) 
through (g), respectively.
    b. Adding a new paragraph (b).
    c. Revising newly redesignated paragraph (c)(1) introductory text.
    The addition and revision read as follows:


Sec.  21.7140  Certifications and release of payments.

* * * * *
    (b) Accelerated payments. VA will apply the provisions of 
Sec. Sec.  21.7151(a), (c), (d), and 21.7154(c) in making accelerated 
payments.
    (c) * * *
    (1) VA will pay educational assistance to a veteran or 
servicemember (other than one pursuing a program of apprenticeship or 
other on-job training, a correspondence course, one who qualifies for 
advance payment, one who qualifies for an accelerated payment, or one 
who qualifies for a lump sum payment) only after--
* * * * *


Sec.  21.7142  [Redesignated as Sec.  21.7143]

    8. Section 21.7142 is redesignated as Sec.  21.7143.
    9. A new Sec.  21.7142 is added to read as follows:


Sec.  21.7142  Accelerated payments.

    The accelerated payment will be the lesser of--
    (a) The amount equal to 60 percent of the charged tuition and fees 
for the term, quarter or semester (or the entire program of education 
for those programs not offered on a term, quarter, or semester basis), 
or
    (b) The aggregate amount of basic education assistance to which the 
individual remains entitled under this chapter at the time of the 
payment.

(Authority: 38 U.S.C. 3014A)

    10. Section 21.7151 is amended by:
    a. Revising the section heading.
    b. Adding paragraph (c) immediately following the authority 
citation at the end of the section.
    The revision and additions read as follows:


Sec.  21.7151  Advance payment and accelerated payment certifications.

* * * * *
    (c) Accelerated payments. (1) A veteran or servicemember is 
eligible for an accelerated payment only if--
    (i) The veteran or servicemember submits a signed statement to the 
school or to VA that states ``I request accelerated payment'';
    (ii) The veteran or servicemember is enrolled in a course or 
program of education or training beginning on or after October 1, 2002;
    (iii) The veteran is enrolled in an approved program as defined in 
Sec.  21.4200 (aa);
    (iv) The charged tuition and fees for the term, quarter, or 
semester (or entire program for those programs not offered on a term, 
quarter or semester basis) divided by the number of months (and 
fractions thereof) in the enrollment period, exceeds the amount equal 
to 200 percent of the monthly rate of basic educational assistance 
allowance otherwise payable under Sec. Sec.  21.7136 or 21.7137, as 
applicable; and
    (v) The veteran or servicemember requesting the accelerated payment 
has not received an advance payment under Sec.  21.7140(a) for the same 
enrollment period.
    (2) Except as provided in paragraph (c)(5) of this section, VA will 
make the accelerated payment directly to the educational institution, 
in the veteran's or servicemember's name, for delivery to the veteran 
or servicemember if:
    (i) The educational institution submits the enrollment 
certification required under Sec.  21.7152 before the actual start of 
the term, quarter or semester (or the start of the program for a 
program not offered on a term, quarter or semester basis); and
    (ii) The educational institution at which the veteran or 
servicemember is accepted or enrolled agrees to--
    (A) Provide for the safekeeping of the accelerated payment check 
before delivery to the veteran or servicemember;
    (B) Deliver the payment to the veteran or servicemember no earlier 
than the start of the term, quarter or semester (or the start of the 
program if the program

[[Page 57549]]

is not offered on a term, quarter or semester basis);
    (C) Certify the enrollment of the veteran or servicemember and the 
amount of tuition and fees therefor; and
    (D) Certify the delivery of the accelerated payment to the veteran 
or servicemember.
    (3) VA will make accelerated payments directly to the veteran or 
servicemember if the enrollment certification required under Sec.  
21.7152 is submitted on or after the first day of the enrollment 
period. VA will electronically deposit the accelerated payment in the 
veteran's or servicemember's bank account unless--
    (i) The veteran or servicemember does not have a bank account; or
    (ii) The veteran or servicemember objects to payment by electronic 
funds transfer.
    (4) VA must make the accelerated payment no later than the last day 
of the month immediately following the month in which VA receives a 
certification from the educational institution regarding--
    (i) The veteran's or servicemember's enrollment in the program of 
education; and
    (ii) The amount of the charged tuition and fees for the term, 
quarter or semester (or for a program that is not offered on a term, 
quarter, or semester basis, the entire program).
    (5) The Director of the VA field station of jurisdiction may direct 
that accelerated payments not be made in advance of the first day of 
the enrollment period in the case of veterans or servicemembers 
attending an educational institution that demonstrates its inability to 
discharge its responsibilities for accelerated payments. In such a 
case, the accelerated payment will be made directly to the veteran or 
servicemember as provided in paragraph (c)(3) of this section.

(Authority: 38 U.S.C. 3014A)

    11. Section 21.7154 is amended by:
    a. Revising the authority citation at the end of paragraph (a).
    b. Adding paragraph (a)(4) immediately following the authority 
citation at the end of paragraph (a)(3); and by adding paragraph (d) 
immediately following the authority citation at the end of the section.
    The revision and additions read as follows:


Sec.  21.7154  Pursuit and absences.

* * * * *
    (a) * * *
    (4) Has received an accelerated payment for the enrollment period.

(Authority: 38 U.S.C. 3014A, 3034, 3684)

* * * * *
    (d) Additional requirements for individuals receiving an 
accelerated payment.
    (1) When an individual receives an accelerated payment as provided 
in Sec.  21.7151(c) and (d), he or she must certify the following 
information within 60 days of the end of the term, quarter or semester 
(or entire program when the program is not offered on a term, quarter, 
or semester basis) for which the accelerated payment was made:
    (i) The course or program was successfully completed, or if the 
course was not completed--
    (A) The date the veteran or servicemember last attended; and
    (B) An explanation why the course was not completed;
    (ii) If the veteran or servicemember increased or decreased his or 
her training time--
    (A) The date the veteran or servicemember increased or decreased 
training time; and
    (B) The number of credit/clock hours pursued before and after each 
such change in training time; and
    (iii) The accelerated payment was received and used.
    (2) VA will establish an overpayment equal to the amount of the 
accelerated payment if the required certifications in paragraph (c)(1) 
of this section are not timely received.
    (3) VA will determine the amount of the overpayment of benefits for 
courses not completed in the following manner--
    (i) For a veteran or servicemember who does not complete the full 
course, courses, or program for which the accelerated payment was made, 
and who does not substantiate mitigating circumstances for not 
completing, VA will establish an overpayment equal to the amount of the 
accelerated payment.
    (ii) For a veteran or servicemember who does not complete the full 
course, courses, or program for which the accelerated payment was made, 
but who substantiates mitigating circumstances for not completing, VA 
will prorate the amount of the accelerated payment to which he or she 
is entitled based on the number of days from the beginning date of the 
enrollment period through the date of last attendance. VA will 
determine the prorated amount by dividing the accelerated payment 
amount by the number of days in the enrollment period, and multiplying 
the result by the number of days from the beginning date of the 
enrollment period through the date of last attendance. The result of 
this calculation will equal the amount the individual is due. The 
difference between the accelerated payment and the amount the 
individual is due will be established as an overpayment.

(Authority: 38 U.S.C. 3014A(g))

* * * * *
[FR Doc. 02-22439 Filed 9-10-02; 8:45 am]
BILLING CODE 8320-01-P