[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Proposed Rules]
[Pages 9196-9220]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-1219]



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Part II





Department of Veterans Affairs





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38 CFR Part 21



Veterans and Dependents Education: Topping-Up Tuition Assistance; 
Licensing and Certification Tests; Duty To Assist Education Claimants; 
Proposed Rule

  Federal Register / Vol. 71, No. 35 / Wednesday, February 22, 2006 / 
Proposed Rules  

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AK80


Veterans and Dependents Education: Topping-Up Tuition Assistance; 
Licensing and Certification Tests; Duty To Assist Education Claimants

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 education programs the Department of Veterans 
Affairs (VA) administers, in order to implement some provisions of the 
Veterans Benefits and Health Care Improvement Act of 2000, the Floyd D. 
Spence National Defense Authorization Act for Fiscal Year 2001, and the 
Veterans Claims Assistance Act of 2000 that affect those programs. 
Specifically, these statutory provisions include provisions for 
payment, under Survivors' and Dependents' Educational Assistance, the 
Post-Vietnam Era Veterans' Educational Assistance Program, and the 
Montgomery GI Bill--Active Duty, for the cost of taking tests for 
licensure or certification. They also include provisions for payment 
under the Montgomery GI Bill--Active Duty of the difference between the 
portion of tuition and expenses covered by tuition assistance programs 
administered by the various military departments and the actual charges 
made by educational institutions. In addition, this document proposes 
rules regarding the timing and the scope of assistance VA will provide 
to claimants under the education programs VA administers who file 
substantially complete applications for benefits, or who attempt to 
reopen previously denied claims. The proposed rule would make other 
changes in the education benefits regulations that are nonsubstantive 
changes for the purpose of clarity, technical changes, or restatements 
of statutory provisions.

DATES: Comments must be received on or before April 24, 2006.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to Director, Regulations Management (00REG1), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; fax to 
(202) 273-9026; or e-mail comments through http://www.Regulations.gov. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK80.'' All comments received will be available for public 
inspection in the Office of Regulation Policy and Management, room 
1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays). Please call (202) 273-9515 for an appointment. In 
addition, see the Paperwork Reduction Act of 1995 heading under the 
SUPPLEMENTARY INFORMATION section of this preamble regarding submission 
of comments on the information collection provisions.

FOR FURTHER INFORMATION CONTACT: Lynn M. Nelson, Education Advisor 
(225C), Education Service, Veterans Benefits Administration, Department 
of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, 
(202) 273-7187.

SUPPLEMENTARY INFORMATION: Section 3689 of title 38 U.S.C., as added by 
section 122 of the Veterans Benefits and Health Care Improvement Act of 
2000 (Pub. L. 106-419) and amended by section 308(d) of the Veterans 
Benefits Act of 2002 (Pub. L. 107-330), contains provisions that allow 
veterans and other eligible persons to receive educational assistance 
under Survivors' and Dependents' Educational Assistance (DEA), the 
Post-Vietnam Era Veterans' Educational Assistance Program (VEAP), and 
the Montgomery GI Bill--Active Duty (MGIB) to cover the costs of taking 
tests for licensing or certification. Section 3689 provides that both 
the tests and the organizations offering the tests must be approved for 
VA training before veterans or other eligible persons could be paid for 
the cost of these tests. Section 3689(a) further provides that the 
Secretary of Veterans Affairs may approve these tests and organizations 
or use the State approving agencies (SAAs) to carry out this 
responsibility. The proposed rule would reflect the Secretary's 
determination that the SAAs are fully capable of carrying out this 
responsibility for all tests and organizations except for those tests 
the Federal Government offers.
    This proposed rule would contain provisions that VA believes are 
necessary to properly administer the provisions of 38 U.S.C. 3689 for 
payment of the cost of taking tests for licensure or certification. For 
example, VA believes that a testing organization should have the right 
to seek a review of an SAA's adverse decision. Although this isn't 
stated in the law, it would be provided in proposed Sec.  21.4268(f). 
Under proposed Sec.  21.4268(f), if an organization or entity offering 
a test disagrees with a decision made by an SAA, the organization or 
entity may seek a review of the SAA's decision by VA's Director of 
Education Service. The organization or entity would request such review 
in writing to the SAA. Proposed Sec.  21.4268(f)(2) would require that 
the request must be received by the SAA within 90 days of the date of 
the notice that the test or organization was not approved. Proposed 
Sec.  21.4268(f)(3) would require that the review by the Director of 
Education Service would be based on the evidence of record and would 
not be de novo in character. Proposed Sec.  21.4268(f)(4) would provide 
that VA's Director of Education Service, or Under Secretary of 
Benefits, may seek the advice of the Professional Certification and 
Licensure Advisory Committee as to whether or not the SAA's decision 
should be reversed. The Professional Certification and Advisory 
Committee was established under 38 U.S.C. 3689(e) to advise the 
Secretary with respect to the requirements of organizations and 
entities offering licensing and certification tests to individuals 
eligible for VA educational assistance under chapters 30, 32, 34, or 35 
of title 38. Under proposed Sec.  21.4268(f)(5), the decision made by 
the Director of Education Service, or Under Secretary for Benefits, 
would be the final administrative decision. Such decision would not be 
subject to further administrative review.
    Similarly, section 3689 states that the veteran or eligible person 
should be paid, but doesn't state whether VA should make that payment 
before or after the individual takes the test. Under the proposed rule, 
this payment would be made as a reimbursement rather than an advance 
payment. VA believes this is necessary to simplify the process for 
applicants, to minimize the costs of administering these payments, and 
to reduce the possibility of overpayments. A veteran or eligible person 
may contact VA at 1-888-GIBill-1 (1-888-442-4551) to determine if the 
test he or she wants to take is approved for reimbursement.
    In addition, 38 U.S.C. 3689(d) provides that ``the organization or 
entity that offers such test is deemed to be an * * * ``educational 
institution'' * * * for [certain] purposes * * *.'' We propose to amend 
the definitions in various subparts of the education regulations in 38 
CFR part 21 where appropriate to carry out this provision.
    The payment of benefits under the MGIB is also affected by 
provisions in 38 U.S.C. 3014, as amended by section 1602 of the Floyd 
D. Spence National Defense Authorization Act for Fiscal Year 2001 (Pub. 
L. 106-398). Specifically, the proposed rule would reflect those 
provisions, under which VA can, at the election of the individual, pay 
educational assistance to meet the portion of the charges of an

[[Page 9197]]

educational institution for education or training that are not paid by 
the Secretary of a military department under 10 U.S.C. 2007(a) or (c). 
Such payments by VA would be defined in the proposed rule as ``tuition 
assistance top-up.'' (The payments by the Secretary of a military 
department under 10 U.S.C. 2007(a) or (c) are commonly called ``tuition 
assistance''.) The proposed rule would make clear how VA makes these 
payments and makes charges for them against each individual's 
entitlement.
    The Veterans Claims Assistance Act of 2000 (Pub. L. 106-475) (VCAA) 
included provisions amending 38 U.S.C. 5102 and 5103 and adding new 
sections 38 U.S.C. 5100 and 5103A pertaining to VA's duty to assist 
claimants in obtaining evidence in support of claims for benefits. Upon 
receipt of a substantially complete application for benefits, VA's duty 
under the VCAA is to make reasonable efforts to help the claimant 
obtain the evidence necessary to substantiate the claim. This effort is 
commonly referred to as the duty to assist. VA will refrain from 
providing assistance in obtaining evidence for a claim if the 
substantially complete application for benefits indicates that there is 
no reasonable possibility that any assistance VA would provide to the 
claimant would substantiate the claim. VA will discontinue providing 
assistance in obtaining evidence for a claim if the evidence obtained 
indicates that there is no reasonable possibility that further 
assistance would substantiate the claim.
    Under 38 U.S.C. 5103A(e), VA is directed to prescribe regulations 
to carry out the provisions of section 5103A. In the Federal Register 
of August 29, 2001 (66 FR 45620), VA issued a final rule amending 38 
CFR part 3, subpart A, to carry out those and other provisions of the 
VCAA with respect to claims for benefits that are governed by 38 CFR 
part 3 (including compensation, pension, dependency and indemnity 
compensation, burial benefits, monetary benefits ancillary to those 
benefits, and special benefits) (66 FR at 45629). Section 701 of the 
Veterans Benefits Act of 2003 (Pub. L. 108-183) further amended 38 
U.S.C. 5102 and 5103.
    This proposed rule's provisions under the VCAA and the Veterans 
Benefits Act of 2003 would apply to the educational benefits programs 
administered by the Secretary (which currently are DEA, VEAP, MGIB, and 
the Montgomery GI Bill-Selected Reserve (MGIB-SR)) and would apply to 
claims filed on or after November 9, 2000.
    VA is proposing to define a substantially complete application in 
proposed Sec.  21.1029(g). In regard to an individual's first 
application for educational assistance administered by VA, we propose 
in (g)(1) to define a substantially complete application as an 
application that contains:
     The claimant's name;
     His or her relationship to the veteran, if applicable;
     Sufficient information for VA to verify the claimed 
service, if applicable;
     The benefit claimed;
     The program of education, if applicable; and
     The name of the educational institution the claimant 
intends to attend, if applicable.
    If an application is a subsequent application for educational 
assistance, and the claimant's relationship to the veteran (if 
applicable) and sufficient information for VA to identify the claimed 
service (if applicable) are already on record with VA, under proposed 
Sec.  21.1029(g)(2) a substantially complete application would be an 
application containing:
     The claimant's name;
     The benefit claimed;
     The program of education, if applicable; and
     The name of the educational institution the claimant 
intends to attend, if applicable.
    Although VA application forms for educational assistance request 
more information than is listed in the proposed definition, the 
information specified in proposed 38 CFR 21.1029(g) to make an 
application substantially complete is generally sufficient for VA to 
identify the benefit claimed, determine whether the claimant is 
potentially eligible for it, and identify, at least generally, the 
types of information or evidence that would be required to substantiate 
the claim. A substantially complete application will trigger VA's duty 
to assist. A complete application would necessarily be a substantially 
complete application for purposes of VA's assistance in developing the 
claim.
    In addition, this proposed rule contains restatements of statute 
and would make technical changes and nonsubstantive changes for the 
purpose of clarity in the regulations governing various aspects of the 
education programs VA administers.

Paperwork Reduction Act of 1995

    This proposed rule includes provisions constituting collections of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) (``Act'') that would need approval by the Office of Management 
and Budget (OMB). Accordingly, under section 3507(d) of the Act, VA has 
submitted a copy of this rulemaking action to OMB for review.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    Comments on the collections of information contained in this 
proposed rule 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 sent by mail or hand delivery to the Director, Regulations 
Management (00REG1), Department of Veterans Affairs, 810 Vermont Ave., 
NW., Room 1068, Washington, DC 20420; fax to (202) 273-9026; or e-mail 
comments through www.Regulations.gov. Comments should indicate that 
they are submitted in response to ``RIN 2900-AK80.''
    The Department considers comments by the public on proposed 
collections of information in--
     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;
     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;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     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.
    Under this heading, Paperwork Reduction Act of 1995, the 
collections of information referred to in this paragraph are described, 
under their proposed titles. The proposed amendments in 38 CFR 
21.1030(b), 21.1030(c), 21.4209, 21.4250(b), 21.4252(h), 21.4258, 
21.4259, 21.4268, and 21.7140 contain collections of information under 
the Act for which we are requesting approval by OMB. For the 
collections of information in three of these sections as proposed to be 
amended, Sec. Sec.  21.4250, 21.4258, and 21.4259, SAAs are the 
respondents, as SAAs also are for a related collection of information 
in 38 CFR 21.4154, which

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is currently approved under OMB control number 2900-0051. For 
administrative convenience, we are requesting OMB to approve under that 
OMB control number the information collections relating to those four 
sections of the regulations (see ``State Approving Agency Reports and 
Notices, 38 CFR 21.4154, 21.4250(b), 21.4258, and 21.4259'' and the 
proposed information collection approval parentheticals at the end of 
each of those sections in the proposed rule).
    This proposed rule would also amend some provisions containing 
other collections of information that have existing approval by OMB. In 
particular, the collections of information in proposed 38 CFR 
21.1030(a)(1), (b)(1), and (c)(1) are approved under OMB control 
numbers 2900-0154 (Application for VA Education Benefits) and 2900-0098 
(Application for Survivors' and Dependents' Educational Assistance 
(Under Chapter 35, Title 38 U.S.C.)). The collections of information in 
proposed 38 CFR 21.1030(a)(2) are approved under OMB control numbers 
2900-0074 (Request for Change of Program or Place of Training (For 
Veterans, Servicepersons, & Members of the Selected Reserve)) and 2900-
0099 (Request for Change of Program or Place of Training Survivors' and 
Dependents' Educational Assistance (Under Provisions of Chapter 35, 
Title 38 U.S.C.)).
    The proposed rule would reflect, in the information collection 
approval parenthetical at the end of Sec.  21.4252, Courses precluded; 
erroneous, deceptive, or misleading practices, as proposed to be 
amended, an OMB control number for the information collection in Sec.  
21.4252(h) as proposed to be amended, for which we are requesting OMB 
approval, and the OMB control numbers for the currently approved 
collections of information in Sec.  21.4252(j) and (l), which 
paragraphs and collections of information this document does not 
propose to amend. The collections of information in current Sec.  
21.4252(j) and (l) are approved under OMB control number 2900-0156 
(Notice of Change in Student Status) and OMB control number 2900-0073 
(Enrollment Certification), respectively. No changes would be made by 
this proposed rule to the currently approved collections of information 
in Sec.  21.4252. The collections of information in Sec.  21.5133, 
Certifications and release of payments, and in Sec.  21.7152, 
Certification of enrollment, are approved under OMB control number 
2900-0465 (Student Verification of Enrollment) and OMB control number 
2900-0073, respectively. Although this document proposes to amend 
certain provisions of Sec. Sec.  21.5133 and 21.7152, including by 
adding descriptions of circumstances in which the respective section's 
collection of information would not apply, those amendments would not 
change the collections of information by VA under Sec. Sec.  21.5133 
and 21.7152.
    We are proposing in Sec.  21.7131 to make the technical correction 
of removing the information collection approval parenthetical. The 
approval under the OMB control number it contains, 2900-0607, was 
discontinued at VA's request, since VA no longer had a need to conduct 
that information collection.
    This proposed rule includes information collection approval 
parentheticals at the end of certain sections. They display currently-
approved OMB control numbers (OMB's approval of which is either current 
for information collections under those sections or requested in 
relation to this rulemaking to be modified to include those sections as 
proposed to be amended) and OMB control numbers shown as 2900-XXXX for 
information collections for which we are requesting newly-approved OMB 
control numbers in this rulemaking. We are also proposing in Sec.  
21.4154 to revise, with a technical change for the purpose of 
clarification, the information collection approval parenthetical in 
which we display OMB control number 2900-0051.
    Title: Request for Reimbursement of Licensing or Certification Test 
Fee; 38 CFR 21.1030(b), 21.7140(c)(4).
    Summary of collection of information: The collection of information 
in proposed Sec. Sec.  21.1030(b) and 21.7140(c)(4) is necessary to 
apply 38 U.S.C. 3689 and 5101(a) to claims for educational assistance 
for licensing or certification tests under the various educational 
assistance programs VA administers. It would require that an individual 
must file a claim for educational assistance under the laws VA 
administers in order for VA to determine basic eligibility and to pay 
educational assistance to that individual for reimbursement of the cost 
of any licensing or certification test.
    Description of need for information and proposed use of 
information: The information collection in proposed Sec. Sec.  
21.1030(b) and 21.7140(c)(4) is needed to enable VA to decide whether 
an individual is entitled to the educational assistance he or she is 
seeking for taking a licensing or certification test and, if VA 
determines that he or she should be paid, the amount to be paid to the 
claimant.
    Description of likely respondents: Respondents would be veterans, 
servicemembers, and veterans' dependents who wish to receive 
educational assistance under DEA, VEAP, or the MGIB for reimbursement 
for taking an approved licensing or certification test.
    Estimated number of respondents: 3,600.
    Estimated frequency of responses: On occasion. When an individual 
wishes to receive educational assistance as a reimbursement of the cost 
of a licensing or certification test, the individual would need to file 
a claim for the benefit. Some claimants would file just one claim while 
others would file several from time to time as the situation may 
warrant.
    Estimated total annual reporting and recordkeeping burden: 1,000 
hours of reporting burden. VA estimates that there would be no 
recordkeeping burden.
    Estimated average burden per response: 15 minutes.
    Title: Application for Educational Assistance to Supplement Tuition 
Assistance; 38 CFR 21.1030(c), 21.7140(c)(5).
    Summary of collection of information: The collection of information 
in proposed Sec. Sec.  21.1030(c) and 21.7140(c)(5) is necessary to 
apply 38 U.S.C. 3014(b) and 5101(a) to claims for educational 
assistance under the MGIB to supplement tuition assistance provided 
under a program administered by the Secretary of a military department. 
Section 5101(a) requires that an individual must file a claim for a 
benefit under the laws VA administers in order for VA to pay that 
benefit to the individual.
    Description of need for information and proposed use of 
information: The information collection in Sec. Sec.  21.1030(c) and 
21.7140(c)(5) is needed to enable VA to decide whether the claimant 
should be paid the educational assistance he or she is seeking to 
supplement the tuition assistance the claimant received and, if he or 
she should be paid, the amount to be paid.
    Description of likely respondents: Respondents would be veterans, 
reservists, and servicemembers who wish to receive educational 
assistance under the MGIB for reimbursement for that portion of the 
cost of a course not covered by tuition assistance provided under a 
program administered by the Secretary of a military department.
    Estimated number of respondents: 12,250.
    Estimated frequency of responses: When an individual wishes to 
receive educational assistance for

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reimbursement for that portion of the cost of a course not covered by 
tuition assistance, the individual would need to file a claim for the 
benefit. Some claimants would file just one claim while others would 
file several from time to time as the situation warrants.
    Estimated total annual reporting and recordkeeping burden: 3,000 
hours of reporting burden. VA estimates that there would be no 
recordkeeping burden.
    Estimated average burden per response: 12 minutes.
    Title: Availability of Educational, Licensing, and Certification 
Records; 38 CFR 21.4209.
    Summary of collection of information: The collection of information 
in Sec.  21.4209 as proposed to be amended is necessary so that VA can 
apply 38 U.S.C. 3690(c) and also verify that the payments of 
educational assistance under the various programs VA administers were 
correct. Section 21.4209 would require that educational institutions 
with courses and programs approved for VA training (including 
organizations or entities with licensing and certification tests 
approved) must make records available to Government representatives if 
they are needed to verify that the payments for these courses, 
programs, and tests are correct. The section would require that the 
educational institution retain these records for 3 years unless the 
Government Accountability Office (GAO) or VA asks that they be kept 
longer.
    Description of need for information and proposed use of 
information: The information collection in proposed Sec.  21.4209 is 
needed to enable VA to decide whether the payments in the educational 
assistance programs it administers have been correct.
    Description of likely respondents: Respondents are educational 
institutions with course(s) and program(s) approved for VA training, 
and organizations or entities with licensing and/or certification 
test(s) approved for payment under those programs VA administers that 
allow for such payments.
    Estimated number of respondents: 8,000 (this includes respondents 
who would retain records but make no reports or disclosures).
    Estimated frequency of responses: Each year VA or SAA 
representatives would conduct a total of about 3,000 compliance or 
supervisory visits of the 8,000 respondents. There may be some overlap 
of visits by VA and the SAA, so some respondents would be visited 
annually, some twice a year, and some less frequently.
    Estimated total annual reporting and recordkeeping burden: 6,000 
hours. VA estimates that there will be no recordkeeping burden hours 
because these are records the institutions maintain in the normal 
course of their operations.
    Estimated average burden per respondent: 2 hours per visit.
    Title: Advertising, Sales, and Enrollment Materials, and Candidate 
Handbooks; 38 CFR 21.4252(h).
    Summary of collection of information: The collection of information 
in proposed Sec.  21.4252(h) is needed to implement 38 U.S.C. 3696(b), 
which requires that an educational institution maintain a complete 
record of all advertising, sales, or enrollment materials used by or on 
behalf of the educational institution during the preceding 12 months, 
and to implement 38 U.S.C. 3689, under which the requirements are 
applicable to organizations and entities offering licensing or 
certification tests. For organizations and entities offering licensing 
or certification tests, candidate handbooks are the equivalent of 
enrollment materials.
    Description of need for information and proposed use of 
information: VA or the Federal Trade Commission (FTC) would use the 
materials in any investigation (as permitted under 38 U.S.C. 3696(c)) 
of whether the materials were erroneous, deceptive, or misleading.
    Description of likely respondents: Educational institutions that 
offer courses approved for VA training and that advertise those 
courses, and organizations and entities that offer licensing or 
certification tests.
    Estimated number of respondents: 8,000 (this includes respondents 
that would keep records but make no reports).
    Estimated frequency of responses: Each year VA or SAA 
representatives would conduct a total of about 3,000 compliance or 
supervisory visits of the 8,000 respondents, during which the 
respondents would have to show their advertising and sales materials, 
and enrollment materials or candidate handbooks, to an employee of VA 
or the SAA. There may be some overlap of visits by VA and the SAA, so 
some respondents would be visited annually, some twice a year, and some 
less frequently.
    Estimated total annual reporting and recordkeeping burden: 750 
hours of reporting burden. VA estimates that there will be no 
recordkeeping burden, because these materials would be kept in the 
normal course of business.
    Estimated average burden per respondent: 15 minutes per visit.
    Title: Application for Approval of a Licensing or Certification 
Test and Organization or Entity; 38 CFR 21.4268.
    Summary of collection of information: The collection of information 
in proposed Sec.  21.4268 is necessary to apply 38 U.S.C. 3689. That 
section provides that an organization or entity offering licensing or 
certification tests that wishes to have its tests approved for VA 
payment, and to be itself approved, must make various certifications to 
VA and furnish information that the Secretary requires to determine 
whether payment may be made. Since the SAAs are, with limited 
exceptions, acting for VA in approving these tests and testing 
organizations or entities, an organization or entity must in general 
provide the information and make the certifications to the SAA with 
jurisdiction. This can best be done on an application for approval.
    Description of need for information and proposed use of 
information: The SAAs (or occasionally VA) will use this information to 
decide if the licensing or certification tests and the organizations or 
entities offering them can be approved for payments under the 
appropriate education programs that VA administers.
    Description of likely respondents: Organizations and entities that 
offer licensing or certification tests.
    Estimated number of respondents: 950.
    Estimated frequency of responses: Most organizations and entities 
would apply just once. However, if an approved organization or entity 
began offering a licensing or certification test that had not been 
approved, it would have to apply again.
    Estimated total annual reporting and recordkeeping burden: 3,000 
hours of reporting burden. VA estimates that there will be no 
recordkeeping burden. Although the proposed rule would require a 
certification that records will be retained, this requirement would not 
cause a recordkeeping burden because the records would be retained in 
the ordinary course of business.
    Estimated average burden per response: 3 hours.
    Title: State Approving Agency Reports and Notices; 38 CFR 21.4154, 
21.4250(b), 21.4258, and 21.4259.
    Summary of collection of information: The collections of 
information in Sec. Sec.  21.4250(b), 21.4258, and 21.4259 as proposed 
to be amended are required to implement 38 U.S.C. 3673, 3678, 3679, and 
3689. Section 38 U.S.C. 3673 instructs VA and the SAAs to cooperate and 
establish an exchange of

[[Page 9200]]

information pertaining to educational institutions to assure programs 
administered by VA are effectively and efficiently administered. 
Sections 3678 and 3679 provide that the SAAs must notify the 
educational institutions and VA of all approval and disapproval 
actions. Section 3689 provides that an organization or entity offering 
a licensing or certification test is deemed to be an ``institution'' or 
``educational institution'' and that a licensing or certification test 
is deemed to be a ``course'' as those terms are applied under and for 
purposes of, among other sections, 38 U.S.C. 3673, 3678, and 3679. The 
information collections in Sec. Sec.  21.4250(b), 21.4258, and 21.4259 
as proposed to be amended are required notices regarding the approval 
or disapproval of courses. The information collection in Sec.  21.4259 
also includes suspension notices; the SAAs may suspend approval of the 
course for new enrollments while giving an educational institution 60 
days to correct any deficiencies. The collection in Sec.  21.4154 is 
required to implement 38 U.S.C. 3674. VA uses the reports described in 
Sec.  21.4154 to determine reimbursement of expenses and allocation of 
payments.
    Description of need for information and proposed use of 
information: The information in Sec.  21.4154 is needed to determine 
reimbursement of expense the SAAs incur. VA also needs the information 
to obtain workload information to support budget requests in 
determining the amount of appropriations needed to adequately reimburse 
the SAAs. The information in Sec. Sec.  21.4250(b), 21.4258, and 
21.4259 as proposed to be amended is needed to notify educational 
institutions, training establishments, and organizations and entities 
that offer licensing or certification tests of the approval or 
disapproval of the courses or tests they offer. VA needs the 
information to determine whether or not payment of educational 
assistance is permitted for enrollment in courses, training programs, 
or to reimburse the cost of a licensing or certification test. Under 38 
U.S.C. 3680, VA may not award educational assistance to any eligible 
veteran or eligible person if his or her education or training program 
is not approved. Similarly, under 38 U.S.C. 3689, VA may not award 
educational assistance for any licensing or certification test unless 
the requirements in section 3689 are met.
    Description of likely respondents: SAAs.
    Estimated number of respondents: 59.
    Estimated frequency of responses: For reports, quarterly. For 
notices, on occasion, whenever an SAA approves, disapproves, or 
suspends approvals under Sec.  21.4250(b), 21.4258, or 21.4259 as 
proposed to be amended.
    Estimated total annual reporting and recordkeeping burden: 37,647 
hours of reporting burden. There is no recordkeeping burden because the 
records the SAAs would keep are records they would keep in normal 
operations.
    Estimated average burden per respondent: 638 hours.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Order 
classifies a rule as a significant regulatory action requiring review 
by the Office of Management and Budget if it meets any one of a number 
of specified conditions, including: having an annual effect on the 
economy of $100 million or more, creating a serious inconsistency or 
interfering with an action of another agency, materially altering the 
budgetary impact of entitlements or the rights of entitlement 
recipients, or raising novel legal or policy issues. VA has examined 
the economic, legal, and policy implications of this proposed rule and 
has concluded that it is a significant regulatory action under 
Executive Order 12866 because it raises novel policy issues.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this 
proposed rule would 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. Although this proposed 
rule would affect some small entities that are testing organizations or 
educational institutions, any economic impact on them would be minor. 
The portions of this proposed rule that could have an economic impact 
on these small entities are recordkeeping, reporting, and application 
for approval requirements, the burdens for which would be the minor 
ones discussed in this preamble under the heading Paperwork Reduction 
Act of 1995. Pursuant to 5 U.S.C. 605(b), this proposed rule, 
therefore, is exempt from the initial and final regulatory flexibility 
analyses requirements of sections 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
programs that would be affected by this proposed rule are 64.117, 
Survivors and Dependents Educational Assistance; 64.120, Post-Vietnam 
Era Veterans' Educational Assistance; and 64.124, All-Volunteer Force 
Educational Assistance. This proposed rule would also affect the 
Montgomery GI Bill--Selected Reserve program, for which there is no 
Catalog of Federal Domestic Assistance number.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict 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: November 3, 2005.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.

    For the reasons set out above, VA proposes to amend 38 CFR part 21 
(subparts B, D, G, and K) as follows:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart B--Claims and Applications for Educational Assistance

    1. The authority citation for part 21, subpart B is revised to read 
as follows:

    Authority: 38 U.S.C. 501(a), ch. 51, and as noted in specific 
sections.

    2. Section 21.1029 is amended by:
    a. Revising the introductory text.
    b. In paragraph (b)(1), removing ``Sec.  21.1032'' and adding, in 
its place, ``Sec.  21.1033''.
    c. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), 
(e), and (i), respectively.

[[Page 9201]]

    d. Adding new paragraph (c).
    e. In newly redesignated paragraph (e)(1)(ii), removing ``paragraph 
(c)(1)(i)'' and adding, in its place, ``paragraph (d)(1)(i)''.
    f. In newly redesignated paragraph (e)(4), removing ``school'' and 
adding, in its place, ``educational institution or training 
establishment''.
    g. Adding paragraphs (f), (g), and (h).
    The revision and additions read as follows:


Sec.  21.1029  Definitions.

    The following definitions of terms apply to this subpart and 
subparts C, D, F, G, H, K, and L, to the extent that the terms are not 
otherwise defined in those subparts:
* * * * *
    (c) Educational institution. The term educational institution 
means:
    (1) A vocational school or business school;
    (2) A junior college, teachers' college, college, normal school, 
professional school, university, or scientific or technical 
institution;
    (3) A public or private elementary school or secondary school;
    (4) Any entity, other than an institution of higher learning, that 
provides training for completion of a State-approved alternative 
teacher certification program;
    (5) An organization or entity offering a licensing or certification 
test; or
    (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))


* * * * *
    (f) Information. The term information means nonevidentiary facts, 
such as the claimant's Social Security number or address, or the name 
of the educational institution the claimant is attending.

(Authority: 38 U.S.C. 5101, 5102, 5103)


    (g) Substantially complete application. (1) The term substantially 
complete application means, for an individual's first application for 
educational assistance administered by VA, an application containing--
    (i) The claimant's name;
    (ii) His or her relationship to the veteran, if applicable;
    (iii) Sufficient information for VA to verify the claimed service, 
if applicable;
    (iv) The benefit claimed;
    (v) The program of education, if applicable; and
    (vi) The name of the educational institution or training 
establishment the claimant intends to attend, if applicable.
    (2) For subsequent applications for educational assistance 
administered by VA, a substantially complete application means an 
application containing the information specified in paragraphs 
(g)(1)(i) through (g)(1)(vi) of this section, except that the 
application may omit any information specified in paragraphs (g)(1)(ii) 
or (g)(1)(iii) of this section that is already of record with VA.

(Authority: 38 U.S.C. 5102, 5103, 5103A)


    (h) Training establishment.The term training establishment means 
any establishment providing apprentice or other training on-the-job, 
including those under the supervision of a college, university, any 
State department of education, any State apprenticeship agency, any 
State board of vocational education, any joint apprenticeship 
committee, the Bureau of Apprenticeship and Training established in 
accordance with 29 U.S.C. chapter 4C, or any agency of the Federal 
government authorized to supervise such training.

(Authority: 38 U.S.C. 3452(e), 3501(a)(9))


    3. Section 21.1030 is revised to read as follows:


Sec.  21.1030  Claims.

    (a) Claim for educational assistance. (1) The first time an 
individual claims educational assistance administered by VA for pursuit 
of a program of education, he or she must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose.
    (2) If an individual changes his or her program of education or 
place of training after filing his or her first application for 
educational assistance, he or she must file an application requesting 
the change of program or place of training using a form the Secretary 
prescribes for that purpose.
    (3) A servicemember must consult with his or her education service 
officer before filing an application for educational assistance, 
whether it is the first application or an application to request a 
change of program or place of training.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 501, 3034(a), 3241(a), 
3471, 3513, 5101(a))


    (b) Filing a claim for educational assistance to pay for a 
licensing or certification test. To receive educational assistance to 
pay for a licensing or certification test, an individual must file a 
claim for educational assistance.
    (1) If the claim is the first claim for educational assistance 
administered by VA, the individual must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose and must include the information described in paragraphs 
(b)(2)(i) through (b)(2)(vi) of this section.
    (2) If the claim is the second or subsequent claim for educational 
assistance, the claim must include:
    (i) The name of the test;
    (ii) The name and address of the organization or entity issuing the 
license or certificate;
    (iii) The date the claimant took the test;
    (iv) The cost of the test;
    (v) A statement authorizing release of the claimant's test 
information to VA, such as: ``I authorize release of my test 
information to VA''; and
    (vi) Such other information as the Secretary may require.

(Authority: 38 U.S.C. 501, 3034(a), 3241(a), 3471, 3513, 5101(a))


    (c) Filing a claim for educational assistance to supplement tuition 
assistance provided under a program administered by the Secretary of a 
military department. To receive tuition assistance top-up as defined in 
Sec.  21.4200(hh), an individual must file a claim for educational 
assistance.
    (1) If the claim is the first claim for educational assistance 
administered by VA, the individual must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose.
    (2) If the claim is the second or subsequent claim for educational 
assistance, the claimant may submit a statement that he or she wishes 
to receive tuition assistance top-up.
    (3) The claimant must also submit a copy of the form(s) that the 
military service with jurisdiction requires for tuition assistance and 
that had been presented to the educational institution, covering the 
course or courses for which the claimant wants tuition assistance top-
up. Examples of these forms include:
    (i) DA Form 2171, Request for Tuition Assistance-Army Continuing 
Education System;
    (ii) AF Form 1227, Authority for Tuition Assistance-Education 
Services Program;
    (iii) NAVMC 10883, Application for Tuition Assistance, and either 
NAVEDTRA 1560/5, Tuition Assistance Authorization or NAVMC (page 2), 
Tuition Assistance Authorization;

[[Page 9202]]

    (iv) Department of Homeland Security, USCG CG-4147, Application for 
Off-Duty Assistance; and
    (v) Request for Top-Up: eArmyU Program.
    (4) The claimant must also provide to VA the following information, 
to the extent it is not contained on any form filed under paragraph 
(c)(1) or (c)(3) of this section:
    (i) His or her name;
    (ii) His or her Social Security number;
    (iii) The name of the educational institution;
    (iv) The name of the course or courses for which the claimant wants 
educational assistance;
    (v) The number of the course or courses;
    (vi) The number of credit hours for each course;
    (vii) The beginning and ending date of each course;
    (viii) The cost of the course or courses; and
    (ix) If the claimant doesn't want to receive the full amount of 
that cost not met by the Secretary of the military department 
concerned, the portion that the claimant wishes to receive.
    (5) If the claimant's military department uses an electronic 
tuition assistance application process with electronic signatures, VA 
will accept an electronic transmission of the approved tuition 
assistance application directly from the military department concerned 
on behalf of the claimant if--
    (i) The electronic tuition assistance application indicates the 
servicemember's intent to claim tuition-assistance top-up; and
    (ii) The information described in paragraph (c)(4) of this section 
is included in the electronic application.

(Authority: 38 U.S.C. 501, 3034(a), 3241(a), 3471, 3513, 5101(a))


(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0074, 2900-0098, 2900-0099, 2900-0154, 2900-XXXX, and 2900-XXXX.)

    4. Section 21.1031 is amended by:
    a. In paragraph (a), removing ``claim forms,'' and adding, in its 
place, ``VA claim forms and''.
    b. Revising paragraph (b) to read as follows.


Sec.  21.1031  VA responsibilities when a claim is filed.

    (b) VA has a duty to notify claimants of necessary information or 
evidence. (1) Except when a claim cannot be substantiated because there 
is no legal basis for the claim, or undisputed facts render the 
claimant ineligible for the claimed benefit, when VA receives a 
complete or substantially complete application for educational 
assistance provided under subpart C, D, G, H, K, or L of this part VA 
will--
    (i) Notify the claimant of any information and evidence that is 
necessary to substantiate the claim; and
    (ii) Inform the claimant which information and evidence, if any, 
the claimant is to provide to VA and which information and evidence, if 
any, VA will try to obtain for the claimant.
    (2) The information and evidence that VA, pursuant to paragraph 
(b)(1) of this section informs the claimant that the claimant must 
provide, must be provided within one year from the date of the notice. 
If VA does not receive such information and evidence from the claimant 
within that time period, VA may adjudicate the claim based on the 
information and evidence in the file.
    (3) If the claimant has not responded to the request within 30 
days, VA may decide the claim before the expiration of the one-year 
period prescribed in paragraph (b)(2) of this section, based on all the 
information and evidence in the file, including information and 
evidence it has obtained on behalf of the claimant. If VA does so, 
however, and the claimant subsequently provides the information and 
evidence within one year of the date of the request, VA must 
readjudicate the claim. If VA's decision on a readjudication is 
favorable to the claimant, the award shall take effect as if the prior 
decision by VA on the claim had not been made.
    (4) If VA receives an incomplete application for benefits, it will 
notify the claimant of the information necessary to complete the 
application and will defer assistance until the claimant submits this 
information. If the information necessary to complete the application 
is not received by VA within one year from the date of such notice, VA 
cannot pay or provide any benefits based on that application.
    (5) For the purpose of this paragraph, if VA must notify the 
claimant, VA will provide notice to:
    (i) The claimant;
    (ii) His or her fiduciary, if any; and
    (iii) His or her representative, if any.

(Authority: 38 U.S.C. 5102, 5103, 5103A(a)(3))


Sec.  21.1032  [Redesignated and amended]

    5. Section 21.1032 is redesignated as Sec.  21.1033, and in newly 
redesignated Sec.  21.1033, paragraph (b) is removed and reserved.
    6. New Sec.  21.1032 is added to read as follows:


Sec.  21.1032  VA has a duty to assist claimants in obtaining evidence.

    (a) VA's duty to assist begins when VA receives a complete or 
substantially complete application. (1) Except as provided in paragraph 
(d) of this section, upon receipt of a complete or substantially 
complete application for educational assistance under subpart C, D, G, 
H, K, or L of this part, VA will--
    (i) Make reasonable efforts to help a claimant obtain evidence 
necessary to substantiate the claim; and
    (ii) Give the assistance described in paragraphs (b) and (c) of 
this section to an individual attempting to reopen a finally decided 
claim.
    (2) VA will not pay any fees a custodian of records may charge to 
provide the records VA requests.

(Authority: 38 U.S.C. 5103A)


    (b) Obtaining records not in the custody of a Federal department or 
agency. (1) VA will make reasonable efforts to obtain relevant records 
not in the custody of a Federal department or agency. These records 
include relevant records from:
    (i) State or local governments;
    (ii) Private medical care providers;
    (iii) Current or former employers; and
    (iv) Other non-Federal governmental sources.
    (2) The reasonable efforts described in paragraph (b)(1) of this 
section will generally consist of an initial request for the records 
and, if VA does not receive the records, at least one follow-up 
request. The following are exceptions to this provision concerning the 
number of requests that VA generally will make:
    (i) VA will not make a follow-up request if a response to the 
initial request indicates that the records sought do not exist or that 
a follow-up request for the records would be futile.
    (ii) If VA receives information showing that subsequent requests to 
the initial or another custodian could result in obtaining the records 
sought, reasonable efforts will include an initial request and, if VA 
does not receive the records, at least one follow-up request to the new 
source or an additional request to the original source.
    (3) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from non-Federal agency or department 
custodians. The claimant must provide enough information to identify 
and locate the existing records, including--
    (i) The person, company, agency, or other custodian holding the 
records;
    (ii) The approximate time frame covered by the records; and
    (iii) In the case of medical treatment records, the condition for 
which treatment was provided.

[[Page 9203]]

    (4) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the person, company, agency, 
or other custodian holding the records.

(Authority: 38 U.S.C. 5103A)


    (c) Obtaining records in the custody of a Federal department or 
agency. (1) VA will make as many requests as are necessary to obtain 
relevant records from a Federal department or agency. These records 
include but are not limited to:
    (i) Military records;
    (ii) Medical and other records from VA medical facilities;
    (iii) Records from non-VA facilities providing examination or 
treatment at VA expense; and
    (iv) Records from other Federal agencies.
    (2) VA will end its efforts to obtain records from a Federal 
department or agency only if VA concludes that the records sought do 
not exist or that further efforts to obtain those records would be 
futile. Cases in which VA may conclude that no further efforts are 
required include cases in which the Federal department or agency 
advises VA that the requested records do not exist or that the 
custodian of such records does not have them.
    (3) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from Federal department or agency 
custodians. At VA's request, the claimant must provide enough 
information to identify and locate the existing records, including--
    (i) The custodian or agency holding the records;
    (ii) The approximate time frame covered by the records; and
    (iii) In the case of medical treatment records, the condition for 
which treatment was provided.
    (4) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the custodian or agency 
holding the records.

(Authority: 38 U.S.C. 5103A)


    (d) Circumstances where VA will refrain from or discontinue 
providing assistance. VA will refrain from providing assistance in 
obtaining evidence for a claim if the substantially complete or 
complete application for benefits indicates that there is no reasonable 
possibility that any assistance VA would provide to the claimant would 
substantiate the claim. VA will discontinue providing assistance in 
obtaining evidence for a claim if the evidence obtained indicates that 
there is no reasonable possibility that further assistance would 
substantiate the claim. Circumstances in which VA will refrain from or 
discontinue providing assistance in obtaining evidence include, but are 
not limited to:
    (1) The claimant's ineligibility for the benefit sought because of 
lack of qualifying service, lack of veteran status, or other lack of 
legal eligibility;
    (2) Claims that are inherently not credible or clearly lack merit; 
and
    (3) An application requesting a benefit to which the claimant is 
not entitled as a matter of law.

(Authority: 38 U.S.C. 5103A)


    (e) Duty to notify claimant of inability to obtain records. (1) VA 
will notify the claimant either orally or in writing when VA:
    (i) Makes reasonable efforts to obtain relevant non-Federal 
records, but is unable to obtain them; or
    (ii) After continued efforts to obtain Federal records, concludes 
that it is reasonably certain they do not exist or that further efforts 
to obtain them would be futile.
    (2) For non-Federal records requests, VA may provide the notice to 
the claimant at the same time it makes its final attempt to obtain the 
relevant records.
    (3) VA will make a record of any oral notice conveyed under 
paragraph (e) of this section to the claimant.
    (4) The notice to the claimant must contain the following 
information:
    (i) The identity of the records VA was unable to obtain;
    (ii) An explanation of the efforts VA made to obtain the records;
    (iii) The fact described in paragraph (e)(1)(i) or (e)(1)(ii) of 
this section;
    (iv) A description of any further action VA will take regarding the 
claim, including, but not limited to, notice that VA will decide the 
claim based on the evidence of record unless the claimant submits the 
records VA was unable to obtain; and
    (v) A notice that the claimant is ultimately responsible for 
obtaining the evidence.
    (5) If VA becomes aware of the existence of relevant records before 
deciding the claim, VA will notify the claimant of the existence of 
such records and ask that the claimant provide a release for the 
records. If the claimant does not provide any necessary release of the 
relevant records that VA is unable to obtain, VA will ask that the 
claimant obtain the records and provide them to VA.
    (6) For the purpose of this section, if VA must notify the 
claimant, VA will provide notice to:
    (i) The claimant;
    (ii) His or her fiduciary, if any; and
    (iii) His or her representative, if any.

(Authority: 38 U.S.C. 5102(b), 5103(a), 5103A)


Subpart D--Administration of Educational Assistance Programs

    7. The authority citation for part 21, subpart D is revised 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, and as noted in specific sections.

    8. Section 21.4005 is amended by:
    a. Adding introductory text to the section.
    b. Revising the paragraph (a) heading and paragraphs (a)(1) and 
(a)(2), and the authority citation at the end of paragraph (a).
    c. Redesignating paragraphs (a)(3) and (a)(4) as paragraphs (a)(5) 
and (a)(7), respectively.
    d. Adding new paragraphs (a)(3), (a)(4), and (a)(6).
    e. In newly redesignated paragraph (a)(5), removing ``a school'' 
and adding, in its place, ``an educational institution'' and removing 
``such school.'' and adding, in its place, ``such educational 
institution.''.
    f. Redesignating paragraphs (b)(1)(ii)(a) through (b)(1)(ii)(f) as 
paragraphs (b)(1)(ii)(A) through (b)(1)(ii)(F), respectively.
    g. Revising newly redesignated paragraph (b)(1)(ii)(F).
    h. In paragraphs (b)(1)(i) and (b)(2)(i), removing ``school'' and 
adding, in its place, ``educational institution''.
    i. Redesignating paragraphs (b)(2)(ii)(a) and (b)(2)(ii)(b) as 
paragraphs (b)(2)(ii)(A) and (b)(2)(ii)(B), respectively.
    j. Removing the authority citation following newly redesignated 
paragraph (b)(2)(ii)(A) and adding an authority citation following 
newly redesignated paragraph (b)(2)(ii)(B).
    k. In newly redesignated paragraphs (b)(1)(ii)(D), (b)(2)(ii)(A), 
and (b)(2)(ii)(B), removing ``schools'' and adding, in its place, 
``educational institutions''.
    l. In newly redesignated paragraph (b)(2)(ii)(B), removing 
``persons.'' and adding, in its place, ``persons, or desiring to offer 
licensing or certification tests to veterans or eligible persons.''.
    m. In paragraph (c)(1), removing ``request for'' and adding, in its 
place, ``requests for''.
    n. Removing the authority citation following paragraph (c)(2) and 
adding an authority citation following paragraph (c)(3).
    o. Revising paragraph (d).

[[Page 9204]]

    p. In paragraph (e), redesignating paragraphs (e)(1) through (e)(3) 
as paragraphs (e)(1)(i) through (e)(1)(iii), respectively; designating 
the introductory text following the paragraph heading as paragraph 
(e)(1) introductory text; and designating the undesignated paragraph as 
paragraph (e)(2).
    q. In newly redesignated paragraph (e)(1) introductory text, 
removing ``when:'' and adding, in its place, ``when, in circumstances 
involving a finding of conflicting interests:''.
    r. In newly redesignated paragraph (e)(2), removing ``school'' and 
adding, in its place, ``educational institution''.
    s. Adding an authority citation for paragraph (e).
    t. Removing paragraph (f).
    The revisions and additions read as follows:


Sec.  21.4005  Conflicting interests.

    For the purposes of this section, a person will be considered to be 
an ``officer'' of the State approving agency or VA when he or she has 
authority to exercise supervisory authority, and ``educational 
institution'' includes an organization or entity offering licensing or 
certification tests.

(Authority: 38 U.S.C. 3683, 3689)


    (a) A conflict of interest can cause the dismissal of a VA or State 
approving agency officer or employee and other adverse consequences. 
(1) An officer or employee of VA will be immediately dismissed from his 
or her office or employment, if while such an officer or employee he or 
she has owned any interest in, or received any wages, salary, 
dividends, profits, gratuities, or services from any educational 
institution operated for profit--
    (i) In which a veteran or eligible person was pursuing a course of 
education under 10 U.S.C. chapter 1606 or 38 U.S.C. chapter 30, 32, 34, 
35, or 36; or
    (ii) Offering a licensing or certification test that is approved 
for payment of educational assistance under 38 U.S.C. chapter 30, 32, 
or 35 to veterans or eligible persons who take that test.
    (2) Except as provided in paragraph (a)(3) or (c) of this section, 
VA will discontinue payments under Sec.  21.4153 to a State approving 
agency when the Secretary finds that any individual who is an officer 
or employee of a State approving agency has, while he or she was such 
an officer or employee, owned any interest in, or received any wages, 
salary, dividends, profits, gratuities, or services from any 
educational institution operated for profit--
    (i) In which a veteran or eligible person was pursuing a course of 
education or training under 10 U.S.C. chapter 1606 or 38 U.S.C. chapter 
30, 32, 34, 35, or 36; or
    (ii) Offering a licensing or certification test that is approved 
for payment of educational assistance under 38 U.S.C. chapter 30, 32, 
or 35 to veterans or eligible persons who take that test.
    (3) VA will not discontinue payments to a State approving agency 
under paragraph (a)(2) of this section if the State approving agency, 
after learning that it has any officer or employee described in that 
paragraph, acts without delay to end the employment of that individual.
    (4) If VA discontinues payments to a State approving agency 
pursuant to paragraph (a)(2) of this section, VA will not resume these 
payments while such an individual is an officer or employee of the:
    (i) State approving agency;
    (ii) State Department of Veterans Affairs; or
    (iii) State Department of Education.
* * * * *
    (6) If a State approving agency finds that any officer or employee 
of VA or of the State approving agency owns an interest in, or receives 
wages, salary, dividends, profits, gratuities, or services from an 
organization or entity, operated for profit, that offers licensing or 
certification tests, the State approving agency:
    (i) Will not approve any licensing or certification test that 
organization or entity offers; and
    (ii) Will withdraw approval of any licensing or certification test 
that organization or entity offers.
* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241, 3683, 3689)


    (b) * * *
    (1) * * *
    (ii) * * *
    (F) His or her position is not connected in any way with the 
inspection, approval, or supervision of educational institutions 
desiring to train veterans or eligible persons or to offer a licensing 
or certification test; or with the processing of claims by or making 
payments to veterans and eligible persons for taking an approved 
licensing or certification test.
    (2) * * *
    (ii) * * *
    (B) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241, 3683, 3689)


    (c) * * *
    (3) * * *

(Authority: 38 U.S.C. 512(a), 3683)


    (d) Notice when VA does not grant a requested waiver. When VA has 
denied a request for waiver of application of paragraph (a)(1) or 
(a)(2) of this section, VA will immediately notify the State approving 
agency and the educational institution:
    (1) That the approval of courses or licensing and certification 
tests offered by the educational institution must be withdrawn;
    (2) The reasons for the withdrawal of approval; and
    (3) The conditions that will permit the courses or such tests to be 
approved again.

(Authority: 38 U.S.C. 3683, 3689(d))


    (e) * * *

(Authority: 38 U.S.C. 3683, 3690, 5104)


    9. Section 21.4008 is revised to read as follows:


Sec.  21.4008  Prevention of overpayments.

    (a) Prevention of overpayments to veterans and eligible persons 
enrolled in educational institutions. When approval of a course may be 
withdrawn, and overpayments may exist or may be created, VA may suspend 
further payments to veterans and eligible persons enrolled in the 
educational institution offering the course until the question of 
withdrawing approval is resolved. See Sec.  21.4210.

(Authority: 38 U.S.C. 3690(b))


    (b) Prevention of overpayments to veterans and eligible persons 
taking licensing and certification tests. When approval of a licensing 
or certification test may be withdrawn, and overpayments may exist or 
may be created, VA may suspend payments to veterans and eligible 
persons taking that test until the question of withdrawing approval is 
resolved. See Sec.  21.4210.

(Authority: 38 U.S.C. 3689(a), 3690(b))


    10. Section 21.4009 is amended by:
    a. Revising the section heading.
    b. Adding introductory text.
    c. Revising paragraphs (c) and (d).
    d. In paragraph (e), removing ``A school'' and adding, in its 
place, ``An educational institution'', and removing ``the school'' and 
adding, in its place, ``the educational institution''.
    e. Adding authority citations following paragraphs (e) through (j), 
respectively.
    f. In paragraph (f), removing ``veteran'' each place that it 
appears and adding, in its place, ``veteran, reservist,'', and removing 
``school'' each place that it appears and adding, in its place, 
``educational institution''.
    g. In paragraphs (g) and (h), removing ``the school'' each place 
that it appears

[[Page 9205]]

and adding, in its place, ``the educational institution''.
    h. In paragraph (g), in its heading, removing ``school'' and 
adding, in its place, ``educational institution'' and, in its text, 
removing ``The school'' and adding, in its place, ``The educational 
institution''.
    i. In paragraph (i), removing ``school and'' and adding, in its 
place, ``educational institution and''.
    j. In paragraph (j), removing ``a school's'' and adding, in its 
place, ``an educational institution's''.
    The additions and revisions read as follows:


Sec.  21.4009  Waiver or recovery of overpayments.

    For the purposes of this section, ``educational institution'' 
includes an organization or entity offering licensing or certification 
tests.
* * * * *
    (c) Committee on School Liability. (1) Each VA Regional Processing 
Office shall have a Committee on School Liability. For the purposes of 
this section, the Manila Regional Office is considered the VA Regional 
Processing Office of jurisdiction for educational institutions located 
in the Philippines.
    (2) The Secretary delegates to each Committee on School Liability, 
and to any panel that the chairperson of the Committee may designate 
and draw from the Committee, the authority to find whether an 
educational institution is liable for an overpayment.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 512(a), 3034(a), 3241, 
3685, 3689(d))


    (d) Initial decision. (1) The Education Officer of the VA Regional 
Processing Office of jurisdiction, or the Service Center Manager when 
the Manila Regional Office is considered the VA Regional Processing 
Office of jurisdiction, will decide whether there is evidence that 
would warrant a finding that an educational institution is potentially 
liable for an overpayment.
    (2) Following each finding of potential liability, the Finance 
Officer of the VA Regional Processing Office of jurisdiction will 
notify the educational institution in writing of VA's intent to apply 
the liability provisions of paragraph (a) of this section. The notice 
will--
    (i) Identify the students who were overpaid;
    (ii) Identify the veterans and eligible persons who took the 
licensing or certification test and were overpaid;
    (iii) Set out in the case of each student, or in the case of each 
veteran or eligible person who took the test, the educational 
institution's actions or omissions which resulted in the finding that 
the educational institution was potentially liable for the overpayment; 
and
    (iv) State that VA will determine liability on the basis of the 
evidence of record unless the VA Regional Processing Office of 
jurisdiction receives additional evidence or a request for a hearing 
within 30 days of the date the educational institution received the 
notice.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 512(a), 3034(a), 3241, 
3685, 3689(d))


    (e) * * *

(Authority: 38 U.S.C. 512(a), 3685, 3689)


    (f) * * *

(Authority: 38 U.S.C. 3685, 3689)


    (g) * * *

(Authority: 38 U.S.C. 512(a), 3685, 3689)


    (h) * * *

(Authority: 38 U.S.C. 512(a), 3685, 3689)


    (i) * * *

(Authority: 38 U.S.C. 512(a), 3685, 3689)


    (j) * * *

(Authority: 38 U.S.C. 512(a), 3685, 3689)


    11. Section 21.4131 is amended by:
    a. Revising the introductory text.
    b. Redesignating paragraph (a)(1) introductory text and paragraphs 
(a)(1)(i) through (a)(1)(iii) as paragraph (a)(1)(i) and paragraphs 
(a)(1)(i)(A) through (a)(1)(i)(C), respectively; redesignating 
paragraph (a)(2) introductory text and paragraphs (a)(2)(i) and 
(a)(2)(ii) as paragraph (a)(1)(ii) and paragraphs (a)(1)(ii)(A) and 
(a)(1)(ii)(B), respectively; and adding new paragraph (a)(1) 
introductory text and new paragraph (a)(2).
    c. Revising the authority citation following paragraph (a).
    d. Redesignating paragraph (d)(1) introductory text and paragraphs 
(d)(1)(i) through (d)(1)(iv) as paragraph (d)(1)(i) and paragraphs 
(d)(1)(i)(A) through (d)(1)(i)(D), respectively; redesignating 
paragraph (d)(2) introductory text and paragraphs (d)(2)(i) and 
(d)(2)(ii) as paragraph (d)(1)(ii) and paragraphs (d)(1)(ii)(A) and 
(d)(1)(ii)(B), respectively; and adding new paragraph (d)(1) 
introductory text and new paragraph (d)(2).
    e. Revising the authority citation following paragraph (d).
    The revisions and additions read as follows:


Sec.  21.4131  Commencing dates.

    VA will determine under this section the commencing date of an 
award or increased award of educational assistance provided pursuant to 
subpart C or G. When more than one paragraph in this section applies, 
VA will award educational assistance using the latest of the applicable 
commencing dates.
    (a) * * *
    (1) For other than licensing or certification tests.
* * * * *
    (2) For licensing or certification tests. VA will award educational 
assistance for the cost of a licensing or certification test only when 
the veteran or servicemember takes such test--
    (i) While the test is approved under 38 U.S.C. chapter 36;
    (ii) While the veteran or servicemember is eligible for educational 
assistance under this subpart; and
    (iii) No more than one year before the date VA receives a claim for 
reimbursement of the cost of the test.

(Authority: 38 U.S.C. 3672, 3689, 5110, 5113)


* * * * *
    (d) * * *
    (1) For other than licensing or certification tests.
* * * * *
    (2) For licensing or certification tests. VA will award educational 
assistance for the cost of a licensing or certification test only when 
the veteran or servicemember takes such test--
    (i) While the test is approved under 38 U.S.C. chapter 36;
    (ii) While the veteran or servicemember is eligible for educational 
assistance under this subpart; and
    (iii) No more than one year before the date VA receives a claim for 
reimbursement of the cost of the test.

(Authority: 38 U.S.C. 3512, 3672, 3689, 5110, 5113)


Sec.  21.4146  [Amended]

    12. In Sec.  21.4146, paragraph (c) is amended by removing 
``institution'' both places it appears, and adding, in its place, 
``institution (other than an organization or entity offering a 
licensing or certification test)''.
    13. Section 21.4150 is amended by:
    a. In the introductory text of paragraph (c), removing ``will, with 
respect to a State, be deemed to refer to VA when that State:'' and 
adding, in its place, ``will be deemed to refer to VA:''.
    b. Redesignating paragraphs (c)(1) and (2) as paragraphs (c)(1)(i) 
and (ii), respectively.
    c. In newly redesignated paragraph (c)(1)(ii), removing ``Sec.  
21.4153 of this part.'' and adding, in its place, ``Sec.  21.4153; 
and''.

[[Page 9206]]

    d. Adding paragraph (c)(1) introductory text, new paragraph (c)(2), 
and paragraph (g).
    e. Revising the cross reference at the end of the section.
    The additions and revision read as follows:


Sec.  21.4150  Designation.

* * * * *
    (c) * * *
    (1) With respect to a State, when that State:
* * * * *
    (2) When VA has approval, disapproval, or suspension authority 
(under paragraphs (d), (e), (f), or (g) of this section, Sec.  21.4152, 
or as otherwise provided by law).
* * * * *
    (g) Approval under 38 U.S.C. 3689 of a licensing or certification 
test offered by any agency or instrumentality of the Federal government 
will be under the authority of the Secretary.

(Authority: 38 U.S.C. 3689)


    Cross Reference: Course and licensing and certification test 
approval; jurisdiction and notices. See Sec.  21.4250.

    14. Section 21.4151 is amended by:
    a. In paragraph (b)(3), removing the word ``and''.
    b. Redesignating paragraph (b)(4) and its authority citation as 
paragraph (b)(6) and revising the authority citation following newly 
redesignated paragraph (b)(6).
    c. Adding new paragraph (b)(4) and paragraph (b)(5).
    The additions and revision read as follows:


Sec.  21.4151  Cooperation.

* * * * *
    (b) * * *
    (4) Determining those licensing and certification tests that may be 
approved for cost reimbursement to veterans and eligible persons;
    (5) Ascertaining whether an organization or entity offering an 
approved licensing or certification test complies at all times with the 
provisions of 38 U.S.C. 3689; and
    (6) * * *

(Authority: 38 U.S.C. 3672, 3673, 3674, 3689)


* * * * *


Sec.  21.4152  [Amended]

    15. Section 21.4152(b)(5) is amended by removing ``schools or 
courses'' both times it appears and adding, in its place, ``schools, 
courses, or licensing or certification tests''.
    16. Section 21.4153 is amended by:
    a. Adding introductory text.
    b. Removing the authority citation following paragraph (a)(1)(ii).
    c. Revising the authority citation following paragraph (a)(2)(ii).
    The revisions and addition read as follows:


Sec.  21.4153  Reimbursement of expenses.

    For the purposes of this section, other than paragraph (d)(4) of 
this section, ``educational institution'' includes an organization or 
entity offering licensing or certification tests.
    (a) * * *
    (2) * * *
    (ii) * * *

(Authority: 38 U.S.C. 3674, 3689)


* * * * *
    17. Section 21.4154 is amended by revising the information 
collection approval parenthetical at the end of the section to read as 
follows:


Sec.  21.4154  Report of activities.

* * * * *
    (The Office of Management and Budget has approved the 
information collection provisions in this section under control 
number 2900-0051.)

    18. Section 21.4200 is amended by:
    a. In paragraph (a)(5), removing ``during the period beginning on 
November 2, 1994, and ending on September 30, 1996''.
    b. Adding introductory text.
    c. Revising paragraph (c).
    d. Adding paragraphs (ee), (ff), (gg), (hh), and (ii).
    The revision and additions read as follows:


Sec.  21.4200  Definitions.

    The definitions in this section apply to this subpart, except as 
otherwise provided. The definitions of terms defined in this section 
also apply to subparts C, F, G, H, K, and L if they are not otherwise 
defined for purposes of those subparts.
* * * * *
    (c) Training establishment. The term training establishment means 
any establishment providing apprentice or other training on-the-job, 
including those under the supervision of a college, university, any 
State department of education, any State apprenticeship agency, any 
State board of vocational education, any joint apprenticeship 
committee, the Bureau of Apprenticeship and Training established in 
accordance with 29 U.S.C. chapter 4C, or any agency of the Federal 
government authorized to supervise such training.

(Authority: 38 U.S.C. 3452(e), 3501(a)(9))


* * * * *
    (ee) Certification test. The term certification test means a test 
an individual must pass in order to receive a certificate that provides 
an affirmation of an individual's qualifications in a specified 
occupation.

(Authority: 38 U.S.C. 3452(b), 3501(a)(5), 3689)


    (ff) Licensing test. The term licensing test means a test offered 
by a State, local, or Federal agency, the passing of which is a means, 
or part of a means, to obtain a license. That license must be required 
by law in order for the individual to practice an occupation in the 
political jurisdiction of the agency offering the test.

(Authority: 38 U.S.C. 3452(b), 3501(a)(5), 3689)


    (gg) Organization or entity offering a licensing or certification 
test. (1) The term organization or entity offering a licensing or 
certification test means:
    (i) An organization or entity that causes a licensing test to be 
given and that will issue a license to an individual who passes the 
test;
    (ii) An organization or entity that causes a certification test to 
be given and that will issue a certificate to an individual who passes 
the test; or
    (iii) An organization or entity that administers a licensing or 
certification test for the organization or entity that will issue a 
license or certificate, respectively, to the individual who passes the 
test, provided that the administering organization or entity can 
provide all required information and certifications under Sec.  21.4268 
to the State approving agency and to VA.
    (2) This term does not include:
    (i) An organization or entity that develops and/or proctors a 
licensing or certification test but does not issue the license or 
certificate; or
    (ii) An organization or entity that administers a test but does not 
issue the license or certificate if that administering organization or 
entity cannot provide all required information and certifications under 
Sec.  21.4268 to the State approving agency and to VA.

(Authority: 38 U.S.C. 3452(b), 3501(a)(5), 3689)


    (hh) Tuition assistance top-up. The term tuition assistance top-up 
means a payment of basic educational assistance to meet all or a 
portion of the charges of an educational institution for the education 
or training of a servicemember that are not met by the Secretary of the 
military department concerned under 10 U.S.C. 2007(a) or (c).

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


    (ii) VA Regional Processing Office. The term VA Regional Processing 
Office

[[Page 9207]]

means a VA office where claims for educational assistance under 38 
U.S.C. chapters 30, 32, and 35 and 10 U.S.C. chapter 1606 are allowed 
or disallowed.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241, 3685, 3689)


* * * * *
    19. Section 21.4206 is amended by:
    a. In the introductory text and paragraph (a), removing ``Chapter'' 
and ``Chapters'' each place that they appear, and adding, in their 
place, ``chapter'' and removing ``on October 31 of that'' and adding, 
in its place, ``during that calendar''.
    b. Revising paragraph (b).
    The revision reads as follows:


Sec.  21.4206  Reporting fee.

* * * * *
    (b) In computing the reporting fee VA will not count a veteran or 
servicemember whose only receipt of educational assistance under 38 
U.S.C. chapter 30 during a calendar year was tuition assistance top-up.

(Authority: 38 U.S.C. 3014(b), 3684(c))


* * * * *
    20. Section 21.4209 is amended by:
    a. In the introductory text of paragraph (a), removing 
``educational institutions'' and adding, in its place, ``an educational 
institution, including for purposes of this section an organization or 
entity offering a licensing or certification test,''.
    b. In paragraph (a)(1), removing ``Chapter 1606 of Title 10 U.S.C. 
or Chapters 30, 32, 34, 35, or 36 of Title 38 U.S.C.'' and adding, in 
its place, ``10 U.S.C. chapter 1606 or 38 U.S.C. chapter 30, 32, 34, 
35, or 36;''.
    c. In paragraph (a)(2), removing the period at the end of the 
paragraph and adding, in its place, ``; and'' and removing the 
authority citation following paragraph (a)(2).
    d. Adding paragraph (a)(3).
    e. In paragraph (b) introductory text, paragraph (c), and paragraph 
(d) introductory text, removing ``will'' each place that it appears and 
adding, in its place, ``must'', and removing ``school'' and adding, in 
its place, ``educational institution''.
    f. In paragraph (b)(1), removing the period and adding, in its 
place, a semicolon, and removing ``veterans'' and adding, in its place, 
``veterans, reservists,''.
    g. In paragraph (b)(2), removing the period and adding, in its 
place, a semicolon, and removing ``veterans'' and adding, in its place, 
``veterans, reservists,'', and removing ``school'' and adding, in its 
place, ``educational institution''.
    h. In paragraph (b)(3), removing ``veteran's'' and adding, in its 
place, ``veteran's, reservist's,'', and removing the period and adding 
a semicolon in its place.
    i. In paragraph (b)(4), adding a semicolon at the end of the 
paragraph.
    j. In paragraph (b)(5), removing the period and adding ``; and'' in 
its place.
    k. Revising paragraph (b)(7).
    l. Revising paragraph (f).
    m. Adding an information collection approval parenthetical at the 
end of the section.
    The additions and revisions read as follows:


Sec.  21.4209  Examination of records.

    (a) * * *
    (3) The records of other individuals who took a licensing or 
certification test that VA believes are necessary to ascertain whether 
the veterans and eligible persons taking such test were reimbursed the 
correct amount.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3689, 3690)


    (b) * * *
    (7) Records necessary to demonstrate compliance with the 
requirements of Sec.  21.4268.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3689, 3690)


* * * * *
    (f) Retention of records. (1) Except as provided in paragraph 
(f)(2) of this section, an educational institution must keep records 
and accounts, including those pertaining to students not receiving 
benefits from VA, as described in this section, pertaining to each 
period of enrollment of a veteran, reservist, or eligible person. If 
those records are not available electronically, the paper records must 
be kept intact and in good condition at the educational institution for 
at least 3 years following the end of each enrollment period. If the 
records are stored electronically, the paper records may be stored at 
another site. The electronic records must be easily accessible at the 
educational institution for at least 3 years following the end of each 
enrollment period.
    (2) An organization or entity offering a licensing or certification 
test must keep records and accounts intact and in good condition that 
are needed to show that veterans and eligible persons have been paid 
correctly for taking licensing or certification tests. The organization 
or entity must keep those records, at a site mutually agreed on, for at 
least 3 years following the date of the test.
    (3) An educational institution will not be required under this 
section to retain records for longer than 3 years unless the 
educational institution receives from the Government Accountability 
Office or VA not later than 30 days before the end of the 3-year period 
a written request for longer retention.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3689, 3690)


(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
XXXX.)

    21. Section 21.4210 is amended by:
    a. Revising the section heading, the heading of paragraph (a), and 
paragraphs (a)(1) and (a)(2)(ii).
    b. In paragraph (b), designating the introductory text following 
the paragraph heading as paragraph (b)(1) introductory text; 
redesignating paragraphs (b)(1) and (b)(2) as paragraphs (b)(1)(i) and 
(b)(1)(ii), respectively; and adding a new paragraph (b)(2) immediately 
after the authority citation following paragraph (b)(1)(ii).
    c. Revising the authority citation following paragraph (c) and 
revising paragraph (d)(1) introductory text.
    d. Redesignating paragraphs (d)(1)(i), (d)(1)(ii), (d)(2), and 
(d)(3) as paragraphs (d)(2)(i), (d)(2)(ii), (d)(3), and (d)(4), 
respectively.
    e. Adding new paragraphs (d)(1)(i) and (d)(1)(ii); paragraph 
(d)(1)(iii); and a new paragraph (d)(2) introductory text.
    f. In newly redesignated paragraph (d)(2)(i), removing ``and 
21.4264'' and adding, in its place, ``21.4264, and 21.4268''.
    g. Revising the authority citation following paragraph (d).
    h. In paragraphs (e)(1) and (f), removing ``facility'' each place 
that it appears and adding, in its place, ``Regional Processing 
Office''.
    i. Immediately after the authority citation following paragraph 
(e)(2), adding paragraph (e)(3).
    j. Revising paragraph (g).
    k. In paragraph (h)(1), removing ``course or courses'' and adding, 
in its place, ``course(s) or test(s)'', and removing ``facility'' and 
adding, in its place, ``Regional Processing Office''.
    l. Adding paragraph (i).
    The revisions and additions read as follows:


Sec.  21.4210  Suspension, discontinuance, and denial of educational 
assistance payments, and disapproval of enrollments or reenrollments 
for pursuit of approved courses.

    (a) Overview; explanation of terms used in Sec. Sec.  21.4210 
through 21.4216. (1) VA may pay educational assistance to a reservist 
under 10 U.S.C. chapter 1606 for the reservist's pursuit of a course 
approved in accordance with the

[[Page 9208]]

provisions of 38 U.S.C. chapter 36. VA may pay educational assistance 
under 38 U.S.C. chapter 32 or 35 to a veteran or eligible person for 
the individual's pursuit of a course approved in accordance with the 
provisions of 38 U.S.C. chapter 36 or if the individual has taken a 
licensing or certification test approved in accordance with the 
provisions of 38 U.S.C. chapter 36. VA may pay educational assistance 
under 38 U.S.C. chapter 30 to a veteran or servicemember for the 
individual's pursuit of a course approved in accordance with the 
provisions of 38 U.S.C. chapter 36; if the individual has taken a 
licensing or certification test approved in accordance with the 
provisions of 38 U.S.C. chapter 36; or if the individual is entitled to 
be paid benefits (tuition assistance top-up) to meet all or a portion 
of an educational institution's charges for education or training that 
the military department concerned has not covered under tuition 
assistance. Except for tuition assistance top-up, where courses do not 
need to be approved, a State approving agency designated by VA, or in 
some instances VA, approves the course or test for payment purposes. 
Notwithstanding such approval, VA, as provided in paragraphs (b), (c), 
and (d) of this section, may suspend, discontinue, or deny payment of 
benefits to any or all otherwise eligible individuals for pursuit of a 
course or training approved under 38 U.S.C. chapter 36, and for taking 
a licensing or certification test approved under 38 U.S.C. chapter 36.
    (2) * * *
    (ii) The term ``educational institution'' includes a training 
establishment, or organization or entity offering a licensing or 
certification test; and
* * * * *
    (b) * * *
    (2) VA may deny payment of educational assistance to a specific 
individual for taking a licensing or certification test if, following 
an examination of the individual's case, VA has credible evidence 
affecting that individual that--
    (i) The test fails to meet any of the requirements of 38 U.S.C. 
3689; or
    (ii) The organization or entity offering the individual's test has 
violated any of the requirements of 38 U.S.C. 3689.

(Authority: 38 U.S.C. 3689)


    (c) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689, 
3690)


    (d) * * *
    (1) The Director of the VA Regional Processing Office of 
jurisdiction may:
    (i) Suspend payments of educational assistance to all veterans, 
servicemembers, reservists, or eligible persons already enrolled in a 
course;
    (ii) Disapprove all further enrollments or reenrollments of 
individuals seeking VA educational assistance for pursuit of the course 
(except for enrollments and reenrollments of servicemembers seeking to 
be paid benefits (tuition assistance top-up) to meet all or a portion 
of an educational institution's charges for education or training that 
the military department concerned has not covered under tuition 
assistance); and
    (iii) Suspend payments of educational assistance to all veterans, 
servicemembers, or eligible persons who may take a licensing or 
certification test after a date that the Director may determine.
    (2) Except as provided in paragraphs (d)(3) and (i) of this 
section, the decision to act as described in paragraph (d)(1) of this 
section must be based on evidence of a substantial pattern of veterans, 
servicemembers, reservists, or eligible persons enrolled in the course 
or taking the test receiving educational assistance to which they are 
not entitled because:
* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 512(a), 3034(a), 3241(a), 
3680A(d), 3684, 3685, 3689, 3690, 3696, 5301)


    (e) * * *
    (3) If VA receives a claim for educational assistance for the 
taking by an individual of a licensing or certification test, and the 
individual took the licensing or certification test during a period 
when payment for taking such test was suspended, the Director will 
inform the individual in writing of the fact of the suspension and the 
reasons why payments were suspended.

(Authority: 38 U.S.C. 3689, 3690)


* * * * *
    (g) Referral to the Committee on Educational Allowances. The 
Director of the VA Regional Processing Office of jurisdiction will 
refer the following matters to the Committee on Educational Allowances 
as provided in Sec.  21.4212:
    (1) A suspension under paragraph (d) of this section of payments of 
educational assistance to all veterans, servicemembers, reservists, or 
eligible persons already enrolled in a course;
    (2) A disapproval under paragraph (d) of this section of all 
further enrollments or reenrollments of individuals seeking VA 
educational assistance for pursuit of the course (except for 
enrollments and reenrollments of servicemembers seeking to be paid 
tuition assistance top-up benefits to meet all or a portion of an 
educational institution's charges for education or training that the 
military department concerned has not covered under tuition 
assistance); and
    (3) A suspension under paragraph (d) of this section of payments of 
educational assistance to all veterans, servicemembers, or eligible 
persons who may take a licensing or certification test after a date 
that the Director has determined.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689, 
3690)


* * * * *
    (i) This section does not apply to disapproval of courses based on 
conflicts of interests. VA will disapprove courses when required by 
Sec.  21.4005(d) without applying the provisions of paragraphs (a) 
through (h) of this section.

(Authority: 10 U.S.C. 16136(b), 38 U.S.C. 3034(a), 3241, 3683(b))


    22. Section 21.4211 is amended by:
    a. Redesignating paragraph (b)(2) and the authority citation 
following paragraph (b)(2) as paragraph (b)(3).
    b. Revising the section heading, paragraphs (a) and (b)(1), and the 
authority citations following paragraphs (b), (c), (d), and (e).
    c. Adding a new paragraph (b)(2).
    d. In paragraphs (d), (e)(1), and (e)(2)(iii), removing 
``facility'' each place that it appears and adding, in its place, 
``Regional Processing Office.''
    The revisions and addition read as follows:


Sec.  21.4211  Composition, jurisdiction, and duties of Committee on 
Educational Allowances.

    (a) Authority. (1) 38 U.S.C. 3690 authorizes VA to discontinue 
educational benefits to veterans, servicemembers, reservists, or 
eligible persons when VA finds that:
    (i) The program of education or course in which such individuals 
are enrolled fails to meet a requirement of 38 U.S.C. chapter 30, 32, 
34, 35, or 36, or 10 U.S.C. chapter 1606, or the regulations in this 
part; or
    (ii) An educational institution has violated any such statute or 
regulation, or fails to meet such a statutory or regulatory 
requirement.
    (2) This authority does not extend to enrollments and reenrollments 
of individuals seeking to be paid tuition assistance top-up benefits to 
meet all or a portion of an educational institution's charges for 
education or training that the military department concerned has not 
covered under tuition assistance.
    (3) 38 U.S.C. 3689 and 3690 further authorize VA to deny payment to 
servicemembers or veterans for

[[Page 9209]]

licensing or certification tests when VA finds that either the test or 
the organization or entity offering the test fails to meet a 
requirement of 38 U.S.C. 3689 or the applicable regulations of this 
part.
    (4) Sections 21.4210 through 21.4216 implement the authority 
discussed in paragraphs (a)(1) and (a)(3) of this section.
    (5) Each VA Regional Processing Office shall have a Committee on 
Educational Allowances. For the purposes of this section, the Manila 
Regional Office is considered the VA Regional Processing Office of 
jurisdiction for educational institutions located in the Philippines. 
The Committee's findings of fact and recommendations will be provided 
to the Director of the VA Regional Processing Office.
    (6) The Secretary of Veterans Affairs delegates to each Director of 
a VA Regional Processing Office the authority to suspend or discontinue 
payment of educational benefits, to disapprove enrollments or 
reenrollments, or to deny payment of benefits for tests.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 512(a); 3034(a), 3241(a), 
3689(d), 3690)


    (b) * * *
    (1) The Committee on Educational Allowances is established to 
assist the Director of the VA Regional Processing Office of 
jurisdiction in deciding in a specific case whether--
    (i) Educational assistance should be discontinued to all 
individuals enrolled in any course or courses an educational 
institution offers; and
    (ii) If appropriate, whether approval of all further enrollments or 
reenrollments in the course or courses an educational institution 
offers should be denied to veterans, servicemembers, reservists, or 
other eligible persons pursuing those courses under programs VA 
administers; or
    (iii) Payment should be denied to all servicemembers and veterans 
for taking a specific licensing or certification test.
    (2) A Director's decision described in paragraph (b)(1) of this 
section must be based on a finding that the educational institution is 
not meeting, or has violated, a requirement of 38 U.S.C. chapter 30, 
32, 34, 35, or 36, or 10 U.S.C. chapter 1606, or the regulations in 
this part.
* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (c) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (d) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (e) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    23. Section 21.4212 is amended by:
    a. In paragraph (a)(5), removing ``discontinued and approval of new 
enrollments or reenrollments denied.'' and adding, in its place, 
``discontinued; approval of new enrollments should be denied; and/or 
payment to individuals for licensing or certification tests should be 
denied, as appropriate.''.
    b. Revising the authority citation.
    c. In paragraphs (a) introductory text and (b)(1)(iii), removing 
``facility'' each place that it appears and adding, in its place, 
``Regional Processing Office''.
    The revision reads as follows:


Sec.  21.4212  Referral to Committee on Educational Allowances.

* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    24. In Sec.  21.4213, the authority citation is revised to read as 
follows:


Sec.  21.4213  Notice of hearing by Committee on Educational 
Allowances.

* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    25. Section 21.4214 is amended in paragraphs (b), (e), (k), (o), 
and (p) by removing ``facility'' each place that it appears and adding, 
in its place, ``Regional Processing Office'', and by revising the 
authority citations for paragraphs (a) through (p) to read as follows:


Sec.  21.4214  Hearing rules and procedures for Committee on 
Educational Allowances.

    (a) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (b) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (c) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (d) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (e) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (f) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (g) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (h) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (i) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (j) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)

    (k) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (l) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (m) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (n) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (o) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (p) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    26. Section 21.4215 is amended in paragraphs (b)(1) introductory 
text, (c), (d), (e)(1), (e)(2) introductory text, and (e)(3) by 
removing ``facility'' each place that it appears and adding, in its 
place, ``Regional Processing Office'', and by revising the section 
heading, paragraph (a), and the authority citations for paragraphs (b), 
(c), (d), and (e) to read as follows:


Sec.  21.4215  Decision of Director of VA Regional Processing Office of 
jurisdiction.

    (a) Decision. The Director of the VA Regional Processing Office of 
jurisdiction will render a written decision on the issue or issues of 
discontinuance or denial that were the subject of the Committee on 
Educational Allowances proceedings.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (b) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (c) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (d) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    (e) * * *

[[Page 9210]]


(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    27. Section 21.4216 is amended in paragraph (c) by removing 
``facility'' and adding, in its place, ``Regional Processing Office'', 
and by revising the section heading, paragraph (a), and the authority 
citation at the end of paragraph (c) to read as follows:


Sec.  21.4216  Review of decision of Director of VA Regional Processing 
Office of jurisdiction.

    (a) Decision is subject to review by the Director, Education 
Service. At the request of the educational institution the Director, 
Education Service will review a decision of a Director of a VA Regional 
Processing Office of jurisdiction to discontinue payments; to 
disapprove new enrollments or reenrollments; or to deny payment of 
benefits for licensing or certification tests. This review will be 
based on the evidence of record when the Director of the VA Regional 
Processing Office of jurisdiction made that decision. It will not be de 
novo in nature and no hearing on the issue will be held. When reviewing 
a decision to deny payment for licensing or certification tests, the 
Director, Education Service may seek the advice of the Professional 
Certification and Licensure Advisory Committee established under 38 
U.S.C. 3689(e).

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
(e), 3690)

* * * * *
    (c) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3689(d), 
3690)


    28. Section 21.4234 is amended by:
    a. In paragraph (a)(1), removing ``educational professional'' and 
adding, in its place, ``educational, professional,''.
    b. In paragraph (a)(2) introductory text, removing the period and 
adding a colon in its place.
    c. In paragraph (a)(2)(i), removing the period and adding a 
semicolon in its place.
    d. In paragraph (a)(2)(ii), removing the comma at the end of the 
paragraph and adding a semicolon in its place.
    e. In paragraph (a)(2)(iii), removing ``program, or'' and adding, 
in its place, ``program;''.
    f. In paragraph (a)(2)(iv), removing the period and adding ``; 
or''.
    g. Adding paragraph (a)(2)(v), an authority citation following 
paragraph (e), and an information collection approval parenthetical at 
the end of the section.
    The additions read as follows:


Sec.  21.4234  Change of program.

    (a) * * *
    (2) * * *
    (v) An enrollment or reenrollment of a servicemember seeking to be 
paid tuition assistance top-up benefits to meet all or a portion of an 
educational institution's charges for education or training that the 
military department concerned has not covered under tuition assistance.

(Authority: 38 U.S.C. 3691)

* * * * *
    (e) * * *

(Authority: 38 U.S.C. 3691)

* * * * *
(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0074 and 2900-0099.)

    29. Section 21.4250 is amended by:
    a. Revising the section heading and paragraphs (a) and (b)(1).
    b. In paragraph (b)(2), removing ``course'' and adding, in its 
place, ``course or licensing or certification test''.
    c. Removing the authority citation following paragraph (c)(2)(ii).
    d. In paragraph (c)(2)(iv), removing ``36; and'' and adding, in its 
place, ``36;''.
    e. In paragraph (c)(2)(v), removing the period and adding ``; and'' 
in its place.
    f. Removing the authority citation at the end of paragraph 
(c)(2)(v).
    g. Immediately after paragraph (c)(2)(v), adding paragraph 
(c)(2)(vi).
    h. Revising the cross reference at the end of the section.
    i. Immediately following the cross reference at the end of the 
section, adding an information collection approval parenthetical.
    The revisions and addition read as follows:


Sec.  21.4250  Course and licensing and certification test approval; 
jurisdiction and notices.

    (a) General. The statements made in this paragraph are subject to 
exceptions found in paragraph (c) of this section.
    (1) If an educational institution offers a resident course in a 
State, only the State approving agency for the State where the course 
is being offered may approve the course for VA training. If the State 
approving agency chooses to approve a resident course (other than a 
flight course) not leading to a standard college degree, it must also 
approve the class schedules of that course.
    (2) If an educational institution with a main campus in a State 
offers a resident course not located in a State, only the State 
approving agency for the State where the educational institution's main 
campus is located may approve the course for VA training. If the State 
approving agency chooses to approve a resident course (other than a 
flight course) not leading to a standard college degree, it must also 
approve the class schedules of that course.
    (3) If an educational institution offers a course by independent 
study or by correspondence, only the State approving agency for the 
State where the educational institution's main campus is located may 
approve the course for VA training.
    (4) If a training establishment offers a program of apprenticeship 
or other on-job training, only the State approving agency for the State 
where the training will take place may approve the course for VA 
training.
    (5) Except as provided in paragraph (a)(6)(ii) of this section, if 
a State or political subdivision of a State offers a licensing test, 
only the State approving agency for the State where the license will be 
valid may approve the test for VA payment.
    (6)(i) If an organization or entity offers a licensing or 
certification test and applies for approval of that test, only the 
State approving agency for the State where the organization or entity 
has its headquarters may approve the test and the organization or 
entity offering the test for VA payment. This approval will be valid 
wherever the test is given.
    (ii) If the organization or entity offering a licensing or 
certification test does not apply for approval, and a State or 
political subdivision of a State requires that an individual take the 
test in order to obtain a license, the State approving agency for the 
State where the license will be valid may approve the test for VA 
payment. This approval will be valid for the purpose of VA payment only 
if the veteran takes the test in the State or political subdivision of 
the State where the license is valid.
    (7) A course approved under 38 U.S.C. chapter 36 will be deemed to 
be approved for purposes of 38 U.S.C. chapter 35.
    (8) Any course that was approved under 38 U.S.C. chapter 33 (as in 
effect before February 1, 1965), or under 38 U.S.C. chapter 35 before 
March 3, 1966, and was not or is not disapproved for failure to meet 
any of the requirements of the applicable chapters, will be deemed to 
be approved for purposes of 38 U.S.C. chapter 36.
    (9) VA may make tuition assistance top-up payments of educational 
assistance to an individual to meet all or a portion of an educational 
institution's charges for education or training that the military 
department concerned has not covered under tuition

[[Page 9211]]

assistance, even though a State approving agency has not approved the 
course in which the individual was enrolled.

(Authority: 38 U.S.C. 3014(b), 3670, 3672(a))


    (b) * * *
    (1) Notice of approval. (i) Each State approving agency must 
provide to VA:
    (A) A list of schools specifying which courses it has approved;
    (B) A list of licensing and certification tests and organizations 
and entities offering these tests that it has approved; and
    (C) Any other information that it and VA may determine to be 
necessary.
    (ii) The lists and information must be provided on paper or 
electronically as VA may require.
* * * * *
    (c) * * *
    (2) * * *
    (vi) Any licensing or certification test and any organization or 
entity offering such a test if--
    (A) The organization or entity is an agency of the Federal 
government;
    (B) The headquarters of the organization or entity offering the 
test is not located in a State; or
    (C) The State approving agency that would, under paragraph (a)(5) 
or (a)(6) of this section, have approval jurisdiction for the test has 
declined to perform the approval function for licensing or 
certification tests and the organizations or entities offering these 
tests.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3476, 3523, 3672, 
3673, 3689)


    Cross Reference: Designation. See Sec.  21.4150.

(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
XXXX.)

    30. Section 21.4251 is amended by adding introductory text to read 
as follows:


Sec.  21.4251  Minimum period of operation requirement for educational 
institutions.

    The provisions of this section do not apply to licensing or 
certification tests or to the organizations or entities offering those 
tests. For information on the minimum period of operation requirement 
that applies to licensing or certification tests, see Sec.  21.4268.
* * * * *
    31. Section 21.4252 is amended by:
    a. Revising the section heading.
    b. Revising the heading of paragraph (h) and adding introductory 
text.
    c. Revising paragraph (h)(1).
    d. Redesignating paragraph (h)(2) as paragraph (h)(3) and revising 
the introductory text.
    e. Adding new paragraph (h)(2).
    f. Revising the authority citation following paragraph (h)(3).
    g. Adding an information collection approval parenthetical at the 
end of the section.
    The revisions and additions read as follows:


Sec.  21.4252  Courses precluded; erroneous, deceptive, or misleading 
practices.

* * * * *
    (h) Erroneous, deceptive, or misleading practices. For the purposes 
of this paragraph, ``educational institution'' includes an organization 
or entity offering licensing or certification tests.
    (1) If an educational institution uses advertising, sales, 
enrollment practices, or candidate handbooks that are erroneous, 
deceptive, or misleading by actual statement, omission, or intimation, 
VA will not approve:
    (i) An enrollment in any course such an educational institution 
offers; and
    (ii) Payment of educational assistance as reimbursement to a 
veteran or eligible person for taking a licensing or certification test 
that the educational institution offers.
    (2) VA will use the services and facilities of the Federal Trade 
Commission, where appropriate, under an agreement:
    (i) To carry out investigations; and
    (ii) To decide whether an educational institution uses advertising, 
sales, or enrollment practices, or candidate handbooks, described in 
paragraph (h)(1) of this section.
    (3) Any educational institution offering courses approved for the 
enrollment of veterans, reservists, and/or eligible persons, or 
offering licensing or certification tests approved for payment of 
educational assistance as reimbursement to veterans or eligible persons 
who take the tests, must maintain a complete record of all advertising, 
sales materials, enrollment materials, or candidate handbooks (and 
copies of each) that the educational institution or its agents have 
used during the preceding 12-month period. The State approving agency 
and VA may inspect this record. The materials in this record shall 
include but are not limited to:
* * * * *

(Authority: 38 U.S.C. 3689, 3696)

* * * * *
(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0073, 2900-0156, and 2900-XXXX.)

    32. Section 21.4258 is amended by:
    a. Revising paragraphs (a) and (b).
    b. Removing paragraph (c).
    c. Redesignating paragraph (d) as new paragraph (c).
    d. In newly redesignated paragraph (c)(2)(ii), removing ``paragraph 
(d)(1)'' and adding, in its place, ``paragraph (c)(1)''.
    e. In newly redesignated paragraph (c)(3), removing ``paragraph 
(d)(2)'' and adding, in its place, ``paragraph (c)(2)''.
    f. At the end of the section, revising the authority citation and 
adding an information collection approval parenthetical.
    The revisions and addition read as follows:


Sec.  21.4258  Notice of approval.

    (a) General; letter of approval and other notice of approval 
requirements. The State approving agency, upon determining that an 
educational institution, training establishment, or organization or 
entity offering a licensing or certification test has complied with all 
the requirements for approval will--
    (1) Notify by letter, as described in paragraph (b) of this 
section, each such educational institution, training establishment, or 
organization or entity offering a licensing or certification test; and
    (2) Furnish VA an official copy of the letter, any attachments, and 
any subsequent amendments. In addition, the State approving agency will 
furnish VA a copy of each such--
    (i) Educational institution's approved catalog or bulletin;
    (ii) Training establishment's application requesting approval; or
    (iii) Organization's or entity's candidate handbook.
    (b) Contents of letter of approval. The letter of approval will 
include the following:
    (1) For an educational institution: (i) Date of the letter and 
effective date of approval of courses;
    (ii) Proper address and name of the educational institution;
    (iii) Authority for approval and conditions of approval, referring 
specifically to the approved catalog or bulletin;
    (iv) Name of each course approved, except that a State approving 
agency, in lieu of listing the name of each course approved at an 
institution of higher learning, may identify approved courses by 
reference to page numbers in the school catalog or bulletin;
    (v) Where applicable, enrollment limitations, such as maximum 
number of students authorized and student-teacher ratio;
    (vi) Signature of responsible official of State approving agency; 
and

[[Page 9212]]

    (vii) Such other fair and reasonable provisions as are considered 
necessary by the appropriate State approving agency.
    (2) For a training establishment: (i) Date of the letter and 
effective date of approval of the apprentice or other on-the-job 
training;
    (ii) Proper address and name of the training establishment;
    (iii) Authority for approval and conditions of approval;
    (iv) Name of the approved program of apprenticeship or other on-
the-job training;
    (v) Where applicable, enrollment limitations, such as maximum 
number of trainees authorized;
    (vi) Such other fair and reasonable provisions as are considered 
necessary by the appropriate State approving agency; and
    (vii) Signature of responsible official of State approving agency.
    (3) For an organization or entity offering a licensing or 
certification test:
    (i) Date of the letter and effective date of approval of test(s);
    (ii) Proper name of the organization or entity offering the 
licensing or certification test(s);
    (iii) Name of each test approved indicating whether it is a 
licensing test or certification test;
    (iv) Where applicable, enrollment limitations such as maximum 
numbers authorized and test taker-test proctor ratio; and
    (v) Signature of responsible official of State approving agency.

(Authority: 38 U.S.C. 3672, 3678, 3689)

* * * * *
(20 U.S.C. 1681 et seq.; 29 U.S.C. 794; 38 U.S.C. 501, 3671; 42 
U.S.C. 2000d, 6101 et seq.; 38 CFR parts 18, 18a, 18b)

(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0051.)

    33. Section 21.4259 is amended by:
    a. In paragraph (a) introductory text, removing ``course'' and 
adding, in its place, ``course or licensing or certification test''.
    b. In paragraph (a)(1), removing ``approval of the course for new 
enrollments'' and adding, in its place, ``approval of a course for new 
enrollments, or approval of a licensing or certification test,''; and 
removing ``course fails'' and adding, in its place, ``course or 
licensing or certification test fails''.
    c. In paragraph (a)(2), removing ``course'' and adding, in its 
place, ``course or licensing or certification test''.
    d. In paragraph (a)(3), removing ``school'' and adding, in its 
place, ``educational institution''.
    e. Revising paragraph (b).
    f. In paragraph (c), removing ``courses'' and adding, in its place, 
``courses or licensing or certification tests''.
    g. In paragraph (d), removing ``Chapter 31.'' and adding, in its 
place, ``38 U.S.C. chapter 31.''.
    h. At the end of the section, revising the authority citation and 
adding an information collection approval parenthetical.
    The revisions and additions read as follows:


Sec.  21.4259  Suspension or disapproval.

* * * * *
    (b) Each State approving agency will immediately notify VA of each 
course, or licensing or certification test, that it has suspended or 
disapproved.
* * * * *

(Authority: 38 U.S.C. 3679, 3689)


(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0051.)

    34. Section 21.4266 is amended by revising the cross reference at 
the end of the section to read as follows:


Sec.  21.4266  Courses offered at subsidiary branches or extensions.

* * * * *
Cross Reference: Minimum period of operation requirement for 
educational institutions. See Sec.  21.4251.

    35. Section 21.4268 is added to read as follows:


Sec.  21.4268  Approval of licensing and certification tests.

    (a) Authority to approve licensing and certification tests. (1) 
Except for approval of the licensing and certification tests and the 
organizations or entities offering these tests that, as provided in 
Sec.  21.4250(c)(2), are VA's responsibility, the Secretary of Veterans 
Affairs delegates to each State approving agency the authority, within 
the respective State approving agency's jurisdiction provided in Sec.  
21.4250(a), to approve licensing and certification tests and to approve 
the organizations or entities offering licensing and certification 
tests.
    (2) The Secretary of Veterans Affairs delegates to the Under 
Secretary for Benefits, and to personnel the Under Secretary for 
Benefits may designate within the Education Service of the Veterans 
Benefits Administration, the authority to approve the licensing and 
certification tests and the organizations or entities offering these 
tests that, as provided in Sec.  21.4250(c)(2)(vi), are VA's 
responsibility.

(Authority: 38 U.S.C. 512(a), 3689(a)(2))


    (b) Approval of tests. (1) If an organization or entity wants a 
licensing or certification test that it offers to be approved for 
payment of educational assistance, it must apply for approval to the 
State approving agency having jurisdiction over the locality where the 
organization or entity has its headquarters. The application must be in 
the form the State approving agency requires.
    (2) In order to be approved for payment of educational assistance 
to veterans and eligible persons, a licensing or certification test 
must meet the requirements of paragraph (b) of this section, and the 
organization or entity offering the test must meet the requirements of 
paragraph (c) of this section and, if appropriate, the requirements of 
paragraph (d) of this section.
    (i) The State approving agency may approve a licensing or 
certification test only if--
    (A) The test is required under Federal, State, or local law or 
regulation for an individual to enter into, maintain, or advance in 
employment in a predetermined and identified vocation or profession; or
    (B) The State approving agency decides that the test is generally 
accepted, in accordance with relevant government, business, or industry 
standards, employment policies, or hiring practices, as attesting to a 
level of knowledge or skill required to qualify to enter into, 
maintain, or advance in employment in a predetermined and identified 
vocation or profession.
    (ii) If a State or political subdivision of a State offers a 
licensing or certification test, the State approving agency will deem 
the test to have met the requirements of paragraph (b) of this section.
    (3) In considering whether the test is generally accepted, a State 
approving agency may consider the following:
    (i) The nature and number of the entities that recognize the 
certificate awarded to candidates who pass the test;
    (ii) The degree to which employers in the relevant industry accept 
the certification test;
    (iii) Whether major employers in an industry require that their 
employees obtain the certificate awarded to candidates who pass the 
test;
    (iv) The percentage of people employed in the vocation or 
profession

[[Page 9213]]

who have taken the test and obtained the certificate; or
    (v) Any other reasonable criterion that the State approving agency 
believes will clarify whether the test is generally accepted.
    (4) Generally, if a State approving agency approves a certification 
test, VA will consider that the test is approved for any veteran or 
eligible person even if he or she takes the test at a location outside 
the State where the organization or entity offering the test has its 
headquarters. However, a certification test approval is valid only in 
the State where the State approving agency has jurisdiction if--
    (i) A State licensing agency recognizes the certification test as 
meeting a requirement for a license and has sought approval for that 
test; and
    (ii) The State approving agency for the State where the licensing 
agency is located approves that test.

(Authority: 38 U.S.C. 3689)


    (c) Approval of organizations or entities offering licensing or 
certification tests. An organization or entity must meet the 
requirements of this paragraph and, if a nongovernmental organization, 
of paragraph (d) of this section, in order for the State approving 
agency to approve a licensing or certification test that the 
organization or entity offers for payment of educational assistance to 
veterans and eligible persons who take the test. The organization or 
entity must--
    (1) Maintain appropriate records with respect to all candidates who 
take the test for a period of not less than three years from the date 
the organization or entity administers the test to the candidates;
    (2) Promptly issue notice of the results of the test to the 
candidate for the license or certificate;
    (3) Have a process to review complaints submitted against the 
organization or entity with respect to the test or the process for 
obtaining a license or certificate required for a vocation or 
profession;
    (4) Give to the State approving agency the following information:
    (i) A description of the licensing or certification test that the 
organization or entity offers, including the purpose of the test, the 
vocational, professional, governmental, and other entities that 
recognize the test, and the license or certificate issued upon passing 
the test;
    (ii) The requirements to take the test, including the amount of the 
fee charged for the test and any prerequisite education, training, 
skills, or other certification; and
    (iii) The period for which the license or certificate is awarded is 
valid, and the requirements for maintaining or renewing the license or 
certificate; and
    (5) Agree to give the following information to VA at VA's request:
    (i) The amount of the fee a candidate pays to take a test;
    (ii) The results of any test a candidate takes; and
    (iii) Personal identifying information of any candidate who applies 
for reimbursement from VA for a test.

(Authority: 38 U.S.C. 3689(c))


    (d) Approval of nongovernmental organizations or entities offering 
certification tests. (1) In addition to complying with the requirements 
of paragraph (c) of this section, a nongovernmental organization or 
entity must meet the requirements of paragraph (d) of this section 
before a certification test it offers can be approved for payment of 
educational assistance to veterans and eligible persons who take the 
test. Except as provided in paragraphs (d)(3) and (d)(4) of this 
section, the organization or entity--
    (i) Certifies to the State approving agency that the licensing or 
certification test offered by the organization or entity is generally 
accepted, in accordance with relevant government, business, or industry 
standards, employment policies, or hiring practices, as attesting to a 
level of knowledge or skill required to qualify to enter into, 
maintain, or advance in employment in a predetermined and identified 
vocation or profession;
    (ii) Is licensed, chartered, or incorporated in a State and has 
offered the test for a minimum of two years before the date on which 
the organization or entity first submits to the State approving agency 
an application for approval under this section;
    (iii) Employs, or consults with, individuals with expertise or 
substantial experience with respect to all areas of knowledge or skill 
that are measured by the test and that are required for the license or 
certificate issued; and
    (iv) Has no direct financial interest in--
    (A) The outcome of the test; or
    (B) An organization that provides the education or training of 
candidates for licenses or certificates required for a vocation or 
profession.
    (2) At the request of the State approving agency, the organization 
or entity seeking approval for a licensing or certification test must 
give such information to the State approving agency as the State 
approving agency decides is necessary to perform an assessment of--
    (i) The test the organization or entity conducts as compared to the 
level of knowledge or skills that a license or certificate attests; and
    (ii) The applicability of the test over such periods of time as the 
State approving agency decides is appropriate.
    (3) The provisions of paragraph (d)(1)(ii) of this section will not 
prevent the approval of a test if the organization or entity has 
offered a reasonably related test for at least two years.
    (4) The provisions of paragraph (d)(1)(iv) of this section will not 
prevent the approval of a test if the organization or entity--
    (i) Offers a sample test or preparatory materials to a candidate 
for the test but does not otherwise provide preparatory education or 
training to the candidate; or
    (ii) Has a financial interest in an organization that provides 
preparatory education or training of a candidate for a test, but that 
test is advantageous in but not required for practicing a vocation or 
profession.

(Authority: 38 U.S.C. 3689(c))


    (e) Notice of approval and withdrawal of approval. The State 
approving agency must provide notice of an approval of a test as 
required in Sec.  21.4250(b). If the State approving agency wishes to 
withdraw approval of a test, it must follow the provisions of Sec.  
21.4259.

(Authority: 38 U.S.C. 3689(d))


    (f) A decision to disapprove a test or an organization or entity 
offering a test may be reviewed. (1) If an organization or entity 
offering a test disagrees with a State approving agency's decision to 
disapprove a test or to disapprove the organization or entity offering 
the test, it may seek a review of the decision from the Director, 
Education Service. If the Director, Education Service has acted as the 
State approving agency, the organization or entity may seek a review of 
the decision from the Under Secretary for Benefits.
    (2) The organization or entity must make its request for a review 
in writing to the State approving agency. The State approving agency 
must receive the request within 90 days of the date of the notice to 
the organization or entity that the test or the organization or entity 
is disapproved.
    (3) The review will be based on the evidence of record at the time 
the State approving agency made its initial decision. It will not be de 
novo in character.
    (4) The Director, Education Service or the Under Secretary for 
Benefits may seek the advice of the Professional

[[Page 9214]]

Certification and Licensure Advisory Committee, established under 38 
U.S.C. 3689(e), as to whether the State approving agency's decision 
should be reversed.
    (5) The decision of the Director, Education Service or the Under 
Secretary for Benefits is the final administrative decision. It will 
not be subject to further administrative review.

(Authority: 38 U.S.C. 3689)



(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
XXXX.)


Sec.  21.4272  [Amended]

    36. In Sec.  21.4272, paragraph (a)(5)(iii) is amended by removing 
``Sec.  21.4252(1), (2) or (3).'' and adding, in its place, ``Sec.  
21.4252(l)(1), (2), or (3).''.

Subpart G--Post-Vietnam Era Veterans' Educational Assistance Under 
38 U.S.C. Chapter 32

    37. The authority citation for part 21, subpart G is revised to 
read as follows:

    Authority: 38 U.S.C. 501(a), chs. 32, 36, and as noted in 
specific sections.

    38. Section 21.5021 is amended by:
    a. Revising the introductory text and paragraphs (k) and (p).
    b. In paragraph (q)(3), removing ``636; or'' and adding, in its 
place, ``636;''.
    c. In paragraph (q)(4), removing ``on-job training approved as 
provided in Sec. Sec.  21.4261 or 21.4262 of this part as 
appropriate.'' and adding, in its place, ``training on-the-job approved 
as provided in Sec.  21.4261 or Sec.  21.4262 as appropriate; or''.
    d. Adding paragraph (q)(5) immediately before the authority 
citation for paragraph (q).
    e. Revising the authority citation for paragraph (q).
    f. Adding paragraphs (z), (aa), and (bb).
    The revisions and additions read as follows:


Sec.  21.5021  Definitions.

    For the purposes of subpart G and payment of benefits under 38 
U.S.C. chapter 32, the following definitions apply (see also Sec. Sec.  
21.1029 and 21.4200):
* * * * *
    (k) Benefit payment. The term benefit payment means any educational 
assistance allowance paid under 38 U.S.C. chapter 32 to a veteran for 
pursuit of a program of education during a benefit period.

(Authority: 38 U.S.C. 3231, 3232, 3452(b), 3689)

* * * * *
    (p) Training establishment. The term training establishment means 
any establishment providing apprentice or other training on-the-job, 
including those under the supervision of a college, university, any 
State department of education, any State apprenticeship agency, any 
State board of vocational education, any joint apprenticeship 
committee, the Bureau of Apprenticeship and Training established in 
accordance with 29 U.S.C. chapter 4C, or any agency of the Federal 
government authorized to supervise such training.

(Authority: 38 U.S.C. 3202, 3452(e))


    (q) * * *
    (5) A licensing or certification test, the passing of which 
demonstrates an individual's possession of the knowledge or skill 
required to enter into, maintain, or advance in employment in a 
predetermined and identified vocation or profession, provided that VA 
or a State approving agency has approved the test and the licensing or 
credentialing organization or entity that offers the test as provided 
in 38 U.S.C. 3689.

(Authority: 38 U.S.C. 3202(2), 3452(b), 3689)


* * * * *
    (z) Certification test. The term certification test means a test an 
individual must pass in order to receive a certificate that provides an 
affirmation of an individual's qualifications in a specified 
occupation.

(Authority: 38 U.S.C. 3202, 3452(b), 3501(a)(5), 3689)


    (aa) Licensing test. The term licensing test means a test offered 
by a State, local, or Federal agency, the passing of which is a means, 
or part of a means, to obtain a license. That license must be required 
by law in order for the individual to practice an occupation in the 
political jurisdiction of the agency offering the test.

(Authority: 38 U.S.C. 3202, 3452(b), 3689)


    (bb) Organization or entity offering a licensing or certification 
test. (1) The term organization or entity offering a licensing or 
certification test means:
    (i) An organization or entity that causes a licensing test to be 
given and that will issue a license to an individual who passes the 
test;
    (ii) An organization or entity that causes a certification test to 
be given and that will issue a certificate to an individual who passes 
the test; or
    (iii) An organization or entity that administers a licensing or 
certification test for the organization or entity that will issue a 
license or certificate, respectively, to an individual who passes the 
test, provided that the administering organization or entity can 
provide all required information and certifications under Sec.  21.4268 
to the State approving agency and to VA.
    (2) This term does not include:
    (i) An organization or entity that develops and/or proctors a 
licensing or certification test, but does not issue the license or 
certificate;
    (ii) An organization or entity that administers a test but does not 
issue the license or certificate, if that administering organization or 
entity cannot provide all required information and certifications under 
Sec.  21.4268 to the State approving agency and to VA.

(Authority: 38 U.S.C. 3202, 3452(b), 3689)


    39. Section 21.5131 is revised to read as follows:


Sec.  21.5131  Educational assistance allowance.

    (a) General. Statements in this section concerning payments of 
educational assistance allowance assume that the veteran or 
servicemember:
    (1) Is eligible for educational assistance under 38 U.S.C. chapter 
32;
    (2) Has remaining entitlement; and
    (3) Has not passed the 10-year delimiting date and any applicable 
extension to that date.

(Authority: 38 U.S.C. 3241)


    (b) Payment of educational assistance allowance for pursuit of 
programs of education and other courses. (1) VA will pay educational 
assistance allowance at the rate specified in Sec.  21.5136 or Sec.  
21.5138 while the veteran or servicemember is pursuing:
    (i) An approved program of education;
    (ii) A refresher or deficiency course; or
    (iii) Special education or training which is necessary to enable 
the veteran or servicemember to pursue an approved program of 
education.
    (2) Except as provided in paragraph (c) of this section, VA will 
not pay educational assistance allowance for pursuit of any course 
unless the course is:
    (i) Part of the veteran's or servicemember's program of education;
    (ii) A refresher or deficiency course; or
    (iii) Special education or training which is necessary to enable 
the veteran or servicemember to pursue an approved program of 
education.
    (3) VA may withhold a payment until it receives verification or 
certification of the veteran's or servicemember's continued enrollment 
and adjusts accordingly the veteran's or servicemember's account.

(Authority: 38 U.S.C. 3241)


    (c) Payment for taking a licensing or certification test. VA will 
pay

[[Page 9215]]

educational assistance allowance to an eligible veteran or 
servicemember who takes an approved licensing or certification test and 
applies, in accordance with the provisions of Sec.  21.1030(b), for 
that assistance. VA will not pay educational assistance for a licensing 
or certification test that neither a State approving agency nor VA has 
approved.

(Authority: 38 U.S.C. 3689)


    40. Section 21.5133 is amended by revising the introductory text, 
paragraph (a) introductory text, and authority citation to read as 
follows:


Sec.  21.5133  Certifications and release of payments.

    A veteran or servicemember must be pursuing a program of education 
in order to receive payment of educational assistance allowance under 
38 U.S.C. chapter 32. To ensure that this is the case, the provisions 
of this section must be met when a veteran or servicemember is seeking 
such payment.
    (a) General. VA will pay educational assistance to a veteran or 
servicemember (other than one pursuing a program of apprenticeship, 
other on-job training, or a correspondence course; one seeking 
reimbursement for taking an approved licensing or certification test; 
or one who qualifies for an advance payment) only after:
* * * * *

(Authority: 38 U.S.C. 3680(g), 3689)

* * * * *
    41. Section 21.5137 is added to read as follows:


Sec.  21.5137  Benefit payments and charges against entitlement for 
taking an approved licensing or certification test.

    (a) Benefit payments. The amount of educational assistance 
allowance VA will pay to a veteran or servicemember for taking an 
approved licensing or certification test, if the veteran or 
servicemember is entitled to receive such benefit payments, will be the 
lowest of the following:
    (1) The fee the organization or entity offering the test charges 
for taking the test;
    (2) $2,000; or
    (3) The total remaining amount of the veteran's or servicemember's 
contributions to the fund and the contributions the Secretary of 
Defense has made to the fund on behalf of the veteran or servicemember.

(Authority: 38 U.S.C. 3222, 3231, 3232(c), 3452(b), 3689)


    (b) Charge against entitlement. For educational assistance 
allowance paid for taking an approved licensing or certification test, 
VA will make a charge against the veteran's or servicemember's 
entitlement by dividing the amount paid under paragraph (a) of this 
section by the monthly amount as calculated under Sec.  21.5138(c). The 
calculation will assume that the veteran or servicemember is a full-
time student.

(Authority: 38 U.S.C. 3232(c), 3452(b), 3689)


    42. Section 21.5138 is amended by:
    a. Revising the introductory text.
    b. Revising the introductory text of paragraph (a) and of 
paragraphs (a)(1) through (a)(5).
    c. Revising the introductory text of paragraph (b).
    d. In paragraph (c), removing ``The Department of Veterans 
Affairs'' and adding, in its place, ``Under this section, VA'' and 
removing ``the Department of Veterans Affairs'' and adding, in its 
place, ``VA''.
    The revisions read as follows:


Sec.  21.5138  Computation of benefit payments and monthly rates.

    Except as provided in Sec. Sec.  21.5136(b)(1) and 21.5137(a), for 
purposes of this subpart VA will compute benefit payments and monthly 
rates as provided in this section.

(Authority: 38 U.S.C. 3231, 3233, 3241, 3491, 3680, 3689)


    (a) Computation of entitlement factor. (1) For residence training, 
VA will compute an entitlement factor as follows:
* * * * *
    (2) For correspondence training, VA will compute an entitlement 
factor as follows:
* * * * *
    (3) For apprenticeship and other on-job training, VA will compute 
an entitlement factor as follows:
* * * * *
    (4) For cooperative training, VA will compute an entitlement factor 
as follows:
* * * * *
    (5) For flight training, VA will compute an entitlement factor as 
follows:
* * * * *
    (b) Computation of benefit payment. Under this section, VA will 
compute benefit payments as follows:
* * * * *


Sec.  21.5200  [Amended]

    43. Section 21.5200 is amended by:
    a. In paragraph (d), removing ``by schools''.
    b. In paragraph (j), adding a comma after the word 
``jurisdiction''.
    c. Removing the information collection approval parenthetical at 
the end of the section.
    44. Section 21.5230 is amended by:
    a. In paragraph (a) introductory text, removing ``under chapter 32, 
title 38 U.S.C., only if it--'' and adding, in its place, ``for a 
veteran or servicemember under 38 U.S.C. chapter 32, only if--''.
    b. In paragraph (a)(1), removing ``Meets'' and adding, in its 
place, ``The program meets'', and removing ``of this part''.
    c. Revising paragraphs (a)(2), (a)(3), and (a)(4).
    d. In paragraph (b), removing ``serviceperson'' both places that it 
appears and adding, in its place, ``servicemember''.
    The revisions read as follows:


Sec.  21.5230  Programs of education.

    (a) * * *
    (2) Except for a program consisting of a licensing or certification 
test, the program has an objective as described in Sec.  21.5021(r) or 
(s);
    (3) Any courses, subjects, or licensing or certification tests in 
the program are approved for VA training; and
    (4) Except for a program consisting of a licensing or certification 
test designed to help the veteran or servicemember maintain employment 
in a vocation or profession, the veteran or servicemember is not 
already qualified for the objective of the program.

(Authority: 38 U.S.C. 3202(2), 3689(b))

* * * * *
    45. Section 21.5250 is amended by:
    a. Revising paragraphs (a)(1), (a)(2), (a)(3), (a)(7), and (a)(14).
    b. Adding paragraph (a)(17) immediately before the authority 
citation for paragraph (a).
    The revisions and addition read as follows:


Sec.  21.5250  Courses.

    (a) * * *
    (1) Section 21.4250 (except paragraph (c)(1))--Course and licensing 
and certification test approval; jurisdiction and notices.
    (2) Section 21.4251--Minimum period of operation requirement for 
educational institutions.
    (3) Section 21.4252--Courses precluded; erroneous, deceptive, or 
misleading practices.
* * * * *
    (7) Section 21.4256--Correspondence programs and courses.
* * * * *
    (14) Section 21.4265--Practical training approved as institutional 
training or on-job training.
* * * * *

[[Page 9216]]

    (17) Section 21.4268--Approval of licensing and certification 
tests.
* * * * *
    46. Section 21.5294 is amended by:
    a. Revising paragraph (d)(3)(iv) and the authority citation 
following paragraph (d)(3).
    b. Removing paragraph (d)(4).
    The revisions read as follows:


Sec.  21.5294  Transfer of entitlement.

* * * * *
    (d) * * *
    (3) * * *
    (iv) Section 21.5131, and
* * * * *

(Authority: Sec. 903, Pub. L. 96-342, 94 Stat. 1115)

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

    47. The authority citation for part 21, subpart K is revised to 
read as follows:

    Authority: 38 U.S.C. 501(a), chs. 30, 36, and as noted in 
specific sections.

    48. Section 21.7020 is amended by:
    a. In the introductory text, removing ``apply. (See also additional 
definitions in Sec.  21.1029).'' and adding, in its place, ``apply:''.
    b. In paragraph (b)(15), removing ``provided'' and adding, in its 
place, ``provided in''.
    c. In paragraph (b)(23)(iii), removing the word ``and'' at the end 
of the paragraph.
    d. In paragraph (b)(23)(iv)(B), removing the period and adding ``; 
and'' in its place.
    e. Adding paragraph (b)(23)(v) immediately before the authority 
citation for paragraph (b)(23).
    f. Revising the authority citation for paragraph (b)(23).
    g. In paragraph (b)(25)(i)(F), removing the word ``or'', and in 
paragraph (b)(25)(i)(G), removing the period and adding ``, or'' in its 
place.
    h. Adding paragraph (b)(25)(i)(H).
    i. Revising the authority citation for paragraph (b)(25).
    j. Revising paragraph (b)(37).
    k. Adding paragraphs (b)(52), (b)(53), (b)(54), and (b)(55).
    The revisions and additions read as follows:


Sec.  21.7020  Definitions.

* * * * *
    (b) * * *
    (23) * * *
    (v) Includes a licensing or certification test, the passing of 
which demonstrates an individual's possession of the knowledge or skill 
required to enter into, maintain, or advance in employment in a 
predetermined and identified vocation or profession, provided that VA 
or a State approving agency has approved the test and the licensing or 
credentialing organization or entity that offers the test as provided 
in 38 U.S.C. 3689.

(Authority: 38 U.S.C. 3002(3), 3452(b), 3689)

* * * * *
    (25) * * *
    (i) * * *
    (H) A licensing or certification test taken on or after March 1, 
2001.
    (ii) * * *

(Authority: 38 U.S.C. 3002, 3034, 3452, 3680(g), 3689; Pub. L. 98-
525)

* * * * *
    (37) Training establishment. The term training establishment means 
any establishment providing apprentice or other training on-the-job, 
including those under the supervision of a college, university, any 
State department of education, any State apprenticeship agency, any 
State board of vocational education, any joint apprenticeship 
committee, the Bureau of Apprenticeship and Training established in 
accordance with 29 U.S.C. chapter 4C, or any agency of the Federal 
government authorized to supervise such training.

(Authority: 38 U.S.C. 3002, 3452)

* * * * *
    (52) Certification test. The term certification test means a test 
that an individual must pass in order to receive a certificate that 
provides an affirmation of an individual's qualifications in a 
specified occupation.

(Authority: 38 U.S.C. 3002(3), 3452(b), 3689)


    (53) Licensing test. The term licensing test means a test offered 
by a State, local, or Federal agency, the passing of which is a means, 
or part of a means, to obtain a license. That license must be required 
by law in order for the individual to practice an occupation in the 
political jurisdiction of the agency offering the test.

(Authority: 38 U.S.C. 3002(3), 3452(b), 3689)


    (54) Organization or entity offering a licensing or certification 
test. (i) The term organization or entity offering a licensing or 
certification test means:
    (A) An organization or entity that causes a licensing test to be 
given and that will issue a license to an individual who passes the 
test;
    (B) An organization or entity that causes a certification test to 
be given and that will issue a certificate to an individual who passes 
the test; or
    (C) An organization or entity that administers a certification test 
for the organization or entity that will issue a certificate to an 
individual who passes the test, provided that the administering 
organization or entity can provide all required information and 
certifications under Sec.  21.4268 to the State approving agency and to 
VA.
    (ii) This term does not include:
    (A) An organization or entity that develops and/or proctors a 
licensing or certification test, but does not issue the license or 
certificate; or
    (B) An organization or entity that administers a test but does not 
issue the license or certificate, if that administering organization or 
entity cannot provide all required information and certifications under 
Sec.  21.4268 to the State approving agency and to VA.

(Authority: 38 U.S.C. 3002(3), 3452(b), 3689)


    (55) Tuition assistance top-up. The term tuition assistance top-up 
means a payment of basic educational assistance to meet all or a 
portion of the charges of an educational institution for the education 
or training of a servicemember that are not met by the Secretary of the 
military department concerned under 10 U.S.C. 2007(a) or (c).

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

* * * * *


Sec.  21.7032  [Amended]

    49. Section 21.7032 is amended by:
    a. In paragraph (a), removing ``Sec.  21.1032.'' and adding, in its 
place, ``Sec.  21.1033.''.
    b. In paragraph (b)(2), removing ``Sec.  21.7131(k).'' and adding, 
in its place, ``Sec.  21.7131(l).''.


Sec.  21.7051  [Amended]

    50. In Sec.  21.7051, paragraph (a)(1) is amended by removing 
``Sec.  21.1032(c) of this part.'' and adding, in its place, ``Sec.  
21.1033(c).''.
    51. Section 21.7075 is added to read as follows:


Sec.  21.7075  Entitlement to tuition assistance top-up.

    An individual who is entitled to educational assistance under 38 
U.S.C. chapter 30 is also entitled to 36 months of tuition assistance 
top-up. This entitlement is parallel to, and does not replace, the 
entitlement to educational assistance available under Sec.  21.7072. If 
the individual receives tuition assistance top-up, VA will make a 
charge against both the entitlement under Sec.  21.7072 and the 
entitlement under this section. The charge will be as described in 
Sec.  21.7076(b)(11).

(Authority: 38 U.S.C. 3013, 3014(b), 3032)


    52. Section 21.7076 is amended by:
    a. In paragraph (a)(2) and the introductory text of paragraph 
(a)(3),

[[Page 9217]]

removing ``service member'' and adding, in its place, 
``servicemember''.
    b. In paragraph (a)(3)(iii), removing the word ``or'' at the end of 
the paragraph.
    c. In paragraph (a)(3)(iv), removing the period and adding a 
semicolon in its place.
    d. Adding paragraphs (a)(3)(v) and (a)(3)(vi).
    e. In paragraph (a)(4)(i), removing ``service members'' and adding, 
in its place, ``servicemembers''.
    f. Revising the authority citation following paragraph (a).
    g. Revising paragraph (b)(1) introductory text and the authority 
citations following paragraphs (b)(2)(ii) and (b)(6)(ii).
    h. Adding authority citations following paragraphs (b)(3)(iii), 
(b)(4), and (b)(5)(ii).
    i. Adding paragraphs (b)(10) and (b)(11).
    The revisions and additions read as follows:


Sec.  21.7076  Entitlement charges.

    (a) * * *
    (3) * * *
    (v) Is receiving educational assistance for taking an approved 
licensing or certification test; or
    (vi) Is receiving tuition assistance top-up.
* * * * *

(Authority: 38 U.S.C. 3013, 3014(b), 3014A, 3689)


    (b) * * *
    (1) Except for those pursuing correspondence training, flight 
training, apprenticeship or other on-job training; those receiving 
tuition assistance top-up; those receiving educational assistance for 
taking an approved licensing or certification test; those receiving 
tutorial assistance; and those receiving an accelerated payment, VA 
will make a charge against entitlement:
* * * * *
    (2) * * *
    (ii) * * *

(Authority: 38 U.S.C. 3013)


    (3) * * *
    (iii) * * *

(Authority: 38 U.S.C. 3032(c))


    (4) * * *

(Authority: 38 U.S.C. 3015(e), 3032(c))


    (5) * * *
    (ii) * * *

(Authority: 38 U.S.C. 3032(d))


    (6) * * *
    (ii) * * *

(Authority: 38 U.S.C. 3032(c), 3032(d))

* * * * *
    (10) When a servicemember receives tuition assistance top-up, VA 
will make a charge against his or her entitlement as established under 
Sec.  21.7072 equal to the number of months and days determined by 
dividing the total amount paid by an amount equal to the 
servicemember's monthly rate of basic educational assistance as 
calculated under Sec.  21.7136. VA will make a charge against his or 
her tuition assistance top-up entitlement as established under Sec.  
21.7075 by subtracting from that entitlement the total number of months 
and days in the term, quarter, or semester for which the servicemember 
received tuition assistance.

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

    (11) When a veteran or servicemember receives educational 
assistance for taking an approved licensing or certification test, VA 
will make a charge against his or her entitlement equal to the number 
of months and days determined by dividing the total amount paid by an 
amount equal to the servicemember's monthly rate of basic educational 
assistance as calculated under Sec.  21.7136, excluding any additional 
``kicker'' that may be paid under Sec.  21.7136(g).

(Authority: 38 U.S.C. 3032(f)(2))

* * * * *
    53. Section 21.7110 is revised to read as follows:


Sec.  21.7110  Selection of a program of education.

    (a) Payments of educational assistance are usually based on pursuit 
of a program of education. In order to receive educational assistance 
under 38 U.S.C. chapter 30, a veteran or servicemember must--
    (1) Be pursuing an approved program of education;
    (2) Be pursuing refresher or deficiency courses;
    (3) Be pursuing other preparatory or special education or training 
courses necessary to enable the veteran or servicemember to pursue an 
approved program of education;
    (4) Have taken an approved licensing or certification test, for 
which he or she is requesting reimbursement; or
    (5) Be an individual who has taken a course for which the 
individual received tuition assistance provided under a program 
administered by the Secretary of a military department under 10 U.S.C. 
2007(a) or (c), for which the individual is requesting tuition 
assistance top-up.

(Authority: 38 U.S.C. 3014, 3023, 3034, 3689)


    (b) Approval of a program of education. VA will approve a program 
of education under 38 U.S.C. chapter 30 that a veteran or servicemember 
selects if:
    (1) It meets the definition of a program of education found in 
Sec.  21.7020(b)(23);
    (2) Except for a program consisting of a licensing or certification 
test, has an objective as described in Sec.  21.7020(b)(13) or (22);
    (3) The courses, subjects, or licensing or certification tests in 
the program are approved for VA training; and
    (4) Except for a program consisting of a licensing or certification 
test designed to help the veteran or servicemember maintain employment 
in a vocation or profession, the veteran or servicemember is not 
already qualified for the objective of the program.

(Authority: 38 U.S.C. 3002(3), 3034, 3471, 3689)


    54. Section 21.7122 is amended by:
    a. Revising paragraphs (a), (b), and (c), and the authority 
citation for paragraph (e).
    b. In paragraph (e)(7), removing the word ``or''.
    c. In paragraph (e)(8), removing the period and adding ``; or'' in 
its place.
    d. Adding paragraph (e)(9).
    The revisions and addition read as follows:


Sec.  21.7122  Courses precluded.

    (a) Unapproved courses. The provisions of this section which refer 
to a State approving agency will be deemed to refer to VA with respect 
to a State when that State does not have and fails or declines to 
create or designate a State approving agency; or fails to enter into an 
agreement as provided in Sec.  21.4153 (see Sec.  21.4150(c)). Except 
for payment of tuition assistance top-up, VA will not pay educational 
assistance for:
    (1) An enrollment in any course that a State approving agency has 
not approved;
    (2) A new enrollment in a course while a State approving agency has 
suspended the course for new enrollments;
    (3) Any period within an enrollment in a course if the period 
occurs after the date a State approving agency disapproves the course; 
or
    (4) Taking a licensing or certification test after the date a State 
approving agency disapproves the test. See Sec.  21.7220.

(Authority: 38 U.S.C. 3014(b), 3034, 3672)


    (b) Courses outside a program of education. VA will not pay 
educational assistance for an enrollment in any course that is not part 
of a program of

[[Page 9218]]

education unless the veteran or servicemember is enrolled in:
    (1) A refresher course (including a course which will permit the 
veteran or servicemember to update knowledge and skills or be 
instructed in the technological advances which have occurred in the 
veteran's or servicemember's field of employment);
    (2) A deficiency course;
    (3) A preparatory, special education, or training course necessary 
to enable the veteran or servicemember to pursue an approved program of 
education; or
    (4) A course for which the veteran or servicemember is seeking 
tuition assistance top-up.

(Authority: 38 U.S.C. 3002(3), 3014(b), 3034, 3452(b))


    (c) Erroneous, deceptive, misleading practices. (1) VA will not pay 
educational assistance for:
    (i) An enrollment in any course offered by an educational 
institution that uses advertising, sales, or enrollment practices that 
are erroneous, deceptive, or misleading by actual statement, omission, 
or intimation.
    (ii) Taking a licensing or certification test if the organization 
or entity offering the test uses advertising or sales practices, or 
candidate handbooks, that are erroneous, deceptive, or misleading by 
actual statement, omission, or intimation.
    (2) VA will apply the provisions of Sec.  21.4252(h) in making 
these payment decisions.

(Authority: 3034, 3689(d), 3696)

* * * * *
    (e) * * *
    (9) Taking a licensing or certification test after the date the 
State approving agency suspends approval of the test.

(Authority: 38 U.S.C. 3002(3), 3034, 3672(a), 3676, 3680(a), 
3680A(a), 3680A(f), 3680(g), 3689(d))


    55. Section 21.7124 is revised to read as follows:


Sec.  21.7124  Overcharges.

    (a) Overcharges by educational institutions may result in the 
disapproval of enrollments. VA may disapprove an educational 
institution for further enrollments when the educational institution 
charges or receives from a veteran or servicemember tuition and fees 
that exceed the established charges which the educational institution 
requires from similarly circumstanced nonveterans enrolled in the same 
course.

(Authority: 38 U.S.C. 3034, 3690(a))


    (b) Overcharges by organizations or entities offering licensing or 
certification tests may result in disapproval of tests. VA may 
disapprove an organization or entity offering a licensing or 
certification test when the organization or entity offering the test 
charges or receives from a veteran or servicemember fees which exceed 
the established fees that the organization or entity requires from 
similarly circumstanced nonveterans taking the same test.

(Authority: 38 U.S.C. 3689(d), 3690(a))


    56. Section 21.7131 is amended by:
    a. Revising the introductory text.
    b. Redesignating paragraph (a)(1) introductory text and paragraphs 
(a)(1)(i) through (a)(1)(v) as paragraph (a)(1)(i) and paragraphs 
(a)(1)(i)(A) through (a)(1)(i)(E), respectively; redesignating 
paragraph (a)(2) introductory text and paragraphs (a)(2)(i) and 
(a)(2)(ii) as paragraph (a)(1)(ii) and paragraphs (a)(1)(ii)(A) and 
(a)(1)(ii)(B), respectively; and adding a paragraph (a)(1) heading and 
new paragraph (a)(2).
    c. Revising the authority citation following paragraph (a).
    d. Removing the information collection approval parenthetical 
following paragraph (p).
    The revisions and additions read as follows:


Sec.  21.7131  Commencing dates.

    VA will determine under this section the commencing date of an 
award or increased award of educational assistance. When more than one 
paragraph in this section applies, VA will award educational assistance 
using the latest of the applicable commencing dates.
    (a) * * *
    (1) For other than licensing or certification tests.
* * * * *
    (2) For licensing or certification tests. VA will award educational 
assistance for the cost of a licensing or certification test only when 
the veteran or servicemember takes such test--
    (i) While the test is approved under 38 U.S.C. chapter 36;
    (ii) While the veteran or servicemember is eligible for educational 
assistance under this subpart; and
    (iii) No more than one year before the date VA receives a claim for 
reimbursement of the cost of the test.

(Authority: 38 U.S.C. 3014, 3023, 3034, 3672, 3689, 5110, 5113)

* * * * *


Sec.  21.7135  [Amended]

    57. Section 21.7135 is amended by:
    a. In the introductory text of paragraph (i), removing ``Sec.  
21.4211(d) and (g)'' and adding, in its place, ``Sec. Sec.  21.4215(d) 
and 21.4216''.
    b. In paragraph (i)(2), removing ``Sec.  21.4211(d) and (g)'' and 
adding, in its place, ``Sec.  21.4215(d)''.
    c. In paragraph (j)(1), removing ``director'' and adding, in its 
place, ``Director''.
    d. In paragraphs (j) and (k), removing ``facility'' each place that 
it appears, and adding, in its place, ``Regional Processing Office''.
    58. Section 21.7140 is amended by:
    a. Adding an authority citation for paragraph (b).
    b. Revising paragraph (c) introductory text, paragraph (c)(1) 
introductory text, and the authority citation following paragraph 
(c)(1)(ii).
    c. Adding paragraphs (c)(4) and (c)(5), and, at the end of the 
section, an information collection approval parenthetical.
    The revisions and additions read as follows:


Sec.  21.7140  Certifications and release of payments.

* * * * *
    (b) * * *

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


    (c) Other payments. Except for an individual who is seeking tuition 
assistance top-up an individual must be pursuing a program of education 
in order to receive payments of educational assistance under 38 U.S.C. 
chapter 30. To ensure that this is the case, the provisions of this 
paragraph must be met.
    (1) VA will pay educational assistance to a veteran or 
servicemember (other than one pursuing a program of apprenticeship, 
other on-job training, or a correspondence course; one seeking tuition 
assistance top-up; one seeking reimbursement for taking an approved 
licensing or certification test; one who qualifies for an advance 
payment; one who qualifies for an accelerated payment; or one who 
qualifies for a lump sum payment) only after:
    (i) * * *
    (ii) * * *

(Authority: 38 U.S.C. 3680(g), 3689)

* * * * *
    (4) VA will pay educational assistance to a veteran or 
servicemember as reimbursement for taking an approved licensing or 
certification test only after the veteran or servicemember has 
submitted to VA a copy of the veteran's or servicemember's official 
test results and, if not included in the results, a copy of another 
official form (such as a receipt or registration form) that together 
must include:
    (i) The name of the test;

[[Page 9219]]

    (ii) The name and address of the organization or entity issuing the 
license or certificate;
    (iii) The date the veteran or servicemember took the test; and
    (iv) The cost of the test.

(Authority: 38 U.S.C. 3689)


    (5) VA will pay educational assistance for tuition assistance top-
up only after the individual has submitted to VA a copy of the form(s) 
that the military service with jurisdiction requires for tuition 
assistance and that had been presented to the educational institution, 
covering the course or courses for which the claimant wants tuition 
assistance top-up. If the form(s) submitted did not contain the amount 
of tuition assistance charged to the individual, VA may delay payment 
until VA obtains that information from the educational institution. 
Examples of these forms include:
    (i) DA Form 2171, Request for Tuition Assistance--Army Continuing 
Education System;
    (ii) AF Form 1227, Authority for Tuition Assistance--Education 
Services Program;
    (iii) NAVMC 10883, Application for Tuition Assistance, and either 
NAVEDTRA 1560/5, Tuition Assistance Authorization or NAVMC (page 2), 
Tuition Assistance Authorization;
    (iv) Department of Homeland Security, USCG CG-4147, Application for 
Off-Duty Assistance; and
    (v) Request for Top-Up: eArmyU Program.

(Authority: 38 U.S.C. 5101(a))

* * * * *
(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
XXXX and 2900-XXXX.)

    59. Section 21.7142 is revised to read as follows:


Sec.  21.7142  Accelerated payments, payment of tuition assistance top-
up, and licensing or certification test reimbursement.

    (a) Amount of accelerated payment. An accelerated payment will be 
the lesser of--
    (1) 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
    (2) The aggregate amount of basic educational assistance to which 
the individual remains entitled under 38 U.S.C. chapter 30 at the time 
of the payment.

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


    (b) Amount of tuition assistance top-up. The amount of tuition 
assistance top-up VA will pay to an individual for a course is the 
lowest of the following:
    (1) All of the charges of the educational institution for the 
individual's education or training that the Secretary of the military 
department concerned has not paid under 10 U.S.C. 2007(a) or 2007(c);
    (2) That portion of the charges of the educational institution for 
the individual's education that the Secretary of the military 
department concerned has not paid under 10 U.S.C. 2007(a) or 2007(c) 
and for which the individual has stated to VA that he or she wishes to 
receive payment;
    (3) An amount VA will determine by multiplying the individual's 
remaining months and days of entitlement to educational assistance as 
provided under Sec.  21.7072 or Sec.  21.7073 by the individual's 
monthly rate of basic educational assistance as provided under Sec.  
21.7136 or Sec.  21.7137, as appropriate;
    (4) An amount VA will determine by multiplying the individual's 
remaining months and days of entitlement to tuition assistance top-up 
as provided under Sec.  21.7075 by the individual's monthly rate of 
basic educational assistance as provided under Sec.  21.7136 or Sec.  
21.7137, as appropriate; or
    (5) An amount VA will determine by--
    (i) Dividing the total number of days from the date on which the 
individual became eligible for educational assistance under the 
Montgomery GI Bill--Active Duty by the number of days in the term 
during which the individual took the course or course for which he or 
she wants tuition assistance top-up; and
    (ii) Multiplying the result by the amount stated in paragraph 
(a)(1) or (a)(2) of this section, as appropriate.

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


    (c) Amount of reimbursement for taking a licensing or certification 
test. The amount of educational assistance VA will pay as reimbursement 
for taking an approved licensing or certification test is the lowest of 
the following:
    (1) The fee that the licensing or certification organization 
offering the test charges for taking the test;
    (2) $2,000; or
    (3) An amount VA will determine by multiplying the veteran's or 
servicemember's remaining months and days of entitlement to educational 
assistance as provided under Sec.  21.7072 or Sec.  21.7073 by the 
veteran's or servicemember's monthly rate of basic educational 
assistance as provided under Sec.  21.7136 or Sec.  21.7137, as 
appropriate.

(Authority: 38 U.S.C. 3032(f))


    60. Section 21.7150 is amended by:
    a. Removing ``The'' and adding, in its place, ``Except for a 
veteran or servicemember seeking tuition assistance top-up or 
reimbursement for taking an approved licensing or certification test, 
the''.
    b. Revising the authority citation.
    The revision reads as follows:


Sec.  21.7150  Pursuit.

* * * * *

(Authority: 38 U.S.C. 3034(b))


    61. Section 21.7152 is amended by:
    a. In the introductory text, removing ``As stated in Sec.  21.7140 
of this part'' and adding, in its place, ``Except as stated in Sec.  
21.7140''.
    b. Revising paragraph (a).
    The revision reads as follows:


Sec.  21.7152  Certification of enrollment.

* * * * *
    (a) Educational institutions must certify most enrollments. VA does 
not, as a condition of payment of tuition assistance top-up or advance 
payment, require educational institutions to certify the enrollments of 
veterans or servicemembers who either are seeking tuition assistance 
top-up or, in the cases described in Sec.  21.7151, are seeking an 
advance payment. VA does not require organizations or entities offering 
a licensing or certification test to certify the fact that the veteran 
or servicemember took the test. In all other cases the educational 
institution must certify the veteran's or servicemember's enrollment 
before he or she may receive educational assistance. This certification 
must be in a form specified by the Secretary and contain such 
information as the Secretary may specify.

(Authority: 38 U.S.C. 3014(b), 3031, 3034, 3482(g), 3680, 3687, 
3689, 5101(a))

* * * * *
    62. Section 21.7220 is amended by:
    a. Revising paragraphs (b)(1) and (b)(2).
    b. In paragraphs (b)(3) through (b)(10), removing the commas at the 
end of the paragraphs and adding semicolons in their places.
    c. In paragraph (b)(11), removing the period and adding ``; and'' 
in its place.
    d. Adding paragraph (b)(12) immediately before the authority 
citation for paragraph (b).
    The revisions and addition read as follows:


Sec.  21.7220  Course approval.

* * * * *
    (b) * * *
    (1) Section 21.4250 (except paragraph (c)(1))--Jurisdiction for 
course and

[[Page 9220]]

licensing and certification test approval and approval notices;
    (2) Section 21.4251--Minimum period of operation requirement for 
educational institutions;
* * * * *
    (12) Section 21.4268--Approval of licensing and certification 
tests.
* * * * *
[FR Doc. 06-1219 Filed 2-21-06; 8:45 am]
BILLING CODE 8320-01-P