[Federal Register Volume 78, Number 110 (Friday, June 7, 2013)]
[Rules and Regulations]
[Pages 34250-34255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13504]


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DEPARTMENT OF DEFENSE

Office of the Secretary

32 CFR Part 65

[Docket ID: DOD-2009-OS-0021]
RIN 0790-AI43


Post-9/11 GI Bill

AGENCY: Office of the Under Secretary of Defense for Personnel and 
Readiness/Office of the Deputy Assistant Secretary of Defense for 
Military Personnel Policy, DoD.

ACTION: Final rule.

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SUMMARY: This final rule establishes policy, assigns responsibilities, 
and prescribes procedures for carrying out the Post-9/11 GI Bill. It 
establishes policy for the use of supplemental educational assistance 
(hereafter referred to as ``kickers'') for Service members with 
critical skills or specialties, or for members serving additional 
service; for authorizing the transferability of education benefits 
(TEB); and the DoD Office of the Actuary to perform determinations in 
support of DoD funding responsibilities.

DATES: Effective Date: This rule is effective July 8, 2013.

FOR FURTHER INFORMATION CONTACT: Robert Clark, (703) 697-9267.

SUPPLEMENTARY INFORMATION: 

[[Page 34251]]

Executive Summary

I. Purpose of the Regulatory Action

    This rule will provide the mechanism to implement the Secretary of 
Defense authorities with regard to Supplemental Educational Benefits 
(Kickers) and transferability of educational benefits to family members 
to aid recruiting and retention of the Armed Forces under chapter 33 38 
U.S.C. chapter 33, and enable the Secretary of Defense to establish 
policy, assign responsibilities, and prescribe procedures for such 
authorities.

II. Summary of the Major Provisions of the Regulatory Action in 
Question

    This rule establishes policy, assigns responsibilities, and 
prescribes procedures for carrying out the Post-9/11 GI Bill, as 
codified in 38 U.S.C. chapter 33. It establishes policy for the use of 
supplemental educational assistance ``kickers'', for members with 
critical skills or specialties, or for members serving additional 
service; for authorizing the transferability of education benefits; and 
for the DoD Education Benefits Fund Board of Actuaries to perform 
determinations in support of DoD funding responsibilities for 
``kickers.''

III. Costs and Benefits

    There is no cost to the public. Administrative costs to the 
Department of Defense for implementation of the authorities under this 
rule are negligible. Workload will be accomplished with existing 
staffing and be integrated into normal business. There will be no new 
costs for supplemental educational assistance, or ``kickers'', since 
the Services will use existing programmed and budgeted resources 
currently dedicated to Montgomery GI Bill (MGIB) ``kickers''. Benefits 
of ``kickers'' should parallel those of the existing MGIB ``kickers'', 
which give the Services the ability to channel ``high-quality'' youth 
into critical ``hard-to-fill'' specialties. Transferability of 
educational benefits to family members will aid recruiting and 
retention of the Armed Forces.

Public Comments

    The Department of Defense published an interim final rule on June 
5, 2009 (74 FR 30212-30220) with a request for comments. The following 
two comments were received:
    Comment 1: The Post-9/11 GI Bill does not allow funds to be 
allocated for advanced flight training. Any training beyond the pilot 
certificate is considered progressive and career oriented in nature. 
The airline industry continues to see a decline in the number of future 
pilots currently in training due to the increase in costs, the immense 
number of hours required to achieve an Airline Transport Rating, and a 
decade of low interest in taking up Piloting as a career. As such, 
allowing Post-9/11 GI Bill funds to be used for pilot training beyond 
the private pilot certificate would not only energize more soldiers to 
seek a career in aviation, it will open up the potential for flight 
schools, future hires, as well as injecting mature career oriented 
veterans into the airline industry.
    Comment 2: When this document was initially introduced, information 
was obtained from the state of California regarding public universities 
only and doesn't provide for an opportunity for veterans to utilize 
benefits that they qualify because the cost of tuition is listed as 
zero. There are a large majority of public universities and colleges 
that are no longer accepting applications thereby forcing applicants to 
apply for private universities. With the tuition listed as zero, no 
tuition is being paid for veterans in California.
    DoD Response to Comments 1 and 2: DoD's final rule is limited to 
specific DoD roles relating to administration of the Post-9/11 GI Bill. 
These are the establishment of policy for the use of supplemental 
educational assistance (``kickers'') for Service members with critical 
skills or specialties, or for members serving additional service; for 
authorizing the transferability of education benefits (TEB); and the 
DoD Office of the Actuary to perform determinations in support of DoD 
funding responsibilities. The two public comments received are outside 
the scope of this rule and relate specifically to the implementation of 
the actual Post-9/11 GI Bill benefit, which is implemented by the 
Department of Veterans Affairs (VA). VA decides how the GI Bill 
benefits may be used for aviation school and also implements benefits 
available for use towards private school tuition (which is about 
$18,000 per year now), not DoD.

Regulatory Procedures

Executive Order 12866, ``Regulatory Planning and Review'' and Executive 
Order 13563, ``Improving Regulation and Regulatory Review''

    It has been certified that 32 CFR part 65 does not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy; a section of the 
economy; productivity; competition; jobs; the environment; public 
health or safety; or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
these Executive Orders.

Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    It has been certified that 32 CFR part 65 does not contain a 
Federal mandate that may result in expenditure by State, local and 
tribal governments, in aggregate, or by the private sector, of $100 
million or more in any one year.

Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    It has been certified that 32 CFR part 65 is not subject to the 
Regulatory Flexibility Act (5 U.S.C. 601) because it would not, if 
promulgated, have a significant economic impact on a substantial number 
of small entities.

Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)

    It has been certified that 32 CFR part 65 does not impose reporting 
or recordkeeping requirements under the Paperwork Reduction Act of 
1995.

Executive Order 13132, ``Federalism''

    It has been certified that 32 CFR part 65 does not have federalism 
implications, as set forth in Executive Order 13132. This rule does not 
have substantial direct effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 65

    Armed forces, Education.

    Accordingly 32 CFR part 65 is revised to read as follows:

PART 65--POST-9/11 GI BILL

Sec.
65.1 Purpose.
65.2 Applicability.
65.3 Definitions.
65.4 Policy.
65.5 Responsibilities.
65.6 Procedures.

    Authority: 38 U.S.C. chapter 33.


Sec.  65.1  Purpose.

    This part:

[[Page 34252]]

    (a) Establishes policy, assigns responsibilities, and prescribes 
procedures for implementing DoD authorities and responsibilities for 
chapter 33 of title 38, United States Code (U.S.C.) (also known and 
hereafter referred to as ``the Post-9/11 GI Bill'')
    (b) Establishes policy for the use of supplemental educational 
assistance (hereafter referred to as ``kickers'') for Service members 
with critical skills or specialties, or for members serving additional 
service in accordance with 38 U.S.C. 3316.
    (c) Establishes policy for authorizing the transferability of 
education benefits (TEB) in accordance with 38 U.S.C. 3319.
    (d) Assigns responsibility to the DoD Office of the Actuary to 
perform determinations in support of DoD funding responsibilities for 
38 U.S.C. chapter 33 in accordance with 10 U.S.C. 183 and 2006.


Sec.  65.2  Applicability.

    This part applies to the Office of the Secretary of Defense, the 
Military Departments (including the Coast Guard at all times, including 
when it is a Service in the Department of Homeland Security (DHS) by 
agreement with that Department), the Office of the Chairman of the 
Joint Chiefs of Staff and the Joint Staff, the Combatant Commands, the 
Office of the Inspector General of the Department of Defense, the 
Defense Agencies, the DoD Field Activities, and all other 
organizational entities within the DoD (hereinafter referred to 
collectively as the ``DoD Components''). Section 65.6 of this part also 
applies to the Commissioned Corps of the Public Health Service (PHS) by 
agreement with the Surgeon General, and to the National Oceanic and 
Atmospheric Administration Commissioned Officer Corps (NOAA Corps) by 
agreement with the Director, NOAA Corps.


Sec.  65.3  Definitions.

    Unless otherwise noted, these terms and their definitions are for 
the purpose of this part:
    Active duty. For the Post-9/11 GI Bill, the term ``active duty'' is 
defined in 38 U.S.C. 3301(1).
    Affiliation kicker. Supplemental educational assistance that may be 
offered by the Secretary of a Military Department to the monthly amount 
of educational assistance otherwise payable to an individual pursuant 
to paragraph (1)(B), or to paragraphs (2) through (7) (as applicable), 
of 38 U.S.C. 3313(c), to a Service member who is separating honorably 
from a regular component and who agrees to serve in the Selected 
Reserve in a skill, specialty, or unit in which there is a critical 
shortage of personnel or for which it is difficult to recruit and/or 
retain.
    Enlistment kicker. Supplemental educational assistance that may be 
offered by a Secretary of a Military Department to the monthly amount 
of educational assistance otherwise payable to an individual pursuant 
to paragraph (1)(B), or to paragraphs (2) through (7) (as applicable), 
of 38 U.S.C. 3313(c), who initially enlists in a regular component in a 
skill or specialty in which there is a critical shortage of personnel 
or for which it is difficult to recruit.
    Family member. A spouse or child as codified in 38 U.S.C. 101 who 
is enrolled in Defense Eligibility Enrollment Reporting System (DEERS).
    Kickers. Supplemental educational assistance that may be offered by 
a Secretary of a Military Department to the monthly amount of 
educational assistance otherwise payable to an individual pursuant to 
paragraph (1)(B), or to paragraphs (2) through (7) (as applicable), of 
38 U.S.C. 3313(c).
    Reenlistment kicker. Supplemental educational assistance that may 
be offered by a Secretary of a Military Department to the monthly 
amount of educational assistance otherwise payable to an individual 
pursuant to paragraph (1)(B), or to paragraphs (2) through (7) (as 
applicable), of 38 U.S.C. 3313(c), to a member who, after completing 5 
or more years of continuous service, signs an agreement to remain on 
active duty for a period of at least 2 years.
    Secretary Concerned. For a member of the Army, the Navy, the Air 
Force, the Marine Corps, and the Coast Guard when it is operating as a 
Service of the Department of the Navy, the term means the Secretary of 
the Military Department with jurisdiction over that Service member. For 
a member of the Coast Guard when the Coast Guard is operating as a 
Service of the DHS, the term means the Secretary of Homeland Security. 
For a member of the PHS, the term means the Surgeon General. For a 
member of the NOAA Corps, the term means the Director, NOAA Corps.
    Service member. An individual serving on active duty or in the 
Selected Reserve. Does not include other members of the Ready Reserve 
(such as the Individual Ready Reserve, standby Reserve, or retired 
Service members, unless they are serving on active duty.) For purposes 
of Sec.  65.6, includes members of the PHS and members of the NOAA 
Corps.


Sec.  65.4  Policy.

    It is DoD policy that:
    (a) Kickers may be authorized to assist in the recruitment, reserve 
affiliation, and retention of individuals into skills or specialties in 
which there are critical shortages or for which it is difficult to 
recruit or, in the case of critical units, to retain personnel.
    (b) Transferability of education benefits may be used to promote 
recruitment and retention.


Sec.  65.5  Responsibilities.

    (a) The Deputy Assistant Secretary of Defense for Military 
Personnel Policy (DASD(MPP)), under the authority, direction, and 
control of the Assistant Secretary of Defense for Readiness and Force 
Management, shall:
    (1) Develop guidance and procedures for implementation and 
oversight of DoD authorities and responsibilities under the Post-9/11 
GI Bill.
    (2) Coordinate administrative procedures of the Post-9/11 GI Bill 
with the Department of Veterans Affairs (VA), and other appropriate DoD 
and intergovernmental agencies, as applicable.
    (3) Review and approve each Military Department plan to use 
supplemental assistance in accordance with the provisions of 38 U.S.C. 
3316.
    (4) Establish the standard data elements needed to administer the 
Post-9/11 GI Bill.
    (b) The Under Secretary of Defense (Comptroller) (USD(C))/Chief 
Financial Officer (CFO) (USD(C)/CFO), Department of Defense shall:
    (1) Provide guidance on budgeting, accounting, and funding for the 
educational benefits program in support of plans established in Sec.  
65.6, and for investing the available DoD Education Benefits Fund 
balance.
    (2) In coordination with the DASD(MPP), review and approve the 
Military Department budget estimates for the supplemental payments in 
accordance with the provisions of 38 U.S.C. 3316.
    (c) The Director, Department of Defense Human Resources Activity 
(DoDHRA), under the authority, direction, and control of the Under 
Secretary of Defense for Personnel and Readiness, shall ensure the 
Director, Defense Manpower Data Center (DMDC) shall:
    (1) Replicate Post 9/11 GI Bill eligibility data using the Veterans 
Affairs and DoD Identity Repository (VADIR) with the DVA as needed and 
specified.
    (i) Maintain personnel information needed by the DVA to determine 
benefit entitlement.
    (ii) Maintain DVA payment and usage data for the Post 9/11 GI Bill 
program.

[[Page 34253]]

    (2) [Reserved]
    (d) The Secretaries Concerned shall:
    (1) Provide implementing guidance within their Department to govern 
the administration of the Post-9/11 GI Bill consistent with this part 
and other guidance issued by the DASD(MPP) and the USD(C)/CFO 
consistent with the needs of the Military Services. This guidance must 
include Service implementation of kickers and the transfer of unused 
educational benefits as established in 38 U.S.C. 3319, as outlined in 
Sec.  65.6.
    (2) Ensure that all eligible active duty Service members and 
members of the Reserve Components are aware that they are automatically 
eligible for Post-9/11 GI Bill educational assistance upon serving the 
required active duty time as outlined in 38 U.S.C. 3311.
    (3) Ensure that all officers without earlier established 
eligibility, following commissioning through the Service academies 
(with the exception of the Coast Guard Academy for individuals who 
enter into an agreement to service before January 4, 2011) or Reserve 
Officer Training Corps Scholarship Programs consistent with 10 U.S.C. 
2107, are aware that their eligible period of active duty for Post-9/11 
GI Bill benefits does not begin until they have completed their 
statutory obligated active duty service. Ensure that such officers are 
aware that any active duty service after that obligated period of 
service may qualify as active duty service for Post-9/11 GI Bill 
eligibility.
    (4) Ensure that all Service members participating in the student 
loan repayment program in accordance with 10 U.S.C. chapter 109 are 
aware that their service counted pursuant to 10 U.S.C. chapter 109 does 
not count as qualifying active duty service for Post-9/11 GI Bill 
eligibility. Ensure that such Service members are aware that any 
service after that obligated period of service may qualify as active 
duty service for Post-9/11 GI Bill eligibility.
    (5) Authorize kickers for recruitment and retention of individuals 
with critical skills or in programs that are hard to recruit or retain 
in accordance with 38 U.S.C. 3316, and advise the DASD(MPP) of such 
approval.
    (6) Budget for and transfer funds to support the kickers, in 
accordance with Sec.  65.6 of this part and guidance issued by the 
USD(C)/CFO.
    (7) Ensure pre-separation or release from active duty counseling on 
Post-9/11 GI Bill benefits to active duty members and members of the 
Reserve Components with qualifying active duty service and document 
this counseling accordingly.
    (8) Promulgate guidance for their Service(s) to administer the 
transferability of unused education entitlements to family members to 
support recruiting and retention in accordance with Sec.  65.6.
    (9) Ensure maintenance of records for individuals who receive 
kickers in accordance with 38 U.S.C. 3316. Provide those records to the 
DMDC and VA.
    (10) Report all qualifying active duty pursuant to DoD Manual 
7730.54-M-V1, ``Reserve Component Common Personnel Data System 
(RCCPDS)'' (see http://www.dtic.mil/whs/directives/corres/pdf/773054m_vol1.pdf).
    (11) Direct use of DoD standard data elements and codes established 
by DoD Instruction 1336.05, ``Automated Extract of Active Duty Military 
Personnel Records'' (see http://www.dtic.mil/whs/directives/corres/pdf/133605p.pdf) and DoD Manual 7730.54-M when specified.


Sec.  65.6  Procedures.

    (a) General eligibility. Eligibility and administration of the 
Post-9/11 GI Bill are the responsibility of the VA. Policies and 
procedures for utilization of Post-9/11 GI Bill benefits are available 
from that agency. Those policies and procedures are codified in 38 CFR 
part 21 and presented and updated at http://www.gibill.va.gov.
    (b) Kickers--(1) Enlistment kickers. The use of enlistment kickers 
should be based on the criticality of the skill or the length of 
enlistment commitment and may be offered in amounts from $150 to $950 a 
month in increments of $100. Reporting codes for enlistment kickers are 
listed in DoD Instruction 1336.05 and DoD Manual 7730.54-M-V1.
    (2) Affiliation kickers. The use of affiliation kickers shall be 
based on the criticality of the skill and/or unit and the length of 
Selected Reserve commitment, and may be offered in amounts from $150 to 
$950 a month in increments of $100. If an individual is already 
eligible for an enlistment kicker, the amount of the affiliation kicker 
is limited to the amount that would take the total to $950. For those 
individuals who are offered an affiliation kicker on top of an 
enlistment kicker, the increases above the enlistment kicker will be in 
$100 increments. Reporting codes for affiliation kickers are the same 
as the codes for enlistment kickers listed in DoD Instruction 1336.05 
and DoD Manual 7730.54-M-V1.
    (3) Reenlistment kickers. The use of reenlistment kickers should be 
based on the criticality of the skill and may be offered in amounts 
from $100 to $300 a month in increments of $100, based on length of 
additional service. Reporting codes for reenlistment kickers are listed 
in DoD Instruction 1336.05 and DoD Manual 7730.54-M-V1.
    (4) Payment of kickers. Kickers are paid by VA in conjunction with 
the monthly stipend paid pursuant to 38 U.S.C. 3313(c).
    (c) Transferability of unused education benefits to family members. 
Subject to the provisions of this section, the Secretary Concerned, to 
promote recruitment and retention in the Uniformed Services, may permit 
an individual eligible for Post-9/11 GI Bill educational assistance to 
elect to transfer to one or more of his or her family members all or a 
portion of his or her entitlement to such assistance (see paragraphs 
(c)(1) and (c)(2) of this section).
    (1) Eligible individuals. Any Service member on or after August 1, 
2009, who is entitled to the Post-9/11 GI Bill at the time of the 
approval of his or her request to transfer that entitlement under this 
section, may transfer that entitlement provided he or she meets one of 
these conditions:
    (i) Has at least 6 years of service in the Military Services 
(active duty or Selected Reserve), NOAA Corps, or PHS on the date of 
approval and agrees to serve 4 additional years in the Military 
Services, NOAA Corps, or PHS from the date of election.
    (ii) Has at least 10 years of service in the Military Services 
(active duty or Selected Reserve), NOAA Corps, or PHS on the date of 
approval, is precluded by either standard policy (Service or DoD) or 
statute from committing to 4 additional years, and agrees to serve for 
the maximum amount of time allowed by such policy or statute.
    (iii) Is or becomes retirement eligible during the period from 
August 1, 2009, through July 31, 2012, and agrees to serve the 
additional period, if any, specified in paragraphs (c)(1)(iii)(A) 
through (c)(1)(iii)(D) of this section. A Service member is considered 
to be retirement eligible if he or she has completed 20 years of active 
Federal service or 20 qualifying years as computed pursuant to 10 
U.S.C. 12732. This paragraph will no longer be in effect on August 1, 
2013, and on or after that date all members must comply with paragraphs 
(c)(1)(i) or (c)(1)(ii) of this section to be eligible for transfer of 
unused education benefits to family members.
    (A) For individuals eligible for retirement on August 1, 2009, no 
additional service is required.
    (B) For individuals eligible for retirement after August 1, 2009, 
and

[[Page 34254]]

before August 1, 2010, 1 year of additional service is required.
    (C) For individuals eligible for retirement on or after August 1, 
2010, and before August 1, 2011, 2 years of additional service is 
required.
    (D) For individuals eligible for retirement on or after August 1, 
2011, and before August 1, 2012, 3 years of additional service is 
required.
    (iv) The provisions of paragraph (c)(1)(iii) of this section will 
apply to Service members recalled to active duty under the provisions 
of 10 U.S.C. 688 or members of the Individual Ready Reserve ordered to 
active duty under the provisions of 10 U.S.C. 12301(d) only when the 
active duty is for a period of at least 90 days.
    (2) Eligible family members. (i) An individual approved to transfer 
an entitlement to educational assistance under this section may 
transfer that entitlement to his or her spouse, to one or more of his 
or her children, or to a combination of his or her spouse and one or 
more children.
    (ii) For purposes of this provision, the definition of spouse and 
child are as codified in 38 U.S.C. 101. Confirmation of family members 
will be made using the DEERS.
    (iii) Once an individual has designated a child as a transferee, a 
child's subsequent marriage will not affect his or her eligibility to 
receive the educational benefit; however, the individual retains the 
right to revoke or modify the transfer at any time.
    (iv) Once an individual has designated a spouse as a transferee, 
subsequent divorce will not affect the transferee's eligibility to 
receive educational benefits; however, the eligible individual retains 
the right to revoke or modify the transfer at any time.
    (3) Months of transfer. Months transferred must be whole months. 
The number of months of benefits transferred by an individual under 
this section may not exceed the lesser of:
    (i) The months of Post-9/11 GI Bill unused benefits available.
    (ii) 36 months.
    (4) Transferee usage. (i) Policies and procedures for family member 
use of Post-9/11 GI Bill transferred educational benefits are the 
responsibility of the VA. Those policies and procedures are codified in 
38 CFR part 21 and presented and updated at http://www.gibill.va.gov.
    (ii) Commencement of use by a family member is subject to these 
conditions:
    (A) A spouse may start to use the benefit only after the individual 
making the transfer has completed at least 6 years of service in the 
Military Services, NOAA Corps, or PHS.
    (B) A child may start to use the benefit after the individual 
making the transfer:
    (1) Has completed at least 10 years of service in the Military 
Services, NOAA Corps, or PHS, or
    (2) Is separated for one of the reasons referred to in paragraph 
(c)(7)(ii) or (c)(7)(iii) of this section.
    (5) Designation of transferee. An individual transferring an 
entitlement to educational assistance under this section shall, through 
notification to the Secretary Concerned as specified in paragraph 
(c)(9) of this section:
    (i) Designate the family member or members to whom such entitlement 
is being transferred.
    (ii) Designate the number of months of such entitlement to be 
transferred to each family member.
    (iii) Specify the period for which the transfer shall be effective 
for each family member. The effective period must be on or after the 
date of designation.
    (6) Time for transfer, revocation, and modification--(i) Time for 
transfer. An individual approved to transfer entitlement to educational 
assistance under this section may transfer such entitlement to the 
individual's family member only while serving in the Military Services 
(active duty or Selected Reserve.), NOAA Corps, or PHS. An individual 
may not add family members after retirement or separation from the 
Uniformed Services.
    (ii) Modification or revocation. (A) An individual transferring 
entitlement in accordance with this section may modify or revoke at any 
time the transfer of any unused portion of the entitlement so 
transferred.
    (1) An individual may add new family members, modify the number of 
months of the transferred entitlement for existing family members, or 
revoke transfer of entitlement while serving in the Uniformed Services.
    (2) An individual may not add family members after retirement or 
separation from the Military Services, NOAA Corps, or PHS, but may 
modify the number of months of the transferred entitlement or revoke 
transfer of entitlement after retirement or separation for those family 
members who have received transferred benefits prior to separation or 
retirement.
    (B) The modification or revocation of the transfer of entitlement 
shall be made by submitting notice of the action to both the Secretary 
of the Military Department concerned and the Secretary of Veterans 
Affairs. Additions, modifications, or revocations made while in the 
Military Services, NOAA Corps, or PHS will be made through the TEB Web 
site as described in paragraph (c)(8) of this section. Modifications or 
revocations after separation from the Military Services, NOAA Corps, or 
PHS will be accomplished through VA.
    (7) Failure to complete service agreement. (i) Except as provided 
in this section, if an individual transferring entitlement under this 
section fails to complete the service agreed to consistent with 
paragraph (c)(1) of this section in accordance with the terms of the 
agreement, the amount of any transferred entitlement that is used as of 
the date of such failure shall be treated as an overpayment of 
educational assistance and shall be subject to collection by VA.
    (ii) Paragraph (c)(7)(i) of this section shall not apply to an 
individual who fails to complete service agreement due to:
    (A) His or her death.
    (B) Discharge or release from active duty or the Selected Reserve 
for a medical condition that pre-existed his or her service and was not 
service-connected.
    (C) Discharge or release from active duty or the Selected Reserve 
for hardship as determined by the Secretary of the Military Department 
concerned.
    (D) Discharge or release from active duty or the Selected Reserve 
for a physical or mental condition, not a disability, that did not 
result from his or her willful misconduct, but did interfere with the 
performance of duty.
    (iii) The transferor is also considered to have completed his or 
her service agreement as a result of being discharged for a disability 
or a reduction in force or force shaping.
    (iv) The Secretaries of the Military Departments may promulgate 
guidance regarding waiver of the military service obligation agreed to 
consistent with paragraph (c)(1) of this section if the individual 
revokes all transfers and no benefits have been used.
    (8) Procedures. All requests and transactions for individuals who 
remain in the Uniformed Services will be completed through the TEB Web 
application at https://www.dmdc.osd.mil/milconnect/. The TEB Users 
Manual, maintained on that site, will provide instruction for 
enrollment; verification; and additions, changes, and revocations. 
Modifications or revocations after separation from the Uniformed 
Services will be accomplished through VA.
    (9) Regulations. The Secretaries of the Military Departments shall 
promulgate guidance to administer the transferability of unused 
education entitlements to family members in

[[Page 34255]]

accordance with this part. Such guidance shall specify:
    (i) The manner of verifying and documenting the additional service 
commitment, if any, consistent with paragraph (c)(1) of this section, 
to be authorized to transfer education benefits.
    (ii) The manner of determining eligibility to authorize the 
transfer of education benefits as allowed in paragraphs (c)(1)(i), 
(c)(1)(ii), or (c)(1)(iii) of this section.

    Dated: May 31, 2013.
Patricia L. Toppings,
OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2013-13504 Filed 6-6-13; 8:45 am]
BILLING CODE 5001-06-P