[Federal Register Volume 88, Number 100 (Wednesday, May 24, 2023)]
[Proposed Rules]
[Pages 33672-33720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08884]



[[Page 33671]]

Vol. 88

Wednesday,

No. 100

May 24, 2023

Part II





Department of Veterans Affairs





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38 CFR Part 21





Post-9/11 Improvements, Fry Scholarship, and Interval Payments 
Amendments; Proposed Rule

  Federal Register / Vol. 88 , No. 100 / Wednesday, May 24, 2023 / 
Proposed Rules  

[[Page 33672]]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AQ88


Post-9/11 Improvements, Fry Scholarship, and Interval Payments 
Amendments

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) is proposing to amend 
the Veteran Readiness and Employment and Education regulations to 
implement the provisions of the Post-9/11 Veterans Educational 
Assistance Improvements Act of 2010, which modified the manner in which 
payments of educational assistance are determined and expanded the 
types of programs students may pursue under the Post-9/11 GI Bill. VA 
is also proposing to implement section 1002 of the Supplemental 
Appropriations Act, 2009, which authorized the ``Marine Gunnery 
Sergeant John David Fry Scholarship,'' and a select number of 
provisions of the Harry W. Colmery Veterans Educational Assistance Act 
of 2017. This proposed rule would include the rules necessary to 
implement provisions of other legislative enactments that affect the 
provision of educational assistance to veterans and their eligible 
dependents and beneficiaries.

DATES: Comments must be received on or before July 24, 2023.

ADDRESSES: Comments must be submitted through www.regulations.gov. 
Except as provided below, comments received before the close of the 
comment period will be available at www.regulations.gov for public 
viewing, inspection, or copying, including any personally identifiable 
or confidential business information that is included in a comment. We 
post the comments received before the close of the comment period on 
the following website as soon as possible after they have been 
received: http://www.regulations.gov. VA will not post on 
Regulations.gov public comments that make threats to individuals or 
institutions or suggest that the commenter will take actions to harm 
the individual. VA encourages individuals not to submit duplicative 
comments. We will post acceptable comments from multiple unique 
commenters even if the content is identical or nearly identical to 
other comments. Any public comment received after the comment period's 
closing date is considered late and will not be considered in the final 
rulemaking.

FOR FURTHER INFORMATION CONTACT: Thomas Alphonso, Assistant Director, 
Policy and Procedures, Education Service, Department of Veterans 
Affairs, Veterans Benefits Administration (22), 810 Vermont Avenue NW, 
Washington, DC 20420. Telephone: (202) 461-9800. (This is not a toll-
free telephone number.)

SUPPLEMENTARY INFORMATION:

I. Post-9/11 GI Bill Improvements

a. General

    On January 4, 2011, the President signed into law the Post-9/11 
Veterans Educational Assistance Improvements Act of 2010, Public Law 
111-377, amending mainly chapter 33 of title 38, United States Code 
(U.S.C.); however, a few amendments in the law have an impact on other 
VA educational assistance programs and title 38 chapters.

b. Effective Dates of Amendments Contained in Public Law 111-377

    In most instances, the changes made by Public Law 111-377 had an 
effective date of August 1, 2011, although some became effective on the 
date of enactment, some became effective after an interval of time 
after the signing of the Act (e.g., effective 60 days after the date of 
the enactment of this Act, see section 103(c)), some became effective 
on October 1, 2011, and some became effective on a retroactive basis. 
In this proposed rule, we propose to clarify the effective dates of 
each provision in existing and new VA regulations. For instance, 
existing 38 CFR 21.9505, 21.9560, 21.9570, 21.9590, 21.9600, 21.9625, 
21.9635, 21.9640, 21.9675, 21.9680, 21.9690 and 21.9720 would be 
amended to include language explaining that the rules contained in 
those existing sections describe the standards in effect before August 
1, 2011, unless otherwise noted, whereas Sec. Sec.  21.9506, 21.9561, 
21.9571, 21.9591, 21.9601, 21.9626, 21.9636, 21.9641, 21.9667, 21.9668, 
21.9676, 21.9681, 21.9691 and 21.9721 would be added with rules 
comparable to rules in existing provisions, but applicable after July 
31, 2011, unless otherwise noted.

c. Section 101--Modification of Entitlement to Educational Assistance

    Section 101(a)(1) of Public Law 111-377 amended 38 U.S.C. 3301(1) 
by adding a paragraph that expands the definition of active duty to 
include full-time service in the National Guard for certain purposes. 
We propose to implement section 101(a)(1) in proposed Sec. Sec.  
21.9505 and 21.9506. Under the expanded definition of active duty, 
these National Guard members are eligible for Post-9/11 GI Bill 
benefits. Section 101(d)(1) prohibits VA from paying benefits because 
of the amendment to section 3301(1) before October 1, 2011, but 
provides for an effective date of August 1, 2009, for the section 
101(a)(1) amendment. Therefore, although a National Guard member may be 
entitled to Post-9/11 GI Bill benefits for the period between August 1, 
2009, and September 30, 2011, we could not pay these benefits until 
October 1, 2011. Presently, under current 38 CFR 21.9625(a)(1), if an 
award is the first award of educational assistance for the program of 
education the eligible person is pursuing under the Post-9/11 GI Bill, 
the commencing date of the award of educational assistance is the 
latest of: (a) August 1, 2009, the earliest possible beginning date as 
provided in Sec.  21.9625; (b) the date the educational institution 
certifies; (c) one year before the date of claim as determined by Sec.  
21.1029(b); (d) the effective date of the approval of the course, or 
(e) one year before the date VA receives the approval notice.
    For example, if a National Guard member applied for chapter 33 
benefits on October 12, 2011, and it is determined that the member was 
eligible for educational assistance beginning August 1, 2009, under 
current Sec.  21.9625(a)(1)(B) benefits could not be paid for any 
period earlier than October 12, 2010, i.e., one year prior to the date 
of application. Although the National Guard member was eligible for 
benefits from August 1, 2009, because this member did not apply until 
October 12, 2011, under our current regulations the furthest back that 
VA could pay benefits is October 12, 2010. This is problematic because 
National Guard members would not have applied for benefits until after 
January 4, 2011, when they first became eligible for benefits under the 
change in law. However, if National Guard members applied for benefits 
on January 4, 2011, because of current law they would only be paid from 
January 4, 2010, the latest of the specified beginning dates, instead 
of August 1, 2009, the earliest possible beginning date, thereby losing 
out on retroactive benefits. To remedy this problem, we propose to add 
Sec.  21.9626(n) to provide special rules for determining the beginning 
dates of awards for National Guard members made eligible by Public Law 
111-377. With these changes VA could pay retroactive benefits to newly 
eligible National Guard members beyond the one-year limit required by 
current regulations.
    Additionally, while the statute is silent as to a time limit for 
retroactive claims, for the reasons discussed below,

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VA is proposing to adopt a time limit for newly eligible National Guard 
members to file a claim for retroactive benefits. Our concern is that 
without a limited window for claims for retroactive payment, we will 
continue to see claims far into the future, which could result in 
increased unforeseen burdens and costs for VA. Therefore, in Sec.  
21.9626(n), VA proposes to specify that the special beginning-date 
rules are only available to a newly eligible National Guard member if 
he or she applied for retroactive benefits by September 30, 2012 (i.e., 
one year from the first day on which VA was statutorily allowed to make 
payments to the National Guard members for the expanded benefits). 
After the expiration of the one-year period, the beginning-date rules 
under Sec.  21.9625 for determining a beginning date would apply.
    Under 38 U.S.C. 5110(g) and 5113(a), benefits based on a new, 
liberalizing statute generally may be paid for periods no earlier than 
one year before the date of application therefor. The purpose of that 
one-year retroactive period is to provide claimants a reasonable grace 
period in which to learn of the new law and file their claims for the 
newly authorized benefit. See McCay v. Brown, 9 Vet. App. 183, 187-88 
(1996). As noted above, however, imposing a one-year retroactive limit 
to benefits authorized by section 101(a)(1) of Public Law 111-377 would 
defeat the clear purpose of section 101(a)(1) and (d)(1) to authorize 
payments for periods extending back to August 1, 2009, more than a year 
before the statute's enactment. We believe proposed Sec.  21.9626(n) 
appropriately gives effect to all applicable statutes by providing a 
one-year grace period for applying for the new benefits and ensuring 
that those who applied within that period potentially may receive the 
full extent of retroactive benefits authorized by section 101(a)(1) and 
(d)(1).
    Section 101(a)(2) of Public Law 111-377 amended 38 U.S.C. 
3301(2)(A) by adding ``One Station Unit Training'' to the definition of 
``entry level and skill training'' for members of the Army (effective 
January 4, 2011), and section 101(a)(3) amended 38 U.S.C. 3301(2)(E) by 
adding ``Skill Training (or so-called ``A'' School)'' to the definition 
of ``entry level and skill training'' for members of the Coast Guard 
(effective January 4, 2011, and applicable to individuals entering 
service on or after that date). We propose to add ``One Station Unit 
Training'' for Army members and ``Skill Training (or so-called ``A'' 
School)'' for Coast Guard members to the definition of ``entry level 
and skill training'' in 38 CFR 21.9505 (definitions applicable prior to 
August 1, 2011, to the administration of the chapter 33 program). We 
propose to note that the inclusion of ``One Station Unit Training'' for 
Army members and ``Skill Training (or so-called ``A'' School)'' for 
Coast Guard members in the definition of ``entry level and skill 
training'' applies effective January 4, 2011.
    Section 101(b) of Public Law 111-377 amended 38 U.S.C. 3311(c)(4) 
(effective January 4, 2011, with respect to discharges or releases that 
occur on or after that date) to clarify that a discharge or release 
from active duty for a preexisting, non-service-connected condition, 
hardship, or a condition that interfered with duty must be honorable 
for the individual to establish eligibility for educational assistance. 
We propose to include this honorable discharge requirement in Sec.  
21.9520(a)(5). Additionally, in Sec.  21.9520(a) we propose to amend 
the chapter 33 eligibility criteria to clarify the need for an 
honorable discharge with respect to these types of discharges on or 
after January 4, 2011.
    Section 101(c) of Public Law 111-377 amended 38 U.S.C. 3311(d)(2) 
to prohibit service pursuant to an agreement in connection with 
attendance at the Coast Guard Academy from being considered active duty 
for purposes of establishing entitlement to educational assistance 
under chapter 33 (effective January 4, 2011, with respect to 
individuals entering into agreements on or after that date). We propose 
to implement this change in the definition of ``active duty'' in 38 CFR 
21.9505 and 21.9506, specifically in paragraph (3)(ii)(B)(2) of the 
definition of ``active duty'' in both sections. Although section 101(c) 
referred to 14 U.S.C. 182 as the statute governing Coast Guard Academy 
service agreements, Congress later replaced section 182 with 14 U.S.C. 
1925. We propose to refer to the current statute.

d. Section 102--Amounts of Assistance for Programs of Education Leading 
to a Degree Pursued at Public, Non-Public, and Foreign Institutions of 
Higher Learning (IHL)

    Section 102(a) of Public Law 111-377 amended 38 U.S.C. 3313(c) to 
specify the amount of assistance to be paid for pursuit of a program of 
education leading to a degree on more than a half-time basis at a 
public, non-public, or foreign IHL. The amended law provides that, 
effective August 1, 2011, the amount of educational assistance for 
payment of tuition and fees for an individual's pursuit of an approved 
program of education leading to a degree on more than a half-time basis 
at a public IHL is the actual net cost for in-State tuition and fees 
assessed by the institution after the application of any waiver of, or 
reduction in, tuition and fees and any scholarship, or other Federal, 
State, institutional, or employer-based aid or assistance (other than 
loans and any funds provided under section 401(b) of the Higher 
Education Act of 1965) that is provided directly to the institution and 
specifically designated for the sole purpose of defraying tuition and 
fees. For pursuit of an approved program of education leading to a 
degree on more than a half-time basis at a non-public or foreign IHL, 
effective August 1, 2011, the amount of educational assistance for 
tuition and fees is the lesser of (i) the actual net cost for tuition 
and fees assessed by the institution after application of the same 
waivers, reductions, scholarships, and assistance described above and 
(ii) $17,500 (the cap) for the academic year beginning on August 1, 
2011, or the cap, as adjusted annually, for any subsequent academic 
year beginning on August 1 (the amount of the cap will be increased for 
each subsequent academic year by the percentage increase equal to the 
most recent percentage increase determined under 38 U.S.C. 3015(h) for 
the Montgomery GI Bill-Active Duty program (chapter 30)).
    We would implement these changes effective August 1, 2011, in a new 
section, specifically 38 CFR 21.9641(b)(1) and (b)(2). The lump sum 
payment of educational assistance for tuition and fees is issued 
directly to the IHL for the entire term, quarter, or semester that the 
individual is pursuing the program of education, as provided in 38 CFR 
21.9640(b)(1)(i). Rather than defining terms such as ``Net cost'' and 
``Non-public institution'' in Sec.  21.9641, we propose to define those 
terms in Sec.  21.9506, because they would also be applicable to other 
provisions that are effective after July 31, 2011.
    In Sec.  21.9506, we propose to define ``net cost'' based on how it 
is described in Public Law 111-377, section 102, which specifies ``net 
cost'' as tuition and fees ``after the application of any . . . 
[w]aiver of, or reduction in, tuition and fees'' and any 
``[s]cholarship, or other Federal, State, institutional, or employer-
based aid or assistance (other than loans and any funds provided under 
section 401(b) of the Higher Education Act of 1965).'' We propose to 
also define ``non-public institution'' in Sec.  21.9506, because we use 
this term often throughout the proposed regulations in this rulemaking 
to explain the different set of provisions

[[Page 33674]]

which apply to private institutions. We propose to define ``Non-public 
institution'' as a proprietary institution, as that term is defined in 
38 CFR 21.4200(z), which refers to an educational institution that is 
not a public educational institution, that is located in a State, and 
that is legally authorized to offer a program of education in the State 
where the educational institution is physically located. Additionally, 
because section 3313(c), as amended by section 102(a) of Public Law 
111-377, requires VA to pay the net cost for tuition and fees rather 
than established charges, we would use the phrase ``tuition and fees'' 
throughout the proposed rules.
    Section 102(b) of Public Law 111-377 amended 38 U.S.C. 
3313(c)(1)(B) effective August 1, 2011, to provide for rates of monthly 
housing stipends (or the ``monthly housing allowance'') under the Post-
9/11 GI Bill that are proportional to an individual's rate of pursuit 
of a program of education, as long as the rate of pursuit is more than 
half-time. For individuals pursuing a program of education leading to a 
degree (or program of education at a non-college degree institution, as 
provided by the changes in section 105(b)(3) of Pub. L. 111-377) on 
more than a half-time basis, under the amended law, the monthly housing 
stipend must be determined by multiplying the applicable amount of the 
monthly basic allowance for housing payable under 37 U.S.C. 403 (for a 
member with dependents in pay grade E-5 residing in the military 
housing area that encompasses all or the majority portion of the ZIP 
code area in which is located the IHL at which the individual is 
enrolled) by the lesser of 1.0 or the number of course hours borne by 
the individual in pursuit of the program of education, divided by the 
minimum number of course hours required for full-time pursuit of the 
program of education, rounded to the nearest tenth. For example, if a 
student is enrolled in 18 course hours and the minimum number of course 
hours required for full-time pursuit of the program of education is 12 
course hours, the applicable multiplier would be 1.0. If the student is 
enrolled in 9 course hours under the same full-time criteria in this 
example, the applicable multiplier would be 0.80 (0.75 rounded to the 
nearest tenth). We note that section 3313(c)(1)(B)(i)(I) was further 
amended by Public Law 115-48, section 107, so that the monthly housing 
allowance calculation would use the ZIP code area in which is located 
the campus of the IHL where the individual physically participates in a 
majority of classes rather than the ZIP code area in which is located 
the IHL at which the individual is enrolled. In Sec.  
21.9641(c)(1)(ii), we refer to ``ZIP code'' or ``location code.''
    Section 5003 of Public Law 110-252 authorized VA to pay a monthly 
housing allowance equal to the monthly amount of the Basic Allowance 
for Housing (BAH) payable under 37 U.S.C. 403 for a member with 
dependents in pay grade E-5 residing in the military housing area that 
encompasses all or the majority portion of the ZIP code area in which 
is located the institution of higher education at which the individual 
is enrolled. Public Law 110-252 did not address payment of the monthly 
housing allowance in areas for which there is no ZIP code. For areas 
without a ZIP code and U.S. Territories, the Department of Defense 
(DoD) pays an Overseas Housing Allowance (OHA) based on a location 
code. Therefore, for those individuals attending residence courses at 
locations that are not identified with a ZIP code, but that DoD 
identifies with a locality code, as provided in proposed Sec.  
21.9641(c)(1)(ii), we would pay the monthly housing stipend at the same 
rate as the amount of the basic allowance for housing payable under 37 
U.S.C. 403 for a member with dependents in pay grade E-5 residing 
within the locality code identified by DoD. This payment change would 
be effective on August 1, 2011, which is the date that VA changed its 
interpretation of the statute.
    We note that, under section 105(b) of Public Law 111-377, as 
discussed below, for individuals pursuing a certificate or other non-
college degree at an educational institution other than an IHL on more 
than a half-time basis, the monthly housing stipends are calculated 
similar to the monthly housing stipends for individuals pursuing a 
program of education leading to a degree, discussed above, and are 
limited to the same proportionate percentage applicable to the monthly 
amounts payable to an individual under section 3313(c)(2) through (7), 
which is based on the aggregate amount of active duty service 
completed.
    For individuals pursuing residence training at a foreign IHL on 
more than a half-time basis, under section 3313(c)(1)(B)(ii), the 
monthly housing stipend must be determined by multiplying the national 
average of the monthly amount of the basic allowance for housing 
payable under 37 U.S.C. 403 for a member with dependents in pay grade 
E-5 by the lesser of 1.0 or the number of course hours borne by the 
individual in pursuit of the program of education, divided by the 
minimum number of course hours required for full-time pursuit of the 
program of education, rounded to the nearest tenth.
    For individuals pursuing training solely via distance learning on 
more than a half-time basis, under 38 U.S.C. 3313(c)(1)(B)(iii), 
effective October 1, 2011 (see section 102(c)(2) of Pub. L. 111-377), 
the monthly housing stipend is 50 percent of the rate paid to 
individuals pursuing residence training at a foreign IHL on more than a 
half-time basis. However, for individuals pursuing hybrid training that 
combines distance learning with residence training, effective October 
1, 2011, the monthly housing stipend would be the residence training 
housing stipend without regard to the percentage of the training that 
is conducted through distance learning as compared to residence 
training (i.e., as long as he/she is enrolled in at least one residence 
training class, the individual will receive a monthly housing allowance 
as if all classes in the term are residence training classes. The 
statute does not specifically define how VA should pay monthly housing 
for hybrid training. Because hybrid training contains at least some 
element of residential training, VA proposes to consider hybrid 
training to be in-residence for the purposes of determining the 
appropriate monthly housing stipend rate. This is necessary because 38 
U.S.C. 3313(c)(1)(B)(iii) merely distinguishes between training that is 
pursued solely through distance learning and training that is not 
pursued solely through distance learning. As a result of this 
requirement, an individual pursuing training through a hybrid course is 
not pursuing training solely through distance learning and, therefore, 
is not subject to a housing stipend restricted to 50% of the housing 
stipend payable to an individual pursuing a program of education at a 
foreign IHL on more than a half-time basis.
    Section 3313(c)(1)(B) requires payment of the monthly housing 
stipend in a certain amount equivalent to the DoD amount specified in 
37 U.S.C. 403. Thus, when the DoD rate decreases under section 
403(b)(3), the VA rate should similarly decrease. However, when 
specifying the amount of the monthly housing stipend, section 
3313(c)(1)(B) refers to the monthly amount of the basic allowance for 
housing payable under section 403 without specifying the particular 
paragraph in section 403 on which to rely. While section 403(b)(3), in 
particular, specifies the amount of the monthly housing stipend DoD 
pays servicemembers, and other provisions in

[[Page 33675]]

section 403(b) generally pertain to DoD's establishment of housing 
rates, section 403(b)(6) establishes an exception to those general 
rates applicable to specific servicemembers. The lack of specificity in 
section 3313(c)(1)(B) with respect to a particular paragraph in section 
403 on which to rely when setting the VA monthly housing rate reflects 
some ambiguity that we believe is best resolved by applying ``rate 
protection'' to chapter 33 just as DoD ``grandfathers'' the basic 
allowance for housing for servicemembers who retain uninterrupted 
eligibility under section 403(b)(6). Our longstanding interpretation of 
section 3313(c)(1)(B) has been that all provisions of section 403 are 
potentially applicable in determining the chapter 33 monthly housing 
stipend for VA claimants. And we view section 403(b)(6) as a component 
of the housing-rate structure incorporated by reference in section 
3313(c)(1)(B). Our interpretation of section 3313(c)(1)(B) to apply 
rate protection would result in the best outcome for veterans because 
it would allow them to retain a higher rate of the monthly housing 
stipend. Furthermore, we believe it would be unfair to penalize a 
veteran student by lowering the monthly housing stipend as a result of 
a change that was not initiated by the student and was beyond his or 
her control. Thus, we propose to implement rate protection in Sec.  
21.9641(c)(8) for chapter 33 beneficiaries if they previously received 
the monthly housing stipend for the same type of training at the same 
educational institution and if they have not had more than a six-month 
break in training at the same educational institution.
    We propose to implement these new monthly housing stipend payment 
rates in new Sec.  21.9641(c) because most changes are effective on 
August 1, 2011. In Sec.  21.9641(c), we propose to specify the monthly 
housing allowance payable and the respective effective dates of 
payments for individuals pursuing programs of education at domestic and 
foreign IHLs and non-college degree institutions and for individuals 
pursuing on-the-job or apprenticeship training. However, given that the 
change to the housing amount for distance learning did not take effect 
until October 1, 2011, we propose to specify the different effective 
date for pursuit of training solely via distance learning in paragraph 
(c)(4), by indicating that, after September 30, 2011, an individual who 
is not on active duty and who is pursuing a program of education solely 
through distance learning at a rate of pursuit of greater than 50 
percent, can receive a monthly housing allowance for each month (or 
prorated amount for a partial month) of training during each term, 
quarter, or semester, equal to 50 percent of the housing stipend 
payable to an individual pursuing a program of education at a foreign 
IHL on more than a half-time basis.

e. Section 103--Amounts of Assistance for Programs of Education Leading 
to a Degree Pursued on Active Duty

    Section 103 of Public Law 111-377 amended 38 U.S.C. 3313(e) to 
provide that, effective on or after March 5, 2011, the amount of 
educational assistance payable for pursuit of a program of education 
leading to a degree on more than a half-time basis at a public IHL by 
an individual while the individual is serving on active duty in the 
Armed Forces is the lesser of: (1) the actual net cost for in-State 
tuition and fees assessed by the institution after the application of 
any waiver of, or reduction in, tuition and fees, and any scholarship, 
or other Federal, State, institutional, or employer-based aid or 
assistance (other than loans and any funds provided under section 
401(b) of the Higher Education Act of 1965) that is provided directly 
to the institution and specifically designated for the sole purpose of 
defraying tuition and fees, as stated in 38 U.S.C. 3313(e)(2)(A)(i), or 
(2) that portion of the established charges not covered by military 
tuition assistance under 10 U.S.C. 2007(a) or (b) for which the 
individual has informed VA that he or she wishes to receive payment 
(tuition assistance Top-Up), as stated in 38 U.S.C. 3313(e)(2)(A)(iii). 
For pursuit of a program of education leading to a degree on more than 
a half-time basis at a non-public or foreign IHL by an individual while 
the individual is serving on active duty, the amount of educational 
assistance, as provided in 38 U.S.C. 3313(e)(2)(A)(ii) and (iii), is 
the lesser of: (1) the actual net cost for tuition and fees assessed by 
the institution after application of the same waivers, reductions, 
scholarships, and assistance described above, (2) $17,500 (the cap) for 
the academic year beginning on August 1, 2011, or the cap, as adjusted 
annually, for any subsequent academic year beginning on August 1 (the 
amount of the cap will be increased for each subsequent academic year 
by the percentage increase equal to the most recent percentage increase 
determined under 38 U.S.C. 3015(h) for the Montgomery GI Bill-Active 
Duty program (chapter 30)), or (3) tuition assistance Top-Up. These 
rates specified in amended section 3313(e) are the same as the rates 
for similarly situated individuals not serving on active duty. Although 
tuition assistance Top-Up is not taken into account when determining 
the rates for individuals not serving on active duty, consideration of 
tuition assistance Top-Up for individuals serving on active duty does 
not change the calculation. Because Federal aid (which includes 
military tuition assistance) is first deducted in the calculation of 
the net cost of tuition and fees, the amount of tuition assistance Top-
Up (the institution's charges not covered by military tuition 
assistance) will always be the same as the institution's actual net 
cost for tuition and fees, so the lesser of these two amounts is the 
same amount (actual net cost). Therefore, we propose to state in Sec.  
21.9641(b)(1) and (2) that we would pay the same rate (either actual 
net cost or a capped rate) to individuals who are serving on active 
duty and individuals who are not serving on active duty for pursuit of 
programs of education leading to a degree at public or non-public or 
foreign IHLs.
    Section 103(a)(2)(E) of Public Law 111-377 added section 
3313(e)(2)(C), which requires consideration of an individual 
Servicemember's length of time in service on active duty when 
determining the amount of educational assistance payable to an 
individual serving on active duty for pursuit of a program of education 
at a public, non-public, or foreign IHL. Under section 3313(e)(2)(C), 
the amounts payable are limited to a proportionate percentage based on 
length of time in service, as specified in section 3313(c)(2) through 
(7), of the assistance that would otherwise be payable if a 
Servicemember had completed an aggregate of 36 months of active duty. 
For example, if a Servicemember served an aggregate of at least 12 
months, but less than 18 months, the applicable percentage to be 
applied, as specified in section 3313(c)(5), is 60 percent.
    In addition, section 103(a)(2)(E) adds section 3313(e)(2)(B), which 
provides for a lump sum for the first month of each quarter, semester, 
or term, as applicable, of the program of education pursued by an 
individual on active duty for books, supplies, equipment, and other 
educational costs in an amount equal to $1,000, multiplied by the 
fraction of an academic year the quarter, semester or term represents 
and the applicable percentage as specified in section 3313(c)(2) 
through (7), depending on the individual's length of service.
    We propose to implement the new provisions relating to payment of 
educational assistance for programs pursued while an individual is on 
active duty in new Sec.  21.9640(d) and

[[Page 33676]]

Sec.  21.9641(a), (b), (c)(6) and (d) to make clear the particular 
effective dates that apply to individuals pursuing programs while on 
active duty. In Sec.  21.9640(d)(1), we propose to specify the amounts 
payable for individuals on active duty for programs of education 
beginning on August 1, 2009, and ending on March 4, 2011, before the 
section 103 changes took effect. Consistent with current Sec.  
21.9640(d), we propose to provide that the amount payable will be the 
lowest of (1) the established charges that similarly circumstanced 
nonveterans would be required to pay who are enrolled in the 
individual's program of education; (2) that portion of the established 
charges not covered by military tuition assistance under 10 U.S.C. 
2007(a) or (b) for which the individual has informed VA that he or she 
wishes to receive payment; (3) an amount that is the lesser amount of 
(1) or (2) above, divided by the number of days in the individual's 
quarter, semester, or term to determine the individual's daily rate, 
which is then multiplied by the individual's remaining months and days 
of entitlement to educational assistance.
    We propose to implement the section 103 requirements, requiring, 
beginning March 5, 2011, changes in the amount of educational 
assistance payable for pursuit of programs of education leading to a 
degree on more than a half-time basis at public, non-public and foreign 
IHLs in Sec.  21.9640(d)(2). We propose to specify that the amounts 
payable for individuals on active duty pursuing a program of education 
leading to a degree on a more than half-time basis beginning after 
March 4, 2011, but before August 1, 2011, would be based on the net 
cost for in-State tuition and fees. We propose to implement section 
103(a)(2)(E) relating to the book stipend for the pursuit of an 
educational program while on active duty specifically in Sec.  
21.9641(d)(1)(i)(B).
    In Sec.  21.9641(a)(1), we propose to provide the percentages of 
the maximum amounts payable for the pursuit of approved program of 
education under chapter 33, which is based on the aggregate active duty 
service after September 10, 2001, for training that begins after July 
31, 2011. For clarity, we would include a column with the number of 
days of the aggregate active duty service upon which the applicable 
percentages of the maximum payment amounts are based. We propose to 
also add this column with the number of days to Sec.  21.9640(a)(1). In 
addition, we propose to clarify footnote 3 in Sec.  21.9640(a)(1) 
concerning the requirement in 38 U.S.C. 3311(e) that we pay at the 70 
percent level if an individual meets the service requirements at both 
the 80 and 70 percent level and add a reference to section 3311(e), the 
authority for this rule. We propose to include the same footnote in 
Sec.  21.9641(a)(1).
    In Sec.  21.9641(b)(1), we propose to state that for individuals, 
whether on active duty or not on active duty, pursuing an approved 
program of education leading to a degree at a public institution of 
higher learning, effective after July 31, 2011, the lump sum payment of 
educational assistance is the applicable percentage of the net cost for 
in-state tuition and fees assessed by the institution after the 
application of any waiver of, or reduction in, tuition and fees and any 
scholarship, or other Federal, State, institutional, or employer-based 
aid or assistance (other than loans and any funds provided under 
section 401(b) of the Higher Education Act of 1965) that is provided 
directly to the institution and specifically designated for the sole 
purpose of defraying tuition and fees.
    In 38 CFR 21.9641(b)(2), we propose to state that for individuals, 
whether on active duty or not on active duty, pursuing an approved 
program of education leading to a degree at a non-public or foreign 
institution of higher learning, effective after July 31, 2011, the lump 
sum payment of educational assistance is the lesser of the actual net 
cost for tuition and fees assessed by the institution after application 
of the same waivers and reductions described above; $17,500 (the cap) 
for the academic year beginning on August 1, 2011; or the cap, as 
adjusted annually, for any subsequent academic year beginning on August 
1 (the amount of the cap will be increased for each subsequent academic 
year by the percentage increase equal to the most recent percentage 
increase determined under 38 U.S.C. 3015(h) for the Montgomery GI Bill-
Active Duty program (chapter 30)). Under 38 U.S.C. 3313(h), VA is 
required to pay the amount of educational assistance for tuition and 
fees directly to the educational institution. We propose to implement 
this requirement in Sec.  21.9641(b)(1) and (2) where we state that the 
lump sum payment of educational assistance for tuition and fees is 
issued directly to the IHL for the entire term, quarter, or semester 
that the individual is pursuing the program of education.
    In Sec.  21.9641(c)(6), we propose to state that no monthly housing 
allowance is payable for programs of education pursued for vocational 
flight training at institutions other than IHLs, pursued exclusively by 
correspondence, pursued on a half-time basis or less, and pursued while 
on active duty. This would reflect that the statutory provisions 
applicable to those programs, including 38 U.S.C. 3313(e) with regard 
to programs pursued while on active duty, do not authorize a monthly 
housing allowance.

f. Section 104--Educational Assistance for Programs of Education 
Pursued on a Half-Time Basis or Less

    Section 104 of Public Law 111-377 amended 38 U.S.C. 3313(f), 
effective August 1, 2011, to add a new provision for determining the 
amounts of educational assistance payable to individuals enrolled in 
training on a half-time basis or less and to provide that the new 
provision is applicable to all individuals, whether for educational 
pursuit while on active duty, pursuit of programs of education leading 
to degrees, or pursuit of programs of education other than programs 
leading to degrees (non-degree programs). The new provision provides 
that the amount of assistance payable is the lesser of: (1) the actual 
net cost for in-State tuition and fees assessed by the institution 
after the application of any waiver of, or reduction in, tuition and 
fees and any scholarship, or other Federal, State, institutional, or 
employer-based aid or assistance (other than loans and any funds 
provided under section 401(b) of the Higher Education Act of 1965) that 
is provided directly to the institution and specifically designated for 
the sole purpose of defraying tuition and fees; or (2) the amount of 
such assistance after application of the proportionate-reduction 
provisions found in section 3313(c)(2) through (7).
    We propose to implement section 104 in Sec.  21.9641(b)(1) and (2), 
which would be applicable beginning August 1, 2011. Because section 104 
requires payment for pursuit of programs of education leading to 
degrees and non-degree programs on a half-time basis or less in the 
same amount we are required to pay pursuant to section 102 for pursuit 
of programs of education leading to a degree on more than a half-time 
basis at a public, non-public, or foreign IHL, Sec.  21.9641(b)(1) and 
(2) would be applicable to payments to individuals training in pursuit 
of programs of education leading to degress at less than half time as 
well as individuals training at more than half time. Payments to 
individuals training in pursuit of non-degree programs at less than 
half time are also covered in Sec.  21.9641(b)(1) and (2), as explained 
below discussing the section 105 amendments.
    With regard to active duty members, although the net cost for in-
State tuition and fees would be payable beginning after March 4, 2011, 
to active duty

[[Page 33677]]

members pursuing a program of education leading to a degree on a more 
than half-time basis pursuant to section 103, we would not pay active 
duty members pursuing a program of education on a half-time basis or 
less and active duty members pursuing a non-degree program this new net 
cost rate until August 1, 2011. Until August 1, 2011, we would continue 
to pay active duty members pursuing a program of education on a half-
time basis or less and active duty members pursuing a non-degree 
program the rate we paid all active duty members prior to the change in 
law on August 1, 2011, when section 104 requires payment of the new 
rate for active duty members pursuing a program of education on a half-
time basis or less and active duty members pursuing a non-degree 
program. We propose to specify the continuance of the rate we paid all 
active duty members for active duty members pursuing a program of 
education leading to a degree on a half-time basis or less for the 
period from March 5, 2011, through August 1, 2011, in Sec.  
21.9640(d)(3). We propose to specify the continuance of the rate we 
paid all active duty members for active duty members pursuing a non-
degree program for the period from March 5, 2011 through August 1, 
2011, in Sec.  21.9640(d)(4).

g. Section 105--Educational Assistance for Programs of Education Other 
Than Programs of Education Leading to a Degree

    Section 105 of Public Law 111-377 amended section 3313(b) to remove 
language that limited the provision of educational assistance under the 
Post-9/11 GI Bill to programs of education pursued at IHLs. This change 
allows pursuit of non-college degree programs ``approved for purposes 
of chapter 30.'' See 38 U.S.C. 3313(b). Section 105 also added a new 38 
U.S.C. 3313(g) to allow payment of educational assistance for approved 
programs offered at educational institutions other than IHLs. In 
Sec. Sec.  21.9715, 21.9735, 21.9740, 21.9750, and 21.9765, we propose 
to amend the existing regulations to authorize pursuit of non-college 
degree programs at non-IHLs and remove language that limits pursuit of 
non-college degree programs to only those offered by an IHL. In these 
sections, we propose to remove the term ``institution of higher 
learning'' and add, in its place, the term ``educational institution.''
    Prior to the passage of Public Law 111-377, students pursuing non-
college degree programs at IHLs (on a greater-than-half-time basis) 
were entitled to payment of the established charges for tuition and 
fees (not to exceed the maximum amount of the established charges for 
in-State students at public institutions), a monthly housing stipend, 
and a books and supplies stipend. Individuals who were entitled to the 
100-percent level of such payments were also eligible to participate in 
the Yellow Ribbon program if the schools they attended participated in 
this program. With regard to the payment of educational assistance, 
prior to the passage of Public Law 111-377, there was no distinction 
between an individual pursuing a degree program at an IHL and an 
individual pursuing a non-college degree program at an IHL.
    Neither section 3313(c) nor section 3313(g) addresses the level of 
payment of educational assistance for pursuit of a non-college degree 
program at an IHL on a greater than half-time basis. In general, we 
view the purpose of the amendments made by Public Law 111-377 as 
expanding the universe of programs for which educational assistance may 
be paid under the Post-9/11 GI Bill (as it did by permitting payment 
for on-the-job and flight training programs at non-IHL schools, for 
which payment was previously not permitted). Therefore, based on our 
interpretation that Public Law 111-377 is meant to expand the universe 
of programs available, we construe section 105 in a way that does not 
stop previously authorized payment of educational assistance to 
individuals who may have already made substantial investments, in terms 
of time and effort, in pursuit of non-college degrees at IHLs. Also, 
and again based on our view of Public Law 111-377 as expanding the 
availability of educational assistance, we construe section 105 in a 
manner that does not limit a student's choice of the type of school he 
or she may wish to attend. Therefore, we conclude that VA retains the 
authority to pay educational assistance for the pursuit of non-college 
degree programs at IHLs in the same way we had been paying educational 
assistance for the pursuit of non-college degree programs at IHLs prior 
to the passage of Public Law 111-377. Because we had been paying 
educational assistance for the pursuit of non-college degree programs 
at IHLs in the same manner as we had been paying educational assistance 
for the pursuit of degree programs at IHLs prior to the passage of 
Public Law 111-377, we propose to continue to pay individuals pursuing 
a non-college degree program at an IHL in the same manner as we pay 
individuals pursuing a degree program at an IHL. Therefore, Sec.  
21.9641(b)(1) and (b)(2), specifying the amounts of tuition and fees 
payable beginning August 1, 2011, would be applicable to payments for 
pursuit of all programs of education, whether degree or non-college 
degree.
    New 38 U.S.C. 3313(g)(3)(A), as added by section 105 of Public Law 
111-377, provides, effective October 1, 2011, that the amount of 
educational assistance to be paid to an individual enrolled in a 
certificate or other non-college degree program at an educational 
institution other than an IHL on more than a half-time basis is the 
lesser of the actual net cost of in-State tuition and fees (less any 
waiver of, or reduction in, tuition and fees and any amount provided 
directly to the institution on behalf of an eligible student for the 
sole purpose of defraying tuition and fees), or $17,500 (the cap) for 
the academic year beginning on August 1, 2011 (or the cap as adjusted 
annually for any subsequent academic year beginning on August 1). We 
propose to implement this payment requirement in Sec.  21.9641(b)(3) by 
providing that VA will make a lump sum payment directly to the 
institution in an amount of educational assistance payable for an 
individual enrolled at more than half-time, in a certificate or non-
college degree program at an educational institution other than an IHL.
    New section 3313(g)(3)(A) also provides, effective October 1, 2011, 
that individuals enrolled in a certificate or other non-college degree 
program at an educational institution on more than a half-time basis 
are eligible for a monthly housing stipend and a monthly stipend for 
books, supplies, and equipment. The amount of the monthly housing 
stipend is calculated in the same fashion as it is for individuals 
pursuing programs of education leading to a degree at IHLs. We propose 
to implement this payment requirement in Sec.  21.9641(c)(3). The 
amount of the monthly stipend for books, supplies, and equipment is $83 
each month, prorated for a partial month. We propose to implement this 
payment requirement in Sec.  21.9641(d)(2). This amount for books, 
supplies, and equipment is further limited to a proportionate 
percentage applicable to the monthly amounts payable to an individual 
under section 3313(c)(2) through (7), which is based on the aggregate 
amount of active duty service completed. We proposed to implement this 
payment requirement in generally applicable Sec.  21.9641(a), which 
provides the applicable percentage of the maximum amounts payable.
    Section 3313(g)(3)(B), as added by Public Law 111-377, section 
105(b), provides for a monthly housing stipend and a stipend for books, 
supplies and

[[Page 33678]]

equipment for individuals pursuing a full-time program of 
apprenticeship or other on-the-job training. Paragraph (B) requires, 
effective October 1, 2011, the amount of the monthly housing stipend to 
be 100 percent of the applicable amount of the monthly basic allowance 
for housing payable under 37 U.S.C. 403 for each month of the first 
six-month period of pursuit of the program, 80 percent of the 
applicable amount of the monthly basic allowance for housing payable 
under 37 U.S.C. 403 for each month of the second six-month period of 
pursuit, 60 percent of the applicable amount of the monthly basic 
allowance for housing payable under 37 U.S.C. 403 for each month of the 
third six-month period, 40 percent of the applicable amount of the 
monthly basic allowance for housing payable under 37 U.S.C. 403 for 
each month of the fourth six-month period, and 20 percent of the 
applicable amount of the monthly basic allowance for housing payable 
under 37 U.S.C. 403 for each month of pursuit of the program for any 
subsequent months of training. Paragraph (B) requires, effective 
October 1, 2011, the amount of the monthly stipend for books, supplies, 
and equipment to be $83 for each month of training, or a prorated 
amount for a partial month of training.
    The amounts of the monthly housing stipend and stipend for books, 
supplies, and equipment for individuals entitled to educational 
assistance by reason of section 3311(b)(3) through (8) must be further 
limited to the same proportionate percentage applicable to the monthly 
amounts payable to an individual under section 3313(c)(2) through (7), 
which is based on the aggregate amount of active duty service 
completed. The amounts of these monthly stipends must be reduced even 
further if a individual fails to complete 120 hours of training in any 
month. Pursuant to new 38 U.S.C. 3313(g)(3)(B)(iv), the reduced amount 
must be determined by multiplying the otherwise payable amount for that 
month by the number of hours worked rounded to the nearest 8 hours, and 
then by dividing that amount by 120, and lastly rounding that final 
amount to the nearest hundred. For example, with regard to the monthly 
housing stipend, if a student completes 96 hours of training for a 
month in which he or she is eligible to otherwise receive a $1,000 
monthly housing stipend, the student must receive $800 (which is $1,000 
multiplied by 96 hours, and divided by 120). We propose to implement 
the monthly housing allowance payment requirement for individuals 
pursuing a full-time program of apprenticeship or other on-the-job 
training in Sec.  21.9641(c)(5), and the book stipend payment 
requirement in Sec.  21.9641(d)(2).
    New 38 U.S.C. 3313(g) allows payment of educational assistance for 
approved programs other than programs leading to a degree offered at 
educational institutions other than IHLs, which would include 
apprenticeships and on-the-job training programs. Therefore, we propose 
to provide in newly added Sec.  21.9626(c), the beginning dates of an 
award or increased award of educational assistance for approved 
programs, including apprenticeships and on-the-job training programs, 
but not for a licensing or certification test, a national test for 
admission, or a national test for credit.
    Section 3313(g)(3)(C) and (D), as added by Public Law 111-377, 
section 105(b), provides, effective October 1, 2011, that the amount of 
educational assistance to be paid to an individual enrolled in a 
program of flight training or of training pursued exclusively by 
correspondence, respectively, at either an IHL or an institution other 
than an IHL on more than a half-time basis is the lesser of the actual 
net cost of tuition (in-State tuition for flight training) and fees 
(less any waiver of, or reduction in, tuition and fees and any amount 
provided directly to the institution on behalf of an eligible student 
for the sole purpose of defraying tuition and fees) or $10,000 (the 
cap) for flight training, or $8,500 (the cap) for training pursued 
exclusively by correspondence, for the academic year beginning August 
1, 2011 (or the respective cap as adjusted annually for any subsequent 
academic year beginning on August 1). This amount is further limited to 
the same proportionate percentage applicable to the monthly amounts 
payable to an individual under section 3313(c)(2) through (7), which is 
based on the aggregate amount of active duty service completed.
    We propose to specify in new Sec.  21.9641(b)(5) that, effective 
after September 30, 2011, a lump sum of this amount of assistance would 
be paid directly to the institution on behalf of the individual 
enrolled in a flight training program at any institution, regardless of 
whether it is an IHL. We propose to require that an individual complete 
a certification for training before VA would issue payment for the 
flight training because section 3313(g)(4)(C)(ii) adds this 
requirement. We propose to specify in new Sec.  21.9641(b)(6) that, 
effective after September 30, 2011, assistance would be paid quarterly 
on a pro rata basis for lessons completed directly to the educational 
institution on behalf of the individual enrolled in a program of 
training pursued exclusively by correspondence at any institution, 
regardless of whether it is an IHL, since this frequency of payment is 
required by section 3313(g)(4)(D).
    Section 3313(g)(5) requires that we charge entitlement for 
individuals pursuing non-college degee programs at institutions other 
than IHLs based on the amount paid as a percentage of the otherwise 
applicable annual rate. The rules regarding the charge to entitlement 
for individuals pursuing certificate or other non-degree programs at 
educational institutions would be located in Sec.  21.9561(b). In Sec.  
21.9561(b)(1), we propose to provide that when VA pays tuition and fees 
to the non-college degree institution, the individual would be charged 
entitlement equal to the numbers of months and the corresponding 
fraction measured in days, determined by dividing the total amount paid 
by the amount equal to 1/12th of the applicable amount for the academic 
year, which is $17,500 (the cap) for the academic year beginning on 
August 1, 2011 (or the cap as adjusted annually for any subsequent 
academic year beginning on August 1). In Sec.  21.9561(b)(2), we 
propose to provide that for any period VA does not pay net costs to the 
non-college degree institution, but pays a monthly housing allowance or 
an increase (``kicker'') to the individual, that individual will be 
charged a percentage of a day equal to the individual's rate of pursuit 
for each day of the certified enrollment period that the individual 
received a monthly housing allowance or an increase (``kicker''). In 
Sec.  21.9561(b)(3), we propose to provide that for any period VA does 
not pay net costs to the non-college degree institution, or a monthly 
housing allowance or an increase (``kicker'') to the individual, but 
makes a lump sum payment to the individual for books, supplies, 
equipment, and other educational costs, VA will make an entitlement 
charge of 1 day for every $41.67 paid, with any remaining amount 
rounded to the nearest amount evenly divisible by $41.67.
    Although section 3313(g)(5) sets out the entitlement charges for 
individuals pursuing non-college degree programs at institutions other 
than IHLs, it omits the entitlement charges for apprenticeships and on-
the-job training, flight training, and correspondence training. In the 
absence of guidance on how to charge entitlement for individuals 
pursuing flight and correspondence training, we propose to apply the 
same rules provided in section 3313(g)(5) because tuition is similarly 
charged for individuals pursuing certificate or other

[[Page 33679]]

non-degree programs at institutions other than IHLs and individuals 
pursuing flight and correspondence training. Specifically, in Sec.  
21.9561(d) and Sec.  21.9561(e), we propose to provide that an 
individual will be charged entitlement equal to the number of months, 
and fraction thereof measured in days, determined by dividing the total 
amount paid by 1/12th of the amount applicable in the academic year in 
which payment is made for flight training and correspondence training 
occurring after July 31, 2011.
    However, because we do not pay tuition and fees for individuals 
pursuing apprenticeships and on-the-job training under chapter 33, we 
cannot apply the entitlement charges rules in section 3313(g)(5) to 
individuals pursuing apprenticeships and on-the-job training under 
chapter 33. Instead, we propose to charge entitlement for training 
assistance allowance under 38 U.S.C. 3687(e) for individuals pursuing 
apprenticeships and on-the-job training under chapter 33. We are aware 
that the applicable statutes might be understood to preclude charging 
entitlement under section 3687(e) for individuals pursuing 
apprenticeships and on-the-job training under chapter 33. Section 
3323(a)(1) makes 38 U.S.C. 3034(a)(1) applicable to the provision of 
educational assistance under chapter 33, and 38 U.S.C. 3034(a)(1) makes 
most of the provisions of chapter 36 applicable to the provision of 
educational assistance under chapter 30, with an explicit exception of 
section 3687. It arguably follows from section 3034 that we may not 
apply section 3687 to the provision of educational assistance under 
chapter 33. However, VA believes that the relevant statutes are best 
understood to permit application of section 3687(e) to the provision of 
educational assistance under chapter 33. Congress has consistently 
either specified the methodology for computing charges against 
entitlement or expressly stated that there will be no charge to 
entitlement (see, e.g., 38 U.S.C. 3314(d), 3318(e)). Its failure to do 
either section 3323 suggests that there is a gap in the statute VA must 
fill. We believe that the best interpretation of the statute is that 
there should be a charge against entitlement. Section 3312(a) of title 
38, U.S.C., makes clear that educational assistance is limited to 36 
months, and, absent an express provision that benefits are not charged 
against entitlement, providing benefits without any charge to 
entitlement would appear to be inconsistent with the overall statutory 
scheme. We believe it is more likely Congress intended that there be a 
charge against entitlement, but failed to specify the methodology. 
Therefore, it is reasonable to apply the entitlement charges rules in 
section 3687(e) to individuals pursuing apprenticeships and on-the-job 
training under chapter 33.
    According to section 3687(e), an individual is charged entitlement 
for each month an individual is paid a training assistance allowance at 
a rate equal to the ratio of the training assistance allowance for the 
month to the monthly educational assistance allowance payable for full-
time enrollment in an educational institution. For the first six months 
of training, we propose to pay a monthly training assistance allowance 
to individuals pursuing apprenticeships and on-the-job training under 
38 U.S.C. 3313(g)(3)(B) at the same rate as the monthly amount of the 
basic allowance for housing payable under 37 U.S.C. 403, which is the 
same as the rate of the monthly educational assistance allowance 
payable for full-time enrollment in an educational institution; for the 
second six months of training, we propose to pay 80% of that amount; 
for the third six months of training we pay 60% of that amount; for the 
fourth six months of training, we propose to pay 40% of that amount; 
and for any month after the first 24 months of training, we propose to 
pay 20% of that amount. Accordingly, for the first six months of 
training, the ratio of the training assistance allowance to the 
educational assistance allowances would be one month, and for 
subsequent periods of training, the ratio would be the applicable 
portion of a month. We propose to provide these rules for entitlement 
charges for apprenticeships and on-the-job training occurring after 
July 31, 2011, in new Sec.  21.9561(c).
    In Sec.  21.9641(e), we propose to provide notice that VA will 
publish the maximum amount of tuition and fees payable each academic 
year in the ``Notices'' section of the Federal Register and on the GI 
Bill website. We propose to add this notice provision to provide the 
public with efficient notification of the changes to the maximum amount 
of tuition and fees.
    We propose to use the term ``educational institution'' in 
Sec. Sec.  21.9601, 21.9626, 21.9636 and 21.9681. We propose to also 
define in Sec.  21.9505 and Sec.  21.9506 the term ``educational 
institution'' as having the same meaning as the term ``institution of 
higher learning,'' as that term is defined in Sec.  21.4200(h). Prior 
to August 1, 2011, we referred to this type of institution solely as an 
institution of higher learning whereas now we would use that term and 
``educational institution'' interchangeably.
    Prior to the passage of Public Law 111-377, payment of Post-9/11 GI 
Bill benefits for individuals to pursue training at non-college degree 
programs was not authorized, although payment of educational benefits 
may have been authorized under other benefit programs, such as the 
Montgomery GI Bill program. Therefore, in 38 CFR 21.9590(d), we decided 
to pay for non-college degree programs on behalf of individuals who had 
relinquished another benefit to receive Post-9/11 GI Bill benefits, at 
the rate payable under the relinquished benefit. Because Public Law 
111-377 authorized payment of training pursued at non-college degree 
programs after July 31, 2011, a provision such as Sec.  21.9590(d) is 
not necessary for training pursued after July 31, 2011. Therefore, we 
propose to omit a provision, similar to Sec.  21.9590(d), permitting 
payment for pursuit of non-college degrees at other than IHLs on behalf 
of individuals who had relinquished another benefit to receive Post 9/
11 GI Bill benefits, in new Sec.  21.9591, which covers approval of 
programs of education for training that begins on or after August 1, 
2011, similar to Sec.  21.9590 for approval of programs for training 
that occurs prior to August 1, 2011.

h. Section 106--Determination of Monthly Housing Stipend Payments for 
Academic Years

    Section 106 of Public Law 111-377 added 38 U.S.C. 3313(i), which 
requires, effective August 1, 2011, that any monthly housing stipend 
payable under section 3313 during the academic year beginning on August 
1 of each calendar year must be determined using rates for basic 
allowances for housing payable under 37 U.S.C. 403, in effect as of 
January 1 of such calendar year. We propose to add this requirement in 
Sec.  21.9641(c)(7).
    VA has been paying the monthly housing stipend to individuals 
attending residence courses in locations not identified with a ZIP code 
as if they were attending foreign institutions. However, this has 
resulted in inequities in payment. For the reasons we provided in the 
discussion of section 102(b) above, we propose to state in Sec.  
21.9641(c)(1)(ii) that, on or after August 1, 2012, we will use the ZIP 
code or locality code, whichever may be applicable, for all, or a 
majority, of the area of the institution in which the individual is 
enrolled when determining the monthly housing

[[Page 33680]]

allowance payable for residence training at an IHL located in a state.

i. Section 107--Availability of Assistance for Licensure and 
Certification Tests

    Section 107 of Public Law 111-377 amended 38 U.S.C. 3315, effective 
August 1, 2011, by removing the one-time limit on the use of Post-9/11 
GI Bill benefits to pay for a single licensure or certification test. 
Under current section 3315, an individual can receive payment for an 
unlimited number of licensure and certification tests, however, the 
amount payable cannot exceed the least of: $2,000; the amount charged 
for the test; or the amount of educational assistance corresponding to 
the remaining entitlement at the time of payment for the test. We 
propose to provide, in Sec.  21.9667, for reimbursement for any number 
of licensing and certification tests taken after July 31, 2011, limited 
to the least of the licensing or certification test fee, $2,000, or the 
amount equal to the amount of entitlement to educational assistance 
available at the time of payment for the test.
    In proposed Sec.  21.9626(a)(2), we propose to include the same 
requirements included in Sec.  21.9625--that VA will award educational 
assistance for the cost of a licensing or certification test only when 
the eligible individual takes such test on or after August 1, 2009, 
while the test is approved under 38 U.S.C. chapter 36, while the 
individual is eligible for such educational assistance, and if the 
claim for reimbursement of the cost of the test is received within 1 
year of the test. We would include these same requirements in Sec.  
21.9626 because they continue to be applicable after July 31, 2011, 
but, because they are applicable beginning on or after August 1, 2009, 
we propose to include this beginning date requirement in Sec.  
21.9626(a)(2).
    Section 107 also removed the prohibition on charging entitlement 
for payment for a test. It requires that the corresponding charge to 
entitlement for payment for each licensing or certification test taken 
on or after August 1, 2011, be made at the rate of one month (rounded 
to the nearest whole month) for each $1,460 paid for the academic year 
beginning on August 1, 2011, as increased under 38 U.S.C. 3015(h) each 
academic year beginning on each subsequent August 1. To the extent the 
calculation results in a rate of less than one-half month, we interpret 
the statute as requiring an entitlement charge of one month, i.e., a 
test payment always results in an entitlement charge under section 
3315(c).
    In Sec.  21.9561(f)(1) and (f)(2)(i), we propose to explain that we 
would charge entitlement for each payment of educational assistance 
made for an approved licensing or certification test taken on or after 
August 1, 2011, and prior to August 1, 2018, by dividing the total 
amount of the payment by $1,460 (or as increased under 38 U.S.C. 
3015(h) for any subsequent academic year beginning on August 1) for the 
academic year beginning August 1, 2011, or the maximum amount of $2,000 
for a licensing or certification test, and rounding the result to the 
nearest whole month. The charge to entitlement would be at least one 
month. For example, if an individual receives educational assistance 
during the academic year beginning August 1, 2011, for taking an 
approved licensure or certification test that costs $500, VA proposes 
to make a charge against the individual's entitlement of 1 month ($500/
$1460 = 0.34; because there is a minimum charge of one month, this 
would be rounded to one month).
    In 2017, section 108 of Public Law 115-48 further changed the 
requirements for calculating entitlement charges for licensure and 
certification tests under the Post 9/11 GI Bill for tests taken on or 
after August 1, 2018. Section 3315, as amended by section 108 of Public 
Law 115-48, requires that, for tests taken on or after August 1, 2018, 
entitlement charges be pro-rated based on the actual amount of the fee 
charged for the test relative to the rate that is payable for one 
month. In order to pro-rate the fee charged relative to the rate 
payable for one month, VA will count each month as 30 days. We propose 
to calculate the pro-rated charge to entitlement for tests taken on or 
after August 1, 2018, in Sec.  21.9561(f)(2)(ii) by dividing the total 
amount of the payment by $1,460, as increased under 38 U.S.C. 3015(h) 
for the applicable academic years subsequent to August 1, 2011, 
beginning on August 1, multiplying by 30 and rounding the result to the 
nearest whole day, instead of to the nearest whole month. The minimum 
charge to entitlement would be at least one day, since it is the 
minimum part of a month.

j. Section 108--National Tests

    Section 108 of Public Law 111-377 added 38 U.S.C. 3315A to permit 
individuals to use Post-9/11 GI Bill benefits to pay a limited amount 
for national tests for admission to IHLs and national tests providing 
an opportunity for course credit at IHLs taken on or after August 1, 
2011. Section 3315A imposes a corresponding charge to entitlement for 
each test, similar to the charge to entitlement imposed with respect to 
payment for licensing and certification tests. We propose to implement 
the requirements of this section in, among other regulations, 
Sec. Sec.  21.9626(a)(3), 21.9668, and 21.9681.
    In proposed Sec.  21.9626(a)(3), we propose to provide that VA will 
award educational assistance for the cost of a national test for 
admission or a national test for credit for an individual who takes 
such test after July 31, 2011, under the same conditions under which we 
pay for the cost of licensing and certification tests. We propose to 
reword one of those conditions to more clearly state that VA will pay 
for the cost of a test only if a claim for reimbursement is submitted 
within 1 year of taking the test. In Sec.  21.9668, we propose to 
specify that the reimbursement an individual could receive for taking a 
national test for admission or a national test for credit is the lesser 
of (a) the fee charged for the test or (b) the amount equal to the 
number of whole months of remaining entitlement available to the 
individual. We propose to also specify that of the fee charged for the 
test, we will not reimburse for any optional costs that are not 
required for the testing process. In Sec.  21.9681(b)(1), we propose to 
provide that the certification requirements by educational institutions 
for release of payments do not apply to national tests for admission 
and national tests for credit.
    Because section 108 of Public Law 111-377 amended 38 U.S.C. 3315A 
to add two additional test types, we propose to add new paragraphs (mm) 
and (nn) to Sec.  21.4200, which defines terms that apply to subpart P 
of 38 CFR part 21, containing the regulations for the Post 9/11 GI Bill 
program, to define the terms ``national test for admission'' and 
``national test for credit.'' As stated in proposed Sec.  
21.9626(a)(3), these tests must be specifically approved for the GI 
Bill under the provisions in 38 U.S.C. chapter 36, which is implemented 
by provisions currently found in Sec.  21.4268. VA has a list of tests 
that have applied and been approved for reimbursement, and we would 
reference that list in proposed Sec.  21.4200(mm) and (nn). The list is 
maintained and can be accessed by visiting the website: http://inquiry.vba.va.gov/weamspub/buildSearchNE.do. If the test has not yet 
been approved or is not contained on this list, the organization 
administering the test must contact VA about having it approved.
    In Sec.  21.9561(f), we propose to charge entitlement for each 
payment of educational assistance made for an approved national test 
taken on or after August 1, 2011, and prior to August 1,

[[Page 33681]]

2018, in the same manner as we charge entitlement for licensure and 
certification tests, except there would not be a $2,000 limit per cost 
of test as there would be with respect to licensure and certification 
tests.
    We propose to add new Sec.  21.9591 to explain the types of 
programs or courses an individual can pursue on or after August 1, 
2011, to be eligible for educational assistance under the Post 9/11 GI 
Bill. We propose to include in Sec.  21.9591(a)(4) national tests for 
admission and national tests for credit as types of programs an 
individual can pursue on or after August 1, 2011, and receive 
educational assistance under the Post 9/11 GI Bill. We propose to state 
in Sec.  21.9591(b)(4) that VA would approve a program of education 
under chapter 33, except for a program consisting of a licensing or 
certification test designed to help the individual maintain employment 
in a vocation or profession, or for a program consisting of a national 
test for admission or a national test for credit, only if the 
individual is not already qualified for the objective of the program.
    In new Sec.  21.9601(b), we propose to explain that overcharges or 
excessive fees by organizations or entities offering national tests may 
result in disapproval of tests.
    As provided in current Sec.  21.9710, an individual's educational 
assistance is dependent upon his or her pursuit of a program of 
education, except for an individual pursuing tuition assistance Top-Up 
or reimbursement for taking an approved licensing or certification 
test. We propose to revise Sec.  21.9710 to clarify that payment of 
educational assistance is not contingent upon an individual's pursuit 
when reimbursement is for a national test. This exception is in 
addition to the current exceptions of an individual's pursuit of 
tuition assistance Top-Up and reimbursement for taking an approved 
licensing or certification test. Furthermore, in proposed Sec.  
21.9721(a), we propose to provide that VA does not require 
organizations or entities offering national tests for admission, 
national tests for credit, or licensing or certification tests to 
certify that the individual took the test.

k. Section 109--Continuation of Entitlement to Additional Educational 
Assistance for Critical Skills or Specialty

    Section 109 of Public Law 111-377 added 38 U.S.C. 3316(c) and (d). 
Section 3316(c) allows individuals entitled to receive an increased 
amount of educational assistance for critical skills or specialties 
(``recruitment or retention kickers'' or ``kickers''), pursuant to 38 
U.S.C. 3015(d) or 10 U.S.C. 16131(i), from the Department of Defense 
(DOD) or the Department of Homeland Security (DHS) under the MGIB or 
the Montgomery GI Bill--Selected Reserve to remain entitled to that 
increased assistance if the individual has elected to receive Post-9/11 
GI Bill benefits in lieu of either the MGIB or the Montgomery GI Bill--
Selected Reserve. Under section 3316(c), payments of these kickers are 
now made on a monthly basis, as opposed to a lump sum for the entire 
term, quarter, or semester. Under section 3316(c), the amount payable 
on a monthly basis must be determined by multiplying the monthly amount 
of the kicker by the individual's rate of pursuit, rounded to the 
nearest multiple of 10.
    In Sec.  21.9650, which provides for continued entitlement to the 
increased ``kicker'' amount for critical skills or specialties if the 
individual has elected to receive Post-9/11 GI Bill benefits in lieu of 
either the MGIB or the Montgomery GI Bill--Selected Reserve, we propose 
to amend Sec.  21.9650(a)(2) to add that the chapter 33 kicker amount 
paid to the individual as part of the monthly housing allowance if the 
individual is entitled to a monthly housing allowance for the period 
from August 1, 2009, to July 31, 2011, will be paid under Sec.  
21.9640(b), and for the period after July 31, 2011, will be paid under 
Sec.  21.9641(c). Additionally, we propose to amend Sec.  21.9650(b)(2) 
and (c)(2) to include separate paragraphs applicable to payment for 
training during different time periods, and amend Sec.  21.9650(b)(3) 
and (c)(3) to indicate that, after July 31, 2011, payment of the kicker 
would be made on a monthly basis.
    Additionally, we note that section 109 does not require changes to 
the calculation of payment amounts and the timing of payments for the 
continued payment of kickers under section 3021 (supplemental 
educational assistance). The only change we would make to Sec.  21.9655 
would be that any increase that is payable for supplemental educational 
assistance will only be paid to the individual as an increase to the 
monthly housing allowance if the individual is entitled to receive a 
monthly housing allowance under Sec.  21.9640(b)(1)(ii), (b)(2)(ii), or 
Sec.  21.9641(c) for that term, quarter, or semester. We are removing 
the authority citation to 38 U.S.C. 3316 that appears after paragraph 
(a) of Sec.  21.9655 and including it at the end of the section. We 
also note that 38 U.S.C. 3316(d), as added by section 109(b)(1) of 
Public Law 111-377, directs DOD or DHS, as applicable, to pay for 
kickers from funds deposited in the DOD Education Benefits Fund or from 
appropriations available to the DHS, as appropriate. Because this 
change is an administrative issue for resolution exclusively by the DOD 
and the DHS, we would not make any changes to VA regulations to 
implement section 109(b)(1).

l. Section 110--Transfer of Unused Education Benefits

    Section 110 of Public Law 111-377 amended 38 U.S.C. 3319, effective 
August 1, 2011, to permit certain members of the U.S. Public Health 
Service and the National Oceanic and Atmospheric Administration, in 
addition to members of the Armed Forces, to transfer Post-9/11 GI Bill 
benefits to their dependents following completion of minimum duty 
requirements. It also clarified that the purpose of permitting this 
transfer is to promote recruitment and retention, and that the 
individual Secretary concerned (e.g., Secretary of the Army, Secretary 
of the Navy, Secretary of Health and Human Services, and others) may 
exercise the authority to allow such transfer when authorized by the 
Secretary of Defense in the national security interests of the United 
States.
    We propose to amend the introductory text of Sec.  21.9570 to 
indicate that the regulation would apply for training that occurs 
before August 1, 2011, and add Sec.  21.9571, to apply to training that 
occurs after July 31, 2011, which would mostly replicate Sec.  21.9570, 
but we propose to change ``Armed Forces'' and ``active duty service'' 
to ``Uniformed Services'' and ``service as a member of the Uniformed 
Services,'' respectively, each place they appear, and remove 
``military'' each time it appears with reference to ``department'' to 
permit individuals who train with the U.S. Public Health Service and 
the National Oceanic and Atmospheric Administration after July 31, 
2011, to transfer Post-9/11 GI Bill benefits to their dependents. 
Additionally, in Sec.  21.9571(g)(1), we propose to clarify that any 
modification of a transfer of entitlement designation, including 
modification of a beginning date under Sec.  21.9571(d)(1)(iii), will 
only be effective on or after the date that the modification was 
submitted, which would be consistent with Sec.  21.9571(g)(2).

m. Section 111--Bar to Duplication of Certain Educational Assistance 
Benefits

    Section 111 of Public Law 111-377 amended 38 U.S.C. 3322 by adding 
four new paragraphs to bar concurrent receipt of various types of VA 
educational assistance, effective August

[[Page 33682]]

1, 2011. Section 111(a) added section 3322(e) to require an election 
between educational assistance under 38 U.S.C. 3311(b)(9) (Fry 
Scholarship program) and under 38 U.S.C. 3319 (Post-9/11 GI Bill 
benefits based on transferred entitlement). Section 111(b) added 
section 3322(f) to restrict VA from paying dependency and indemnity 
compensation or pension based on the death of a parent to an eligible 
child, or increased rates or additional amounts of compensation, 
dependency and indemnity compensation, or pension based on the child, 
on the one hand, and educational assistance under the Fry Scholarship 
on the other hand. Section 111(c) added section 3322(g) to require a 
spouse or child to elect to receive transferred Post-9/11 GI Bill 
benefits under 38 U.S.C. 3319 from only one individual at a time if 
entitled to receive transferred benefits from more than one individual 
for the same time period.
    Section 111(d) added section 3322(h) to require an individual to 
elect one program under which to establish eligibility for educational 
assistance even if the individual may be able to establish eligibility 
under 38 U.S.C. chapters 30, 32, or 33 and 10 U.S.C. chapters 1606 or 
1607 based on a single period of active-duty service. New section 
3322(h) also requires a child of a member of the Armed Forces who dies 
in the line of duty on or after September 11, 2001, while serving on 
active duty, to elect to establish eligibility for educational 
assistance under either the Fry Scholarship or under chapter 35 even if 
the child is eligible for educational assistance based on the parent's 
death under both programs. New paragraphs (e), (g), and (h) of section 
3322 allow VA to determine the form and manner of the required 
elections.
    To implement these requirements, we propose to modify Sec.  21.9690 
to indicate that the prohibitions on non-duplication of benefits in 
Sec.  21.9690 are effective during the period beginning August 1, 2009, 
and ending July 31, 2011. We propose to also add provisions in proposed 
Sec.  21.9691, in which we would provide that, after July 31, 2011, an 
eligible individual is barred from receiving educational assistance 
under 38 U.S.C. chapter 33 concurrently with various types of 
educational assistance, see proposed Sec.  21.9691(a) (see discussion 
of section 202 below regarding this provision); that the payment of 
educational assistance is prohibited to the eligible individual for 
courses that are paid in full or in part by the Armed Forces while the 
individual is on active duty service, or for a course or courses that 
are paid under the Government Employees Training Act, see proposed 
Sec.  21.9691(b); that an individual entitled to educational assistance 
under both the Fry Scholarship and transferred benefits may not receive 
educational assistance under both provisions concurrently, see proposed 
Sec.  21.9691(c); that an individual may not receive transferred 
benefits from more than one individual concurrently, see proposed Sec.  
21.9691(d); that an individual's receipt of educational assistance 
under the Fry Scholarship is a bar to subsequent payment of both (i) 
dependency and indemnity compensation or death pension to the 
individual once they attain the age of 18 years, or (ii) an increased 
rate or additional amount of compensation, dependency and indemnity 
compensation, or pension paid on account of the individual, see 
proposed Sec.  21.9691(e); that an individual who is eligible under 38 
U.S.C. chapter 30, 32, or 33 and 10 U.S.C. chapter 1606 or 1607 must 
elect under which authority such service is to be credited; and that a 
child of a member of the Armed Forces who, after September 10, 2001, 
dies in the line of duty while serving on active duty, who is eligible 
for educational assistance under the Fry Scholarship or 38 U.S.C. 
chapter 35 based on the parent's death may not receive benefits under 
both provisions, see proposed Sec.  21.9691(h).
    We propose to implement section 3322(h) by stating in Sec.  
21.9691(h)(1)(ii) that an individual may not request that portions of a 
single period of service be used to establish eligibility under more 
than one benefit program. In other words, we propose to prohibit an 
individual from splitting a single period of service into separate 
periods and use the separate periods to establish eligibility for 
different benefit programs. In Sec.  21.9691(h)(1)(i), we propose to 
require an individual whose period of active duty service meets the 
requirements to establish eligibility under 38 U.S.C. chapter 30, 32, 
or 33 and 10 U.S.C. chapter 1606 or 1607 to make an irrevocable 
election of which benefit program to use to establish eligibility and 
toward which benefit program to credit service. In Sec.  21.9691(h)(2), 
we propose to require that a child eligible for educational assistance 
under Sec.  21.9520(d) and 38 U.S.C. chapter 35 based on the parent's 
death make an irrevocable election in writing specifying which benefit 
the child wishes to receive. Although Congress does not explicitly 
state that an election must be irrevocable, VA finds that the statutory 
language supports this result. In contrast to section 3322(e) and (g), 
paragraph (h) does not merely bar ``concurrent receipt'' but instead 
bars ``duplication of eligibility'' under more than one program, and it 
provides that the individual ``shall elect . . . under which authority 
[their] service is to be credited'' or ``shall elect . . . under which 
chapter to receive . . . assistance.'' VA finds that requiring an 
election to be irrevocable best meets the requirements concerning the 
bar on duplication of benefits.
    With regard to Post 9/11 GI Bill benefits and duplication of 
payments, Congress added prohibitions using replicated statutory 
language from statutes governing payment for other benefit programs 
(see 38 U.S.C. 3033). Congress did not expressly provide any bar to 
duplication of benefits for the same period of enrollment in the event 
an individual can establish eligibility for chapter 33 benefits under 
multiple provisions, such as based on the death of more than one 
parent, or based on the beneficiary's own active-duty service and a 
parent's service (either with transferred benefits or Fry Scholarship 
benefits). However, the statutory structure is most logically construed 
to preclude concurrent awards of chapter 33 benefits to the same 
individual. Section 3311(b)(1) through (10) of title 38, U.S.C., 
provides 10 circumstances under which a person may become an ``eligible 
individual'' entitled to chapter 33 benefits, 8 of which pertain to the 
length of the individual's active service, while the other 2 categories 
involve the Fry Scholarship and Purple Heart recipients. Once an 
individual attains eligibility under any of those categories, they are 
entitled to payments under 38 U.S.C. 3313 for a program of education, 
with the amount of payment varying depending upon the category under 
which they attained eligibility. The determination that a person is an 
``eligible individual'' under section 3311 is a threshold determination 
needed to establish eligibility for payments under section 3313. The 
fact that a person could satisfy two or more of the eligibility 
categories in section 3311(b)(1) through (10) does not entitle them to 
more than one award of benefits under section 3313. Indeed, most 
individuals who qualify under one of the length-of-service categories 
in section 3311(b)(1) through (8) would also satisfy one or more of the 
lesser length-of-service standards in those paragraphs. Where an 
individual meets two or more of the eligibility categories in section 
3311(b)(1) through (10), VA proposes to credit them with the

[[Page 33683]]

eligibility category resulting in the highest level of payment, but 
would not grant them multiple awards of chapter 33 benefits. Similarly, 
if an individual would qualify under one category for two or more 
independent reasons, as in the case of an individual who could qualify 
for the Fry Scholarship based on the death of more than one parent, VA 
proposes to find that they satisfy the threshold eligibility 
requirement, but would not grant multiple awards of chapter 33 
benefits. Granting concurrent receipt of benefit payments under 
multiple eligibility provisions of the Post-9/11 GI Bill would result 
in a windfall of benefit payments not contemplated by the statutory 
scheme.
    Accordingly, we propose to add paragraphs (f) and (g) to Sec.  
21.9691 to expressly prohibit concurrent receipt of multiple Post 9/11 
GI Bill benefits awards simply because an individual may meet more than 
one of the eligibility requirements in section 3311(b)(1) through (10). 
Section 21.9691(f) would prohibit an individual from establishing 
eligibility for the Fry Scholarship under Sec.  21.9520(d) based on the 
deaths of more than one parent. Section 21.9691(g) would prohibit an 
individual from concurrently establishing eligibility for Post 9/11 GI 
Bill benefits based on his or her own service and someone else's 
service (e.g., with transferred benefits or Fry Scholarship).

n. Section 201--Extension of Delimiting Dates for Use of Educational 
Assistance by Primary Caregivers of Seriously Injured Veterans and 
Members of the Armed Forces

    Section 201 of Public Law 111-377 amended 38 U.S.C. 3031(d), 38 
U.S.C. 3319(h)(5), and 38 U.S.C. 3512(c), effective August 1, 2011, to 
extend the delimiting date for individuals eligible for educational 
assistance under each of these chapters to use the educational 
assistance if they are designated caregivers of disabled veterans or 
servicemembers and are unable to pursue a program of education because 
of responsibilities associated with this designation. Implementation of 
the new provisions will be the subject of a separate rulemaking.

o. Section 202--Limitations on Receipt of Educational Assistance Under 
National Call to Service and Other Programs of Educational Assistance

    Section 202 of Public Law 111-377 amended 38 U.S.C. 3322 and 3681, 
effective August 1, 2011, to add the National Call to Service (NCS) 
program (10 U.S.C. 510) to the list of programs under which an 
individual may not concurrently receive benefits, which bars concurrent 
receipt of benefits under the NCS program and other listed programs.
    Section 21.3022 of title 38, CFR, bars concurrent receipt of 
benefits under chapter 35 and other chapters listed in sections 3322 
and 3681; Sec.  21.5022 bars concurrent receipt of benefits under 
chapter 32 and other chapters listed in those sections; Sec.  21.7143 
bars concurrent receipt of benefits under chapter 30 and other chapters 
listed in those sections; and Sec.  21.7642 bars concurrent receipt of 
benefits under 10 U.S.C. 1606 and other chapters listed in those 
sections. Section 21.4022 bars concurrent receipt of assistance 
allowances under multiple programs. Section 21.9635(w) also bars 
concurrent receipt of educational assistance allowance under multiple 
programs. We propose to amend Sec. Sec.  21.3022, 21.4022, 21.5022, 
21.7143, 21.7642, and 21.9635(w) by adding 10 U.S.C. 510 to the list of 
programs in these regulations to bar concurrent receipt of benefits 
under the NCS program and various other programs. We propose to specify 
in each regulation that the bar on concurrent receipt of benefits under 
the NCS program and other programs would be effective August 1, 2011, 
as required by law.
    Section 21.9690 bars concurrent receipt of benefits under chapter 
33 and other chapters listed in this section. Instead of adding 10 
U.S.C. 510 to the list of programs in Sec.  21.9690, we propose to add 
10 U.S.C. 510 to the list of programs in new Sec.  21.9691, prohibiting 
concurrent receipt of benefits under chapter 33 and other chapters 
listed in this section and applicable to training pursued after July 
31, 2011, to bar concurrent receipt of benefits under the NCS program 
and various other programs.

p. Section 203--Approval of Courses

    Section 203(a)(1) of Public Law 111-377 amended 38 U.S.C. 3672(b) 
to provide for constructive approval for accredited standard college 
degree programs at public or not-for-profit private institutions, 
certain flight training courses, and apprenticeship programs. Section 
203(c) of Public Law 111-377 amended 38 U.S.C. 3675(a) to provide 
authority for a State approving agency or the Secretary to approve 
accredited programs (degree and non-college degree) at proprietary for-
profit institutions. Prior to the amendment, section 3675 provided 
approval criteria for all accredited degree and non-college degree 
programs (regardless of whether the program was offered by a public, 
proprietary for-profit, or proprietary not-for-profit institution).
    Section 203(a)(1) of Public Law 111-377 amended 38 U.S.C. 3672 to 
provide that ``accredited standard college program[s]'' offered by 
public and proprietary not-for-profit educational institutions are 
``deemed to be approved'' (essentially meaning that they are exempt 
from all approval criteria except those limitations in 38 U.S.C. 
3675(b)(1) and (b)(2), 3680A, 3684, and 3696; in other words, these 
deemed approved programs are exempt from most of the requirements of 38 
CFR 21.4253). See 38 U.S.C. 3672(b)(2)(A)(i). However, because section 
3672(b)(2)(A)(i) explicitly only applies to ``standard college degree 
program[s],'' the ``deemed to be approved'' status does not apply to 
non-college degree programs at public or proprietary not-for-profit 
educational institutions. Furthermore, Public Law 111-377, section 
203(c), amended 38 U.S.C. 3675(a)(1) by striking ``A State approving 
agency may approve the courses offered by an educational institution'' 
and inserting ``The Secretary or a State approving agency may approve 
accredited programs (including non-degree accredited programs) offered 
by proprietary for-profit educational institutions.'' Prior to this 
amendment, section 3675 placed approval requirements on all accredited 
programs of education. See 38 U.S.C. 3675(a)(1) (2010) (stating ``A 
State approving agency may approve the courses offered by an education 
institution when--'' without any further qualifiers on either 
``courses'' or ``educational institutions''; therefore, the section 
applied to all courses at all educational institutions). However, due 
to the Public Law 111-377 amendments, only proprietary for-profit 
educational institutions were explicitly subject to the approval 
requirements of section 3675. See 38 U.S.C. 3675(a)(1) (2011) (``. . . 
may approve accredited programs (including non-degree accredited 
programs) offered by proprietary for-profit educational institutions 
when--'').
    The limitations of Public Law 111-377--accredited college degree 
programs at public and proprietary not-for-profit IHLs are ``deemed to 
be approved'' while section 3675 approval requirements only explicitly 
apply to proprietary for-profit educational institutions--left a hole 
in coverage concerning the statutory approval requirements of non-
college degree programs at public or proprietary not-for-profit 
educational institutions.
    With regard to liberalized approval criteria for programs of study 
at IHLs, it

[[Page 33684]]

is important to note that section 203 only specifically addressed 
standard college degree programs at IHLs. It is silent with regard to 
non-college degree programs at IHLs. This change, in combination with 
the amendment of 38 U.S.C. 3675 to only control programs offered by 
for-profit proprietary IHLs, left no statutory provisions governing the 
approval of accredited non-college degree programs at public and 
proprietary not-for-profit IHLs.
    However, the enactment of section 408 of Public Law 114-315 
remedied this shortcoming by amending 38 U.S.C. 3675(a)(1) to provide 
for the approval criteria of accredited non-college degree programs 
offered by public and proprietary not-for-profit IHLs. Section 
3675(a)(1) was amended by striking ``The Secretary or a State approving 
agency'' and inserting ``A State approving agency, or the Secretary 
when acting in the role of a State approving agency,'' and by striking 
``offered by proprietary for-profit educational institutions'' and 
inserting ``not covered by section 3672 of this title.'' As a result of 
this amendment, accredited non-college degree programs at public and 
proprietary not-for-profit IHLs are now subject to the approval 
requirements of section 3675. Thus, State approving agencies, or the 
Secretary when acting as a State approving agency, are required to 
determine the approval requirements of non-college degree programs at 
public or proprietary not-for-profit educational institutions.
    We propose to amend Sec.  21.4253 to clarify that accredited 
standard college degree courses at proprietary for-profit educational 
institutions and accredited non-college degree courses offered at 
either proprietary for-profit institutions or public or proprietary 
not-for-profit institutions would be subject to Sec.  21.4253's 
approval criteria.
    In Sec.  21.4150(f), we propose to provide that accredited programs 
of education leading to a standard college degree offered at a public 
or proprietary not-for-profit IHL, flight training courses approved by 
the Federal Aviation Administration offered by a certified pilot school 
possessing a valid Federal Aviation Administration pilot school 
certificate or provisional pilot school certificate under 14 CFR part 
141, registered apprenticeships, programs of education leading to a 
secondary school diploma offered by a secondary school approved in the 
State in which it is operating, and licensure tests offered by a 
Federal, State, or local government are deemed approved for VA 
benefits.
    We propose to modify Sec.  21.4259 by replacing ``State approving 
agency'' each place it appears in paragraphs (a) and (b)(1) and adding, 
in each place, ``State approving agency or the Secretary'' to make it 
consistent with 38 U.S.C. 3679 and 3689. We propose to also amend Sec.  
21.4263 to clarify requirements for approval of flight programs and 
provide that certain flight training courses, including those pursued 
with chapter 33 benefits, are deemed approved under chapter 33, and 
amend Sec.  21.4235 to provide that flight training is approvable under 
certain conditions. Further, we propose to amend Sec.  21.4268 to 
provide that licensure tests offered by a Federal, State, or local 
government are deemed approved under chapter 33.
    Section 203(b) of Public Law 111-377 added 38 U.S.C. 3673(d) to 
authorize the use of State approving agencies for compliance and 
oversight activities without regard to whether the Secretary or the 
State approving agency approved the courses offered in the State 
concerned. Section 310 of Public Law 115-48 amended section 3673(d) to 
provide that the Secretary may use the services of a State approving 
agency to conduct ``compliance and risk-based surveys and other such 
oversight purposes.'' We propose to add a requirement in Sec.  21.4151 
that SAAs perform compliance and risk-based surveys and oversight 
without regard to whether a program was deemed approved or approved by 
the Secretary or SAA.

q. Section 204--Reporting Fees

    Section 204 of Public Law 111-377 amended 38 U.S.C. 3684(c), 
effective October 1, 2011, to require educational institutions to use 
fees paid after January 4, 2011, to make certifications or otherwise 
support programs for veterans. We propose to revise Sec.  21.4206 to 
add this new requirement for educational institutions in Sec.  
21.4206(e)(3). We propose to also amend Sec.  21.4206 to include 
references to 10 U.S.C. 510 and 10 U.S.C. chapter 1607. Although these 
programs are not explictly listed in 38 U.S.C. 3684, certifications 
under these benefit programs are nonetheless authorized reporting fees 
under 10 U.S.C. 510(h)(2)(B) and 10 U.S.C. 16166(b) and were previously 
inadvertently omitted from the existing regulation governing the 
payment of reporting fees to educational institutions. These chapters 
would also be included in revised Sec.  21.4206 showing the new 
requirement for educational institutions with regard to use of fees for 
certifications and support for veterans programs.
    Additionally, we propose to add in Sec.  21.4206(b) that when 
computing reporting fees for institutions, VA will not count 
individuals whose only receipt of educational assistance during a 
calendar year was tuition assistance Top-Up under 38 U.S.C. chapter 30, 
rural relocation payment, or reimbursement for a national test for 
admission, national test for credit, or a licensing or certification 
test. The exclusion of tuition assistance Top-Up payments is merely 
maintaining the same limitation currently found at Sec.  21.4206(b). 
The exclusion of the additional categories of payments is because these 
payments do not require certifications. As such, payments under 38 
U.S.C. 3684 would be inappropriate because annual reporting fees 
payments are ``in lieu of any other compensation or reimbursement for 
reports or certifications which such educational institution or joint 
apprenticeship training committee is required to submit to the 
Secretary by law or regulation.'' Since there is no required 
certification, there should be no ``in lieu of'' reporting fee.
    We note that the rates that are currently listed in Sec.  21.4206 
and that would be listed in proposed Sec.  21.4206 are and would 
continue to be outdated. We plan to further revise Sec.  21.4206(b) in 
a separate rulemaking to address the increase in reporting fees 
authorized by section 204 of Public Law 111-377 and section 304 of 
Public Law 115-48. VA will, of course, pay the rates authorized by 
statute, notwithstanding any contrary provisions in regulations pre-
dating the current statute.

r. Section 205--Election for Receipt of Alternate Subsistence Allowance 
for Certain Veterans With Service-Connected Disabilities Undergoing 
Training and Rehabilitation

    Section 205 of Public Law 111-377 amended 38 U.S.C. 3108(b), 
effective August 1, 2011, to permit veterans entitled to a subsistence 
allowance under 38 U.S.C. chapter 31 (VA's Veteran Readiness and 
Employment Program) who also are eligible for educational assistance 
under 38 U.S.C. chapter 33 (the Post-9/11 GI Bill) to elect to receive 
a payment in an amount equal to the applicable monthly amount of basic 
allowance for housing payable under 37 U.S.C. 403 in lieu of the 
otherwise applicable subsistence allowance payable under chapter 31. 
The rules implementing this provision of law were addressed in the 
interim final rule published in the Federal Register on August 1, 2011 
(Veteran Readiness and Employment Program--Changes to Subsistence 
Allowance, 76 FR 45697), which was adopted as a final rule on January 
12, 2012 (77 FR 1872).

[[Page 33685]]

Those rules are currently codified in 38 CFR 21.260(c) and 21.264(b). 
This election was authorized as an incentive to enroll in the chapter 
31 program to benefit from other services available under this program. 
See 76 FR 45697.
    Section 3322(a) of title 38, U.S.C., prohibits VA from paying 
benefits under both chapter 33 and chapter 31 concurrently. Thus, an 
individual entitled to benefits under both chapters must elect one 
chapter under which to receive benefits. While an election in this 
situation is mandatory, the timing of the election is not specified. VA 
policy allowing an individual to switch education benefit programs 
during the enrollment term was in place before Post-9/11 GI Bill 
education benefits were paid in lump sums. At that time, a switch in 
education benefit programs during the enrollment term did not create 
problems because benefit payments were paid monthly rather than in one 
lump sum. Now that VA is required to make lump sum payments at the 
beginning of the term under 38 U.S.C. 3313(d), if an individual 
switches from chapter 33 to chapter 31 during the term, because a lump 
sum was already paid under chapter 33, there may be an overpayment that 
the individual is responsible to pay. Under current Sec.  21.9635(w), 
when an individual switches from chapter 33 to chapter 31, we terminate 
chapter 33 benefits on the first day of the enrollment period during 
which the individual makes the election to switch, creating an 
overpayment because the lump sum has already been paid out.
    To avoid the creation of an overpayment when an individual switches 
from chapter 33 to chapter 31 during a term, we propose to change the 
rule regarding termination of educational assistance when an individual 
elects to switch benefit programs. We propose to add Sec.  
21.9636(w)(2) to require the termination of educational assistance 
under chapter 33 to be effective the first day of the enrollment period 
subsequent to the one during which the individual requests to receive 
educational assistance under chapter 31. This change would prevent 
overpayments because payment of chapter 31 benefits would not cover the 
same period covered by the lump sum payment of chapter 33 benefits, but 
would begin the following term. Further, for administrative efficiency, 
we propose to stipulate in Sec.  21.9636(w)(3) that an eligible 
individual may only request a change in receipt of benefits from 
chapter 33 to chapter 31 once per term, quarter, or semester.
    Similarly, to avoid the creation of an overpayment if an individual 
elects to switch from chapter 31 to chapter 33 during a term, we 
propose to add, in Sec.  21.9626(l)(2)(ii), that VA will begin paying 
net cost of tuition and fees, and the books and supplies stipend, under 
chapter 33 beginning the first day of the enrollment period subsequent 
to the enrollment period during which the individual requests to 
receive educational assistance under chapter 33. Because the chapter 31 
subsistence allowance would have been paid through the end of a month 
(and not in a lump sum for the entire term), we propose to state, in 
Sec.  21.9626(l)(2)(i), that we will begin paying the monthly housing 
allowance under chapter 33 beginning the first day of the month 
following the date the individual requests to receive educational 
assistance under chapter 33.

s. Section 206--Modification of Authority To Make Certain Interval 
Payments

    Section 206 of Public Law 111-377 amended 38 U.S.C. 3680(a), 
effective August 1, 2011, to remove VA's authority to make interval 
payments under its educational assistance and Veteran Readiness and 
Employment Program. While the law allows VA to continue to make 
payments for non-training periods under certain circumstances (i.e., 
when schools are temporarily closed under an established policy based 
on an Executive Order of the President or due to an emergency 
situation, including a strike), the total number of weeks that VA may 
continue to make payments in any 12-month period may not exceed 4 
weeks.
    We propose to revise the heading of Sec.  21.4138(f) to indicate 
that, prior to August 1, 2011, there would be no changes in payment of 
allowances for intervals and temporary school closings and add a new 
paragraph (g) to eliminate interval payments beginning August 1, 2011, 
and limit payment of allowances during temporary school closings to 4 
weeks in any 12-month period. We would not include in new paragraph (g) 
the requirement in current paragraph (f)(6) that if the reason for the 
closing is due to a strike that lasts more than 30 days, the Education 
Service Director would make the determination whether to deny payment. 
Similar to current paragraph (f)(6)(2), we propose to allow in new 
paragraph (g)(4) for the administrative review of decisions concerning 
whether a school closing is permanent or temporary. We propose to also 
add Sec.  21.9681(b)(7) to provide that VA may continue to make 
payments during a temporary school closing. We plan to further revise 
Sec.  21.9681(b) in a separate rulemaking to implement section 109 of 
Public Law 115-48, which authorizes payment of housing allowances for a 
certain period following a permanent closure. VA will, of course, 
continue to pay the monthly housing allowance to eligible individuals 
for a limited period following a permanent school closure, pursuant to 
the current statute.

t. Other Clarifications and Modifications

    In addition to the changes we propose to make to implement Public 
Law 111-377, we propose to clarify other provisions by adding language 
or simply re-wording language. We propose to also make technical 
changes to update our regulations, add provisions that were previously 
inadvertently omitted, and remove references to provisions that no 
longer exist.
    Section 309 of Public Law 115-48 added 38 U.S.C. 3684(a)(4) 
requiring courses that begin seven or fewer days after the first day of 
the academic term be treated as if they began on the first day of the 
academic term for purposes of reporting enrollment under section 3684. 
In proposed Sec.  21.9626(b)(2) and (3), we propose to provide that 
resident courses starting within seven calendar days (or one calendar 
week) of the first scheduled date of classes for an academic term will 
be considered to have begun on the first scheduled date of the term.
    In Sec. Sec.  21.4002(a), 21.4150(f), 21.4200(oo), 21.4259, 21.9735 
and 21.9750, we propose to make several minor changes--removing 
language, adding language, or re-wording existing language, or 
reorganizing the section--to clarify the current meanings but would not 
change any of the substantive meanings of the sections. Specifically, 
in Sec.  21.4002(a), we propose to remove the reference to Sec. Sec.  
19.192 and 19.183 because these sections no longer exist. In Sec. Sec.  
21.4150(f)(1) and 21.4259, among other changes, we propose to replace 
the word ``course'' with the term ``program of education,'' which would 
not change the substance of this provision because a course is a 
component of a program of education. In Sec.  21.4200(oo), we propose 
to specify that the usage of the terms ``we'', ``us'', ``our'' means 
the United States Department of Veterans Affairs. In Sec.  21.9735, we 
propose to replace the wording ``individuals and institutions of higher 
learning'' with the wording ``eligible individuals and educational 
institutions'' to be consistent with the terminology used in the 
statutes. In Sec.  21.9750, we propose to replace the wording 
``institution of higher learning''

[[Page 33686]]

with the wording ``educational institution''.
    In Sec.  21.9695, we propose to articulate additional circumstances 
that we have found in practice that warrant a finding that an 
educational institution is liable for overpayments to it from VA. We 
propose to restructure paragraph (b)(3) to clearly enumerate each 
circumstance. Under current Sec.  21.9695(b)(3), an educational 
institution is liable for overpayments when an overpayment is the 
result of willful or negligent false certification by the educational 
institution, or willful or negligent failure to certify excessive 
absences from a course, discontinuance of a course, or interruption of 
a course by the eligible individual. Under revised Sec.  9695(b)(3), we 
propose to add that the overpayment of educational assistance paid to 
the educational institution on behalf of an individual would constitute 
a liability of the educational institution when a student never attends 
classes for which he or she was certified (regardless of the reason for 
non-attendance), completely withdraws from all courses on or before the 
first day of the certified period of enrollment, or dies during the 
term; when an educational institution receives a payment for the wrong 
student, receives a duplicate payment for a student, or receives a 
payment in excess of the amount certified to VA on the enrollment 
certification; or when an educational institution submits an amended 
enrollment certification to correctly report a reduced amount of 
tuition and fee charges, reduced Yellow Ribbon Program contributions, 
or reduced amounts for both tuition and fees and Yellow Ribbon Program 
contributions. In these circumstances, the school would have received 
money it was not entitled to or was no longer entitled to because the 
certification that an individual student attended would have been 
false. The occurrence of any of these circumstances leads to the 
reasonable conclusion that an educational institution has made an 
improper student certification and has been unjustly enriched. Hence, 
it is reasonable to hold the educational institution liable for the 
amount of overpayment. Further, 38 U.S.C. 3685(b) and 3323, both of 
which are applicable to chapter 33, give VA the authority to promulgate 
regulations prescribing the circumstances which would constitute 
liability of an educational institution.
    In Sec.  21.9715, we propose to remove the references to ``Sec.  
21.9640(b)(1)(ii) or (b)(2)(ii)'' and replace it with ``Sec.  
21.9640(b)(1)(ii), (b)(2)(ii), or 21.9641(c), whichever is applicable'' 
to include the newly added Sec.  21.9641(c). We propose to replace the 
term ``the institution of higher learning'' with the term ``the 
educational institution'' in each place it appears in the section and 
replace the term ``an institution of higher learning'' with the term 
``the educational institution'' in paragraph (b)(1). Also, we propose 
to remove the reference to Sec.  21.9730 because this section does not 
exist, and we would replace it with Sec.  21.9735.
    We propose to reword the provisions in Sec.  21.9645(a)(1)(iii), 
(b)(1)(ii), and (c) to clarify that, in order for an individual to 
receive a refund of the chapter 30 contribution under the Post-9/11 GI 
Bill, the individual must have made a contribution into the Montgomery 
GI Bill and be in receipt of the monthly housing allowance at the time 
of entitlement exhaustion. We propose to remove the wording in Sec.  
21.9645(a)(1)(iii) ``He or she is a member of the Armed Forces who is 
eligible to receive educational assistance under 38 U.S.C. chapter 30 
because he or she has met the requirements of Sec.  21.7042(a) or (b) 
and is making contributions as provided in Sec.  21.7042(g)'' because 
some of it is extraneous and replace it with the wording ``He or she is 
a member of the Armed Forces who is making contributions as provided in 
Sec.  21.7042(g) towards educational assistance under 38 U.S.C. chapter 
30''. By changing the language in Sec.  21.9645(c) from ``will only be 
paid to the individual who made the contributions as an increase to the 
monthly housing allowance'' to ``will only be issued to the individual 
who made the contribution when the individual is in receipt of the 
monthly housing allowance payable under Sec.  21.9640(b) or Sec.  
21.9641(c) at the time his or her entitlement exhausts'', we are 
clarifying that an individual must be in receipt of the monthly housing 
allowance at the time of entitlement exhaustion to get a refund.
    Additionally, several sections would be updated to reference newly 
added sections when applicable. The updated sections would include 
21.9550, 21.9620, 21.9645, and 21.9715.
    In addition, for clarification, we propose to revise the language 
in Sec.  21.9550(b)(2) to state that an individual who has not used his 
or her entitlement under chapter 30 and makes an irrevocable election 
to receive benefits under chapter 33 will be entitled to 36 months of 
chapter 33 benefits. The language used in the current Sec.  
21.9550(b)(2) does not clearly state that an individual is entitled to 
36 months of benefits if they have not used or transferred chapter 30 
benefits.
    Finally, we propose to add the definition and the rules for 
``fugitive felons'' since the ``fugitive felons'' provisions, contained 
in section 505 of Public Law 107-103, the Veterans Education and 
Benefits Expansion Act of 2001 (codified in 38 U.S.C. 5315B), were 
already implemented in our regulations for chapter 30 benefits but were 
not included for chapter 33 benefits. The new fugitive felon provisions 
that we would include in this rulemaking would be merely the 
reiteration of the provisions mandated by statute. They would not 
represent any substantively novel policies or practices. We would add 
the provisions for ``fugitive felons'' in Sec. Sec.  21.9505, 21.9506, 
21.9625, 21.9626, 21.9635 and 21.9636. In Sec. Sec.  21.9505 and 
21.9506, we propose to provide the definition of ``fugitive felon'' as 
a person identified as such by Federal, State, or local law enforcement 
officials and who is a fugitive by fleeing to avoid prosecution, 
custody, or confinement for a felony. This term also includes a person 
who is a fugitive by reason of violating a condition of probation or 
parole imposed for the commission of a felony. In Sec. Sec.  21.9625(m) 
and 21.9626(m), we propose to state that an award of educational 
assistance to an otherwise eligible veteran, person, or dependent of a 
veteran will begin effective the date the individual ceases to be a 
fugitive felon. In Sec. Sec.  21.9635(bb) and 21.9636(bb), we propose 
to state that VA will not award educational assistance to an otherwise 
eligible Veteran or dependent of an otherwise eligible Veteran for any 
period during which the Veteran is a fugitive felon and that the date 
of discontinuance of an award of educational assistance to a Veteran 
who is a fugitive felon or dependent of a Veteran who is a fugitive 
felon is the date of the warrant establishing that the individual is a 
fugitive felon or the date otherwise shown by evidence to be the date 
the individual became a fugitive felon.
    Additionally, we propose to amend existing regulations and add new 
regulations to implement policies for determining discontinuance dates. 
Our current policies and practices function in ways that help to limit 
a student's debt by reflecting the reality of how schools refund 
tuition and fees during drop/add periods and by embodying what VA 
believes to be equitable dispositions for students that are negatively 
impacted by a mid-term course disapproval that is beyond the control of 
the student but where the student bears the brunt of the impact. Our 
amended and new regulations

[[Page 33687]]

would reflect our current policies and practices, except for certain 
proposed changes with respect to the first instance of withdrawal, 
reductions in rates of pursuit (either during the drop/add period, with 
mitigating circumstances, or when a punitive grade is assessed), 
individuals that have a change in active duty status, and individuals 
that die during a term--in those cases, we would implement slightly 
modified policies and practices as explained in greater detail below.
    Specifically, regarding discontinuance dates, we propose to amend 
Sec.  21.9635(c)(1) to state that, if a student withdraws from all 
courses after the school's drop/add period, and there are no mitigating 
circumstances, VA will terminate educational assistance as of the first 
day of the term from which the individual withdraws. We propose to 
amend Sec.  21.9635(c)(2) to state that, if a student withdraws from 
all courses with mitigating circumstances, withdraws during the 
school's drop/add period or within the first 30 days of the enrollment 
period, whichever is earlier, or withdraws from all courses for which a 
punitive grade is assigned, VA will terminate educational assistance as 
of the last day of attendance or the official date of change in status. 
We propose to specify in Sec.  21.9635(d) that VA will reduce 
educational assistance effective the end of the month during which the 
reduction occurred. These changes are being made because they are 
consistent with how we have interpreted the statutory requirements 
contained in 38 U.S.C. 3680(a) to process such adjustments under the 
Montgomery G.I. Bill. With respect to withdrawals during the drop/add 
period, we have historically processed claims in this manner because of 
the fact that schools generally do not assign punitive grades (or other 
penalties) during this period and generally there is no need for any 
justification or mitigating circumstances for withdrawals during this 
period, and schools generally refund all tuition and fees paid for 
courses dropped during drop/add periods or within the first 30 days of 
enrollment. Punitive and nonpunitive grades have, for the purposes of 
this regulation, the same meaning as they have historically in the 
admistration of VA educational benefits as defined in 38 CFR 21.4200(j) 
and (k). It is general practice at most schools that the drop/add 
period is a time for students to identify whether a course is 
appropriate for them and to allow the student to withdraw without any 
negative repercussions. Given the nature of the drop/add period as a 
time for the student to evaluate a course without the school imposing 
any negative consequences and that schools generally refund tuition and 
fees for courses dropped during drop/add periods or within the first 30 
days of enrollment, VA does not want a student to incur debt if he or 
she withdraws from residence training during a drop/add period or 
within the first 30 days of enrollment, whichever is earlier. 
Therefore, in these circumstances, we propose to assign the 
discontinuance date as the last date of attendance for those in 
residence training, instead of the first day of the term. This change 
to discontinue payment on the date the student last attends the course 
will allow the student to not incur a debt since no payment will be 
made for any period that the student is not in attendance of the 
course. The same procedures would likewise be codified in proposed 
Sec.  21.9636(c) and (d).
    Furthermore, in Sec.  21.9636(m), we propose to specify that VA 
will discontinue any monthly payments at the end of the month during 
which an eligible individual is incarcerated in a Federal, State, 
local, or other penal institution or correctional facility or the end 
date of the enrollment period as certified by the educational 
institution, whichever is earlier. Previously, in Sec.  21.9635(m), we 
discontinued the monthly payments the first day of the enrollment 
period for which the individual's tuition and fees were paid by a 
Federal, State, or local program, the first day of the enrollment 
period in which the individual was incarcerated, or the beginning date 
of the award under 38 CFR 21.9625, whichever was the latest. We are 
changing the discontinuance date to the end of the month or end of the 
enrollment period, whichever is earlier, because it would lead to more 
equitable dispositions for students who are negatively impacted by a 
mid-term course payment discontinuance.
    In addition to these changes, we will also add new paragraphs (b) 
and (c) in Sec.  21.9676 to clarify that incarcerated individuals are 
not entitled to a monthly housing allowance when they are incarcerated 
due to a felony conviction, although they may be still entitled to 
other educational assistance (such as unpaid tuition and fees, as well 
as books, supplies, and equipment).
    Regarding discontinuance dates when a program of education is 
disapproved during a term, either by the actions of the State approving 
agency or the Secretary, or in the event that an independent study 
course loses its accreditation, we propose to add Sec.  21.9636(h), 
(i), and (x) and state that, in each of these situations, the 
discontinuance date would be the end of the course or period of 
enrollment. This would allow the student to complete the course without 
incurring a debt for the remaining cost of the course. Currently, when 
a program of education is disapproved by the actions of the State 
approving agency or the Secretary, the discontinuance date is either 
the date the payment was first suspended by the Director of the VA 
Regional Office (if disapproval was preceded by a suspension) or the 
end of the month in which the disapproval is effective. Additionally, 
when an independent study course loses its accreditation, the 
discontinuance date is the effective date of the withdrawal of 
accreditation by the accrediting agency. This policy would be made 
because we have found that to do otherwise (i.e., make the 
discontinuance date the date of disapproval or withdrawal of 
accreditation) would unfairly punish the student for a situation 
completely out of the student's control. The student would be forced to 
either pay for the remainder of the course out-of-pocket (through the 
assessment and repayment of a VA educational assistance debt) or 
transfer--as of the date of the disapproval--to a different program. 
Transferring to a new program is highly problematic for a student, 
given the limited availability of programs willing to accept an intra-
term transfer and the inconvenience to a student of trying to find and 
transfer to a new program. As a result, many students in such 
situations would ultimately choose to stay in the disapproved course 
and incur a debt. We believe our policies should be designed to limit 
the negative impact on the student when forced to make such a choice; 
therefore, we feel it is appropriate to pay educational benefits 
through the end of the course or period of enrollment, as certified by 
the educational institution, in which the disapproval or withdrawal of 
accreditation is effective and, thereby, avoid creating a student debt 
to cover the cost for the remainder of the term.
    Additionally, in the event of a student's first instance of 
withdrawal (proposed Sec.  21.9636(b)) or reduction in the rate of 
pursuit of a program of education (proposed Sec.  21.9636(d)(1)), we 
propose to implement a policy change whereby VA would now adjust the 
eligible individual's educational assistance effective the last date of 
attendance as opposed to our current policy of adjusting effective the 
end of the month in which the change occurred. With respect to a change 
in active duty status affecting an individual's eligibility for a 
monthly

[[Page 33688]]

housing allowance, section 3313(j) requires VA to determine the amount 
of the monthly housing stipend on a pro rata basis for the period of 
the month during which an individual is not performing active duty 
service. Under this provision, in the event of a student's change in 
active duty status affecting eligibility to a monthly housing 
allowance--leaving active duty (proposed Sec.  21.9626(k)) or entering 
active duty (proposed Sec.  21.9636(n)), we propose to implement a 
policy change whereby we would no longer pay to the end of the month 
but, instead, would begin or discontinue payments effective the actual 
date of the change in status. For clarity, we propose to also include 
Sec.  21.9636(n)(1)(ii) to redirect readers to proposed paragraph 
(n)(2), as these changes would also apply to those who reduced or 
terminated training due to active duty service since monthly housing 
would no longer be payable while on active duty.
    Our current policies and practices with regard to these three 
changes in a student's status (rate of pursuit, entering active duty, 
or leaving active duty) were designed to help minimize overpayments of 
monthly benefit payments. The Post-9/11 GI Bill was initially 
implemented with rudimentary information technology (IT) systems, a 
heavy reliance on manual benefit calculations and payment authorization 
processes, and, as a consequence, suboptimal claims processing 
timeliness. Therefore, the adoption of an ``end of month'' rule, as 
opposed to specifying the actual date of change, was deemed necessary 
in order to attenuate the establishment of overpayments due to the lag 
time inherent with our limited functional capabilities. However, VA's 
current IT systems now possess features sufficient to handle these 
changes and the implementation of claims automation functionality has 
significantly reduced claims processing time. As a result, we now feel 
that it is appropriate, and more equitable, to begin and discontinue 
payments based on the actual date of the status change.
    We expect that there will be concern that these changes would 
reduce benefits, especially with regard to monthly housing allowances 
now being discontinued on the date of entry on active duty as opposed 
to the end of the month. However, we would like to note that our policy 
to pay the monthly housing allowance until the end of the month of 
entry onto active duty service has always been balanced by our policy 
to not resume payment of the monthly housing allowance until the 1st 
day of the month following the date on which the individual was 
discharged. In addition, section 113 of Public Law 115-48 and section 
501(c) of Public Law 115-62 also amended section 3313 to ensure equal 
treatment for all people leaving active duty, regardless of component 
and ensures proration of everyone's housing on the day the individual 
enters and leaves active duty service, effective August 1, 2018. 
Furthermore, although Sec. Sec.  21.9626 and 21.9636 appear under 
headings that state the provisions of each section will be effective 
for any claim submitted after July 31, 2011, this date would not apply 
to proposed Sec.  21.9626(k) or Sec.  21.9636(b), (d), or (n). These 
amended provisions would not be a result of Public Law 111-377, 
therefore, the effective dates as set for the Improvement Act 
provisions do not apply. The effective date for these sections would be 
the effective date of the final rule implementing them. These 
exceptional effective dates are explicitly included in the proposed 
text of each section. Additionally, it should be noted that current 
Sec.  21.9625(k) explicitly provides for separate beginning date rules 
for tuition and fees, monthly housing allowance, and book and supply 
stipends. These distinct rules were necessary under the statutory 
structure that existed prior to Public Law 111-377 where tuition and 
fee payments for active duty servicemembers were different than for 
veterans and dependents. However, Public Law 111-377 removed the 
distinctions. VA now pays tuition and fee and book and supply stipends, 
as required by Public Law 111-377, in the same manner for all 
beneficiaries, regardless of active duty status. Therefore, the 
standard rules for beginning dates contained in the proposed Sec.  
21.9625(a) apply for all payments except monthly housing payments with 
regards to active duty servicemembers. The only special beginning dates 
rules that are needed for active duty servicemembers are those for 
monthly housing payments contained in proposed Sec.  21.9625(k).
    Lastly, we propose to add Sec.  21.9636(a)(4), which would change 
the discontinuance-date rule for non-lump sum payments (e.g., monthly 
housing allowance) in death cases. We propose to discontinue payment 
effective the date of death. Our current rule, in Sec.  21.9635(a), 
provides that if an individual dies before the end of the period 
covered by the lump sum payment, the discontinuance date of educational 
assistance for the purpose of the lump sum payment will be the last 
date of the period covered by the lump sum payment. This current 
regulation also specifies that for all other payments, if the eligible 
individual dies while pursuing a program of education, the 
discontinuance date of educational assistance will be the end of the 
month during which the individual last attended. The change to 
discontinue payment effective the date the individual dies is necessary 
because, upon death, the student terminates his or her attendance and, 
therefore, is no longer entitled to further payments. These payments, 
unlike lump sum payments, would not be made at the time of student's 
death and, therefore, deserve to be treated differently than lump sum 
payments because there is no reason for us to make a payment after it 
is already known that the payment is not authorized.

II. Fry Scholarship

a. General

    On June 24, 2009, the President signed into law the Supplemental 
Appropriations Act, 2009, Public Law 111-32. Section 1002 of Public Law 
111-32 amended 38 U.S.C. chapter 33 (the Post-9/11 GI Bill) by adding 
38 U.S.C. 3311(b)(9), effective August 1, 2009, to extend eligibility 
for educational assistance under chapter 33 to children of members of 
the Armed Forces who, on or after September 11, 2001, die in line of 
duty while on active duty. The educational assistance payable for such 
individuals' pursuit of programs of education under chapter 33 is known 
as the ``Marine Gunnery Sergeant John David Fry Scholarship'' (Fry 
Scholarship). 38 U.S.C. 3311(f)(1). Although this amendment extending 
eligibility for chapter 33 educational assistance was effective August 
1, 2009, section 1002(d)(2) of Public Law 111-32 allowed VA to begin 
making payments of educational assistance by not later than August 1, 
2010. For individuals entitled to educational assistance between August 
1, 2009, and July 31, 2010, section 1002(d)(2) requires VA to make 
retroactive payments. Accordingly, the changes implementing the Fry 
Scholarship would be applicable to claims received on or after August 
1, 2009, and we propose to make retroactive payments for the period 
between August 1, 2009, and July 31, 2010, on any allowed claim 
received on or after August 1, 2009. This proposed rule would amend 38 
CFR part 21, subpart P, specifically Sec. Sec.  21.9520(d), 21.9530(f), 
21.9626(o), 21.9640(a)(2), and 21.9700(b), to implement the Fry 
Scholarship.

[[Page 33689]]

b. Rules Required by Public Law 111-32

1. Definition of ``Child''
    According to the amendment to 38 U.S.C. 3311(f)(2) made by section 
1002(a) of Public Law 111-32, for purposes of paying the Fry 
Scholarship, the term ``child'' must ``include'' married individuals 
and individuals above 23 years of age. We believe Congress intended for 
VA to apply current law and regulations defining ``child'' for VA 
benefit purposes to eligibility determinations for the Fry Scholarship 
and include children who are married and/or above 23 years of age. 
Accordingly, for purposes of the Fry Scholarship, we propose to define 
``child'' in Sec.  21.9520(d) as an individual who meets the 
requirements of 38 CFR 3.57, (implementing the definition of ``child'' 
in 38 U.S.C. 101(4)), except for the requirements in Sec.  3.57 
pertaining to age and marital status. With regard to age and marital 
status, we propose to add Sec.  21.9520(d)(1) and (2) to include in the 
definition of child, for purposes of eligibility for the Fry 
Scholarship, individuals who are married or over the age of 23. In 
proposed Sec.  21.9520(d), we propose to include that eligibility to 
Fry Scholarship will be for the child of a person who, after September 
10, 2001, died in the line of duty while serving on active duty as a 
member of the Armed Forces.
2. Effective Date and Entitlement Beginning and Ending Dates
    Section 1002(b) of Public Law 111-32 amended 38 U.S.C. 3313(c)(1) 
to provide individuals entitled to a Fry Scholarship the full amount of 
tuition and fees for pursuit of a program of education. We propose to 
add paragraph (2) to Sec. Sec.  21.9640(a) and 21.9641(a) to explain 
that we will pay 100 percent of the maximum amounts payable for pursuit 
of an approved program of education by an individual who is eligible 
for a Fry Scholarship under Sec.  21.9520(d).
    Section 1002(c) amended 38 U.S.C. 3321(b) to specify that an 
individual who first becomes entitled to the Fry Scholarship before 
January 1, 2013, may use the entitlement until ``the end of the 15-year 
period beginning on the date of [the individual's] eighteenth 
birthday,'' i.e., until age 33. We believe that the reference to an 
individual's 18th birthday in section 3321(b)(4) is intended only as a 
point in time used in determining the future ending date of the 
individual's entitlement, rather than the age at which an individual 
becomes eligible for the Fry Scholarship. Section 3321 speaks only of 
the period during which an individual ``may use'' his or her 
entitlement, not the date an individual may first be entitled to 
chapter 33 benefits. Section 3311 lists the individuals who meet the 
criteria for entitlement to chapter 33 educational assistance. Section 
3311(b)(9) states that ``a child or spouse of a person who, on or after 
September 11, 2001, dies in line of duty while serving on active duty 
as a member of the Armed Forces'' is entitled to chapter 33 educational 
assistance; however, this section does not specify when such individual 
may first be entitled to chapter 33 benefits. In light of the lack of a 
specified beginning date of eligibility and given the fact that 
individuals can pursue a program of education at an institution of 
higher learning before reaching the age of 18, we believe a reasonable 
beginning date would be either when a child graduates from high school 
and receives a high school diploma, even if the child may not have 
turned 18, or when the child turns 18, whichever is earlier.
    This interpretation of 38 U.S.C. 3321(b)(4) is consistent with our 
interpretation of other provisions of 38 U.S.C. 3321 when we have 
interpreted the statute in a manner that injects a logical beginning 
date when one is lacking. For example, for an individual who was last 
discharged or released from active duty before January 1, 2013, section 
3321 specifies that entitlement to chapter 33 educational assistance 
expires at the end of the 15-year period beginning on the date of an 
individual's last discharge or release from active duty of at least 90 
continuous days or discharge or release from active duty of at least 30 
continuous days for a service-connected disability. See 38 U.S.C. 
3321(a)(1), (b)(3). Section 3321, however, does not address the period 
of eligibility for individuals who are entitled to educational 
assistance based on a minimum of 90 aggregate days of active duty 
service who do not have a period of service consisting of 90 continuous 
days, as we stated in the preamble to proposed Sec.  21.9530(b). 73 FR 
78876, 78879-80. In Sec.  21.9530(b), we established a 15-year period 
of eligibility for these individuals, beginning on the date of 
discharge or release from active duty for the last period of service 
used to meet the minimum service requirements under chapter 33.
    Likewise, we propose to establish a reasonable beginning date for 
the period during which a child may use his or her entitlement to 
chapter 33 educational assistance as either the child's 18th birthday 
or upon attainment of a high school diploma, whichever is earlier. We 
propose to codify our interpretation pertaining to beginning dates of a 
child's eligibility in Sec.  21.9626(o) and ending dates of a child's 
eligibility in Sec.  21.9530(f). In Sec.  21.9626(o), we propose to 
provide that the earliest beginning date of educational assistance for 
a child eligible for Fry Scholarship will be the earlier of either the 
date the child completes the requirements of a secondary school diploma 
(or an equivalency certificate) or the date the child reaches age 18. 
In Sec.  21.9530(f), we propose to state that the ending date for a 
child who first becomes eligible for Fry Scholarship before January 1, 
2013, is the date the child turns age 33. For a child who first becomes 
eligible to Fry Scholarship on or after January 1, 2013, we propose to 
provide that their eligbility to Fry Scholarship never expires.
    We recognize that our interpretation means that a child may use the 
Fry Scholarship for a period that may exceed 15 years if the child 
begins an approved course of education before age 18. Nonetheless, our 
interpretation does not change the number of months of entitlement to 
chapter 33 educational assistance. Under 38 U.S.C. 3312(a), a child is 
entitled to a maximum of 36 months of educational assistance. Reading 
38 U.S.C. 3312(a) and 3321(b)(4) together, we believe Congress intended 
that a Fry Scholarship be provided for a maximum of 36 months to any 
child of an individual who died in line of duty while on active duty in 
the Armed Forces after September 10, 2001, to pursue an approved 
program of education as long as the child has not reached 33 years of 
age. Section 112(b) of Public Law 115-48 further amended 38 U.S.C. 
3321(b)(4) to extend the time for use of entitlement of chapter 33 
educational assistance indefinitely for children who first become 
entitled to a Fry scholarship on or after January 1, 2013. Therefore, 
Sec.  21.9530(f) would say, in the case of a child who first becomes 
entitled before January 1, 2013, benefits shall expire the day the 
child turns 33; or in the case of a child who first becomes entitled on 
or after January 1, 2013, benefits shall not expire.
3. Yellow Ribbon Program
    Section 5003(a)(1) of Public Law 110-252 added 38 U.S.C. 3317 
establishing the ``Yellow Ribbon G.I. Education Enhancement Program'' 
(Yellow Ribbon Program), which provides for enhancements to the 
educational assistance provided under 38 U.S.C. 3313. The final 
sentence of section 3317(a), as added by Public Law 110-252, provided 
that ``[t]he program shall only apply to covered individuals described 
in paragraphs (1) and (2) of section 3311(b).'' Although Congress, in 
Public Law 111-32, made specific

[[Page 33690]]

amendments to some provisions in chapter 33 concerning individuals 
entitled to Fry Scholarship benefits, it did not amend section 3317(a) 
to add a reference to section 3311(b)(9) to allow individuals entitled 
to Fry Scholarship benefits to be eligible for enhanced educational 
assistance under the Yellow Ribbon Program. Therefore, we could not 
provide enhanced educational assistance under this program to such 
individuals. Subsequently, with the enactment of Public Law 115-48, 
Congress amended section 3317(a), effective August 1, 2018, adding a 
reference to section 3311(b)(9), to explicitly apply the Yellow Ribbon 
Program to individuals entitled to Fry Scholarship benefits. 
Accordingly, we propose to amend 38 CFR 21.9700(b) to make clear that 
contributions under the Yellow Ribbon Program are available to 
individuals who establish eligibility for the Fry Scholarship under new 
Sec.  21.9520(d) after August 1, 2018.
Executive Orders 12866 and 13563 and 14094
    Executive Orders 12866 and 13563 and 14094 direct agencies to 
assess the 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 effects, and other advantages; distributive 
impacts; and equity). Executive Order 13563 (Improving Regulation and 
Regulatory Review) emphasizes the importance of quantifying both costs 
and benefits, reducing costs, harmonizing rules, and promoting 
flexibility. The Office of Information and Regulatory Affairs has 
determined that this is a significant rule under Executive Order 12866, 
Section 3(f)(1), as amended by Executive Order 14094. The Regulatory 
Impact Analysis associated with this rulemaking can be found as a 
supporting document at www.regulations.gov.
Regulatory Flexibility Act
    The Secretary of Veterans Affairs hereby certifies that this 
regulatory action 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 regulatory 
action would affect some small entities, such as testing organizations 
or educational institutions who qualify as ``small'' using the most 
recent official revenue standards, the economic impact on them would be 
minor. Educational institutions of all sizes voluntarily apply for 
approval to receive GI Bill benefits likely because tuition and fees 
revenue from student Veterans consists of guaranteed government funding 
(from U.S. taxpayer funds). However, if the cost for smaller 
educational institutions applying for GI Bill approval and meeting the 
requirements for continued approval were substantial, participating in 
the GI Bill program would not be financially viable. Because the 
policies memorialized in this regulatory action have been in effect for 
a long period of time and small institutions continue to seek and 
maintain GI Bill approval, likely profiting from this status, we 
conclude that the rules and policies in this regulatory action do not 
significantly impact these entities. Furthermore, realizing that there 
are costs to educational institutions associated with their 
participation in GI Bill programs, Congress enacted 38 U.S.C. 3684, 
increasing the reporting fee payable to testing organizations and 
educational institutions for carrying out reporting requirements, 
consequently further minimizing the economic impact on smaller 
educational and testing organizations. On this basis, the Secretary 
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. Therefore, under 5 U.S.C. 605(b), the 
initial and final regulatory flexibility analysis requirements of 5 
U.S.C. 603 and 604 do not apply.
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 on the private 
sector.
Paperwork Reduction Act of 1995
    This proposed rule includes provisions constituting revised 
collections of information under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 through 3521) that require approval by the Office of 
Management and Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA 
has submitted a copy of this rulemaking action to OMB for review and 
approval.
    OMB assigns control numbers to collections 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. If OMB does not approve the 
collection of information as requested, VA will immediately remove the 
provisions containing the collection of information or take such other 
action as is directed by OMB.
    Comments on the revised collections of information contained in 
this rulemaking should be submitted through www.regulations.gov. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AQ88, Post-9/11 Improvements, Fry Scholarship, and Interval 
Payments Amendments'' and should be sent within 60 days of publication 
of this rulemaking. The collections of information associated with this 
rulemaking can be viewed at: www.reginfo.gov/public/do/PRAMain.
    OMB is required to make a decision concerning the collection of 
information contained in this rulemaking between 30 and 60 days after 
publication of this rulemaking in the Federal Register (FR). Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the provisions of this 
rulemaking.
    The Department considers comments by the public on a revised 
collection of information in--
     Evaluating whether the revised collection 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 revised collection 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 collection 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.
    The collections of information associated with this rulemaking 
contained in 38 CFR are described immediately following this paragraph, 
under its respective title.
    Title: State Approving Agency Reports and Notices.
    OMB Control No: 2900-0051.
    CFR Provision: 38 CFR 21.4259(b).

[[Page 33691]]

    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.4259(b) would require State approving agencies 
(SAAs) who approve, disapprove, or suspend programs of education to 
prepare notices of approval to inform educational institutions, 
training establishments, and organizations or entities of the approval, 
disapproval, or suspension of their courses, training, or tests, and 
submit to VA copies of the notices for each program of education that 
is suspended or disapproved.
    Description of need for information and proposed use of 
information: The collection of information is necessary to ensure 
programs of education are operating appropriately. VA will use the 
approval notice information to determine if payment of educational 
assistance is appropriate.
    Description of likely respondents: State approving agencies.
    Estimated total number of respondents: 57 in FY 2024.
    Estimated total number of responses: 4,707 in FY 2024.
    Estimated frequency of responses: Annual.
    Estimated average burden per response: 15 total hours.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
70,605 burden hours. Using the annual number of responses 4,707, VA 
estimates a total annual reporting and recordkeeping burden of 70,605 
for respondents.
    Estimated cost to respondents per year: There is no cost to the 
respondents because, by contract, SAAs are reimbursed for submitting 
this information.
    Title: Application for VA Education Benefits (VA Form 22-1990).
    OMB Control No: 2900-0154.
    CFR Provision: 38 CFR 21.9505, 21.9506, 21.9520(c), 21.9570, 
21.9571, 21.9636(w), 21.9641(b)(3), 21.9691(h), and 21.9700(b).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9505, 21.9506, 21.9520(c), 21.9570, 21.9571, 
21.9636(w), 21.9641(b)(3), 21.9691(h), and 21.9700(b) would require the 
following individuals to submit an application for VA education 
benefits to establish their eligibility:
     Reserve and National Guard members (38 CFR 21.9505, 
21.9506)
     Individuals eligible for Montgomery GI Bill--Active Duty 
(chapter 30), Montgomery GI Bill--Selected Reserve (chapter 1606), and 
Reserve Educational Assistance Program (chapter 1607) who want to 
relinquish their eligibility to establish eligibility under the Post-9/
11 GI Bill (chapter 33) (38 CFR 21.9520(c))
     Individuals who train with the U.S. Public Health Service 
and the National Oceanic and Atmospheric Administration who want to 
transfer Post-9/11 GI Bill benefits to dependents (38 CFR 21.9570, 
21.9571)
     Individuals receiving chapter 33 benefits and who are 
eligible for 10 U.S.C. chapter 106a, 1606, or 1607, 10 U.S.C. 510, 38 
U.S.C. chapter 30, 31, 32, or 35 or Hostage Relief Act of 1980 benefits 
who want to receive educational assistance under another program (38 
CFR 21.9636(w))
     Students pursuing a non-college degree program at a non-
IHL (38 CFR 21.9641(b)(3))
     Individuals eligible under multiple programs (38 U.S.C. 
chapter 30, 32, or 33 or 10 U.S.C. chapter 1606 or 1607) who must elect 
under which authority service is to be credited (38 CFR 21.9691(h))
     Individuals eligible for the Fry Scholarship who want to 
apply for Yellow Ribbon Program benefits (38 CFR 21.9700(b))
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. This information collected will be used by VA to determine an 
individual's eligibility for educational assistance benefits.
    Description of likely respondents: Individuals.
    Estimated number of respondents: 810,000 in FY 2024.
    Estimated frequency of responses: Once.
    Estimated average burden per response: 20 minutes (VA.gov); 15 
minutes (paper).
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
249,750 burden hours. Using the annual number of responses 810,000 
(567,000 responses at 20 minutes/response; 243,000 responses at 15 
minutes/response), VA estimates a total annual reporting and 
recordkeeping burden of 249,750 for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $6,995,498 (567,000 applicants (using 
Vets.gov) per year x 20 minutes per application x $28.01 * = 5,293,890) 
and (243,000 (using paper form) per year x 15 minutes per application x 
$28.01 * = 1,701,608).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Dependents' Application for VA Education Benefits.
    OMB Control No: 2900-0098.
    CFR Provision: 38 CFR 21.9520(d), 21.9530(f), 21.9691(e), 
21.9691(h).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9520(d), 21.9530(f), 21.9691(e), and 21.9691(h) 
would require certain children to submit an application to establish 
eligibility for the Fry Scholarship, and certain individuals who must 
elect the Fry Scholarship or either Dependency and Indemnity 
Compensation (DIC) or Survivors' and Dependents' Educational Assistance 
(DEA) to submit an application to establish eligibility for the elected 
benefit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used by VA to determine an 
individual's eligibility for the Fry scholarship, DIC, or DEA.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 63,807 in FY 2024.
    Estimated frequency of responses: Once.
    Estimated average burden per response: 45 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
47,855 burden hours. Using the annual number of responses 63,807, VA 
estimates a total annual reporting and recordkeeping burden of 47,855 
hours for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $1,340,419 (63,807 respondents per year x 45 
minutes per application x $28.01*).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Application for Reimbursement of a National Exam Fee.
    OMB Control No: 2900-0706.
    CFR Provision: 38 CFR 21.9626(a)(3), 21.9668, 21.9681(b)(5).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9626(a)(3), 21.9668, 21.9681(b)(5) would require 
individuals to submit a claim and supporting

[[Page 33692]]

documentation to be reimbursed for the cost of a national test for 
admission or a national test for credit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used by VA to determine if 
an individual is eligible to receive reimbursement for a claimed 
national test, and to determine the amount of the reimbursement.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 310 in FY 2024.
    Estimated frequency of responses: Once.
    Estimated average burden per response: 15 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 78 
burden hours. Using the annual number of responses 310, VA estimates a 
total annual reporting and recordkeeping burden of 78 hours for 
respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $2,185 (310 respondents per year x 15 minutes 
per application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Application for Reimbursement of Licensing and Certification 
Fees.
    OMB Control No: 2900-0695.
    CFR Provision: 38 CFR 21.9667.
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9667 would require individuals to submit a claim 
to be reimbursed for the cost of licensing and certification tests.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used by VA to determine if 
an individual is eligible to receive reimbursement for a licensing and 
certification test, and to determine the amount of the reimbursement.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 4,210 in FY 2024.
    Estimated total number of responses: 12,630 in FY 2024.
    Estimated frequency of responses: On occasion. (3 responses per 
year).
    Estimated average burden per response: 15 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
3,158 burden hours. Using the annual number of responses 12,630, VA 
estimates a total annual reporting and recordkeeping burden of 3,158 
hours for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $88,456 (12,630 responses per year x 15 
minutes per application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Monthly Certification for On-the-Job Training and 
Apprenticeship.
    OMB Control No: 2900-0178.
    CFR Provision: 38 CFR 21.9626(c).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9626(c) would require students pursuing on-the-
job and apprenticeship programs at non-institutions of higher learning 
(IHLs) to submit monthly certifications to receive payment for such 
pursuit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used to determine whether 
an individual's educational assistance should be continued without 
change, amended, or terminated, and to determine the effective date of 
such continuance, amendment, or termination.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 15,900 in FY 2024.
    Estimated total number of responses: 190,800 in FY 2024.
    Estimated frequency of responses: Monthly.
    Estimated average burden per response: 10 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
31,800 burden hours. Using the annual number of responses 190,800, VA 
estimates a total annual reporting and recordkeeping burden of 31,800 
for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $890,718 (190,800 responses per year x 10 
minutes per application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Monthly Certification for Flight Training.
    OMB Control No: 2900-0162.
    CFR Provision: 38 CFR 21.9641(b)(5).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9641(b)(5) would require students pursuing flight 
training programs at non-IHLs to submit monthly certifications to 
receive payment for such pursuit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used to determine whether 
the individual's educational assistance should be continued without 
change, amended, or terminated, and to determine the effective date of 
such continuance, amendment, or termination.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 3,900 in FY 2024.
    Estimated total number of responses: 23,400 in FY 2024.
    Estimated frequency of responses: On occasion. (6 responses 
annually).
    Estimated average burden per response: 30 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
11,700 burden hours. Using the annual number of responses 23,400, VA 
estimates a total annual reporting and recordkeeping burden of 11,700 
hours for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $327,717 (23,400 responses per year x 30 
minutes per application x $28.01*).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Certification of Lessons Completed.
    OMB Control No: 2900-0353.
    CFR Provision: 38 CFR 21.9641(b)(6).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9641(b)(6) would

[[Page 33693]]

require students pursuing correspondence training programs at non-IHLs 
to submit certification of lessons completed to receive payment for 
such pursuit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits, which in the case of correspondence training, are based on 
the number of lessons completed. The information collected will be used 
by VA to determine the amount of educational assistance to be paid.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 154 in FY 2024.
    Estimated total number of responses: 616 in FY 2024.
    Estimated frequency of responses: Quarterly.
    Estimated average burden per response: 10 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 103 
burden hours. Using the annual number of responses 616, VA estimates a 
total annual reporting and recordkeeping burden of 103 hours for 
respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $2,885 (616 responses per year x 10 minutes 
per application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Certification of Affirmation of Enrollment Agreement 
Correspondence Course.
    OMB Control No: 2900-0576.
    CFR Provision: 38 CFR 21.9641(b)(6).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9641(b)(6) would require students pursuing 
correspondence training programs at non-IHLs to submit an affirmation 
of enrollment in a correspondence course to receive payment for such 
pursuit.
    Description of need for information and proposed use of 
information: The collection of information is necessary to pay 
benefits. The information collected will be used by VA to ensure an 
individual is enrolled in a correspondence course following the signing 
of a contract.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 75 in FY 2024.
    Estimated frequency of responses: Annually.
    Estimated average burden per response: 3 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 4 
burden hours. Using the annual number of responses 75, VA estimates a 
total annual reporting and recordkeeping burden of 4 hours for 
respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $112 (75 responses per year x 3 minutes per 
application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: VA Enrollment Certification.
    OMB Control No: 2900-0073.
    CFR Provision: 38 CFR 21.9681(b)(1); 21.9721.
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9681(b)(1) and 21.9721 would require an 
educational institution to certify a student's enrollment in an 
approved program of education (other than a student seeking 
reimbursement for taking an approved licensure or certification test or 
a national test).
    Description of need for information and proposed use of 
information: The collection of information is necessary to ensure a 
student is properly enrolled in an approved program of education before 
making any payments of educational assistance benefits. VA will use the 
information collected on VA Form 22-1999 to determine the amount of 
educational benefits payable to an individual during a period of 
enrollment or training.
    Description of likely respondents: Individuals.
    Estimated total number of respondents: 7,581,273 in FY 2024.
    Estimated total number of responses: 15,162,546 in FY 2024.
    Estimated frequency of responses: On occasion. (2 responses per 
year).
    Estimated average burden per response: 10 minutes.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
2,527,091 burden hours. Using the annual number of responses 
15,162,546, VA estimates a total annual reporting and recordkeeping 
burden of 2,527,091 hours for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $70,783,819 (15,162,546 responses per year x 
10 minutes per application x $28.01 *).
    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
    Title: Yellow Ribbon Program Agreement.
    OMB Control No: 2900-0718.
    CFR Provision: 38 CFR 21.9700(b).
    Summary of collection of information: The collection of information 
in proposed 38 CFR 21.9700(b) would include individuals who establish 
eligibility for the Fry Scholarship to receive benefits under the 
Yellow Ribbon Program.
    Description of need for information and proposed use of 
information: The collection of information is necessary to provide IHLs 
with the opportunity to indicate their participation in the Yellow 
Ribbon Program and to allow IHLs to indicate the maximum number of 
students that will receive benefits under the program. VA will use the 
information collected to determine which IHLs will be participating in 
the Yellow Ribbon Program, the maximum number of individuals for whom 
the IHL will make contributions in any given academic year, and the 
maximum dollar amount of outstanding established charges that will be 
waived for each student based on student status (i.e., undergraduate, 
graduate, doctoral) or sub-element (i.e., college or professional 
school).
    Description of likely respondents: Institutions of higher learning.
    Estimated total number of respondents: 5,600 in FY 2024.
    Estimated frequency of responses: Once.
    Estimated average burden per response: 14 hours.
    Estimated total annual reporting and recordkeeping burden: VA 
estimates the total annual reporting and recordkeeping burden to be 
78,400 burden hours. Using the annual number of responses 5,600, VA 
estimates a total annual reporting and recordkeeping burden of 78,400 
hours for respondents.
    Estimated cost to respondents per year: VA estimates the annual 
cost to respondents to be $2,195,984 (5,600 responses per year x 14 
hours per application x $28.01 *).

[[Page 33694]]

    * To estimate the total information collection burden cost, VA used 
the 2021 Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $28.01 per hour. This information is available at: 
https://www.bls.gov/oes/current/oesnat.htm#15-0000.
Assistance Listing
    The Assistance Listing numbers and titles for the programs affected 
by this proposed rule are 64.027, Post-9/11 Veterans Educational 
Assistance; 64.032, Montgomery GI Bill Selected Reserve; Reserve 
Educational Assistance Program; 64.116, Veteran Readiness for Disabled 
Veterans; 64.117, Survivors and Dependents Educational Assistance; 
64.120, Post-Vietnam Era Veterans' Educational Assistance; and 64.124, 
All-Volunteer Force Educational Assistance.
Severability
    The purpose of this section is to clarify the agencies' intent with 
respect to the severability of provisions of this proposed rule. Each 
provision that the agency has proposed is capable of operating 
independently. If any provision of this rule is determined by judicial 
review or operation of law to be invalid, that partial invalidation 
will not render the remainder of this rule invalid. Likewise, if the 
application of any portion of this rule to a particular circumstance is 
determined to be invalid, the agencies intend that the rule remain 
applicable to all other circumstances.

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, Veteran readiness.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on February 10, 2023, and authorized the undersigned to sign 
and submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts,
Regulations Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs proposes to amend 38 CFR part 21 as follows:

PART 21--VETERAN READINESS AND EMPLOYMENT AND EDUCATION

Subpart C--Survivors' and Dependents' Educational Assistance Under 
38 U.S.C. Chapter 35

0
1. The authority citation for part 21, subpart C continues to read as 
follows:

    Authority:  38 U.S.C. 501(a), 512, 3500-3566, and as noted in 
specific sections.

0
2. Amend Sec.  21.3022 by:
0
a. In paragraph (i), removing ``and''.
0
b. In paragraph (j), removing the period and adding a semicolon in its 
place.
0
c. Adding paragraph (k).
    The addition reads as follows:


Sec.  21.3022  Nonduplication--programs administered by VA.

* * * * *
    (k) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *

Subpart D--Administration of Educational Assistance Programs

0
3. The authority citation for part 21, subpart D continues to read as 
follows:

    Authority:  10 U.S.C. 2141 note, ch. 1606; 38 U.S.C. 501(a), 
chs. 30, 32, 33, 34, 35, 36, and as noted in specific sections.


Sec.  21.4002  [Amended]

0
4. Amend Sec.  21.4002, in paragraph (a), by removing ``(see Sec. Sec.  
19.192 and 19.183 of this chapter.)''.
0
5. Amend Sec.  21.4022 by:
0
a. In paragraph (k), removing the period and adding a semicolon in its 
place.
0
b. Adding paragraph (l).
    The addition reads as follows:


Sec.  21.4022  Nonduplication--programs administered by VA.

* * * * *
    (l) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *
0
6. Amend Sec.  21.4138 by:
0
a. Revising the paragraph heading for paragraph (f).
0
b. Adding paragraph (g).
    The revision and addition read as follows:


Sec.  21.4138  Certifications and release of payments.

* * * * *
    (f) Payment for intervals and temporary school closings before 
August 1, 2011. * * *
* * * * *
    (g) Payment for temporary school closings after July 31, 2011. (1) 
Subject to paragraph (2), VA may authorize payment for a temporary 
school closing that occurs during a certified period of enrollment if 
the closing is due to an emergency (including a strike) or established 
policy based on an Executive Order of the President.
    (2) An individual may not receive more than 4 weeks of payment for 
temporary school closings in any 12-month period.
    (3) The decision as to whether a school closing is permanent or 
temporary will be made by--
    (i) The director of the VA regional processing office of 
jurisdiction; or
    (ii) The Director, Education Service, if the emergency or 
established policy based on an Executive Order of the President results 
in the closing of schools in the jurisdiction of more than one VA 
regional processing office.
    (4) A school that disagrees with a decision made under paragraph 
(g)(3) of this section may request an administrative review. The review 
request must be submitted in writing and received by the director of 
the VA regional processing office of jurisdiction, or the Director, 
Education Service, whoever made the decision under paragraph (g)(3), 
within one year of the date of VA's letter notifying the school of the 
decision. A review of the decision will include the evidence of record 
and any other pertinent evidence the school may wish to submit. The 
affirmation or reversal of the initial decision based on an 
administrative review is final. The review will be conducted by the--
    (i) Director, Education Service, if the director of the VA regional 
processing office of jurisdiction made the initial decision to continue 
or discontinue payments.
    (ii) Under Secretary for Benefits, if the Director, Education 
Service, made the initial decision to continue or discontinue payments.

(Authority: 38 U.S.C. 512, 3680(a))


0
7. Amend Sec.  21.4150 by revising paragraphs (c)(2) and (f) to read as 
follows:


Sec.  21.4150  Designation.

* * * * *
    (c) * * *

[[Page 33695]]

    (2) When VA has approval, disapproval, or suspension authority.
* * * * *
    (f)(1) The Secretary is responsible for approving programs of 
education offered by any agency or instrumentality of the Federal 
Government.
    (2)(i) Effective August 1, 2011, subject to sections 21.4201, 
21.4203, 21.4251, 21.4252, 21.4253(d)(2) and (d)(3) of this chapter, 
the following programs of education are deemed approved--
    (A) An accredited standard college degree program offered at a 
public or not-for-profit proprietary institution of higher learning 
that is accredited by a national or regional agency or organization 
recognized for that purpose by the Department of Education.
    (B) A flight training course approved by the Federal Aviation 
Administration that is offered by a certified pilot school that 
possesses a valid Federal Aviation Administration pilot school 
certificate or provisional pilot school certificate under 14 CFR part 
141.
    (C) An apprenticeship program registered with the Office of 
Apprenticeship of the Employment Training Administration of the 
Department of Labor or a State apprenticeship agency recognized by the 
Office of Apprenticeship under 29 U.S.C. 50, et seq.
    (D) A program of education leading to a secondary school diploma 
offered by a secondary school approved in the State in which it is 
operating.
    (E) A licensure test offered by a Federal, State, or local 
government.

(Authority: 38 U.S.C. 3672(b))

* * * * *
0
8. Amend Sec.  21.4151 by:
0
a. In paragraph (b)(5), removing ``and''.
0
b. Redesignating paragraph (b)(6) as (b)(7).
0
c. Adding new paragraph (b)(6).
    The addition reads as follows:


Sec.  21.4151  Cooperation.

* * * * *
    (b) * * *
    (6) Effective August 1, 2011, performing compliance and risk-based 
surveys and oversight (in accordance with the provisions in the State 
approving agency contract) without regard to whether the Secretary or 
the State approving agency approved the courses offered at the 
educational institution or the courses were deemed approved; and
* * * * *
0
9. Amend Sec.  21.4200 by adding paragraphs (mm), (nn), and (oo) to 
read as follows:


Sec.  21.4200  Definitions.

* * * * *
    (mm) National test for admission. A national test for admission is 
a test used for admission to an institution of higher learning or 
graduate school (such as the Scholastic Aptitude Test (SAT), Law School 
Admission Test (LSAT), Graduate Record Exam (GRE), and Graduate 
Management Admission Test (GMAT)). A list of national tests approved by 
VA can be found at: http://inquiry.vba.va.gov/weamspub/buildSearchNE.do.

 (Authority: 38 U.S.C. 3452(b), 3315A, 3501(a)(5))


    (nn) National test for credit. A national test for credit is a test 
that provides an opportunity for course credit at an institution of 
higher learning (such as the Advanced Placement (AP) exam and College-
Level Examination Program (CLEP)). A list of national tests approved by 
VA can be found at: http://inquiry.vba.va.gov/weamspub/buildSearchNE.do.

(Authority: 38 U.S.C. 3452(b), 3315A, 3501(a)(5))


    (oo) We, us, our. When we use the terms we, us, or our, we mean the 
United States Department of Veterans Affairs.
0
10. Amend Sec.  21.4206 by revising the introductory text, paragraphs 
(b) and (e) to read as follows:


Sec.  21.4206  Reporting fee.

    VA will pay annually to each educational institution furnishing 
education or to each joint apprenticeship training committee acting as 
a training facility under 10 U.S.C. 510, chapter 1606, or chapter 1607 
or 38 U.S.C. 30, 32, 33, 35, or 36 a reporting fee for required reports 
or certifications. The reporting fee will be paid as soon as feasible 
after the end of the calendar year.
* * * * *
    (b) In computing the reporting fee, VA will not count an eligible 
individual whose only receipt of educational assistance during a 
calendar year was tuition assistance Top-Up under 38 U.S.C. chapter 30, 
a rural relocation payment, or reimbursement for a national test for 
admission, national test for credit, or a licensing or certification 
test.
* * * * *
    (e) Before VA will pay a reporting fee, an educational institution 
must certify that--
    (1) It has exercised reasonable diligence in determining whether it 
or any courses approved for VA education benefits offered by it meet 
all the applicable requirements of 10 U.S.C. 510, chapter 1606, or 
chapter 1607 or 38 U.S.C. 30, 32, 33, 35, or 36;
    (2) It will, without delay, report any failure to meet any 
requirement to VA; and
    (3) The reporting fees received after January 4, 2011, will be used 
solely for the purpose of making certifications for VA educational 
assistance under 10 U.S.C. 510, chapter 1606, or chapter 1607 or 38 
U.S.C. 30, 32, 33, 35, or 36 or for supporting programs for veterans.

(Authority: 10 U.S.C. 510, 16136, 16166; 38 U.S.C. 3034, 3241(a), 
3323(a), 3684(c))


0
11. Amend Sec.  21.4235 by:
0
a. Revising paragraph (a) introductory text and the authority citation 
following paragraph (a)(3).
0
b. Removing paragraph (b).
0
c. Redesignating paragraphs (c) through (f) as (b) through (e).
0
d. In newly redesignated paragraph (b)(5), removing ``(c)(2)'' and 
adding in its place ``(b)(2)''.
0
e. In newly redesignated paragraph (e), removing ``chapter 1606 or 38 
U.S.C. chapter 30, 32, or 35'' and adding in its place ``chapter 1606 
or 1607 or 38 U.S.C. chapter 30, 32, 33, or 35''; removing ``(a)(2) 
through (d)'' and adding in its place ``(a)(2) through (c)''; and 
removing ``paragraph (f)(1)'' and adding in its place ``paragraph 
(e)(1)''.
0
f. Revising the authority citation following newly redesignated 
paragraph (e)(2).
    The revisions read as follows:


Sec.  21.4235  Programs of education that include flight training.

* * * * *
    (a) An individual who is otherwise eligible to receive educational 
assistance under 38 U.S.C. chapters 30, 32, or 33, or a reservist 
eligible for educational assistance under 10 U.S.C. chapters 1606 or 
1607, may receive educational assistance for flight training in an 
approved program of education provided that the individual meets the 
requirements of this paragraph. Except when enrolled in a ground 
instructor certification course or when pursuing flight training under 
paragraph (e) of this section, the individual must--
* * * * *
    (3) * * *

(Authority: 10 U.S.C. 16136(c), 16166(c); 38 U.S.C. 3034(d), 
3241(b), 3313(g), 3323(a))

* * * * *
    (e) * * *
    (2) * * *

(Authority: 10 U.S.C. 16136, 16166; 38 U.S.C. 3002(3)(A), 
3034(a)(3), 3202(2)(A), 3241, 3301(3), 3323(a)).

* * * * *

[[Page 33696]]

0
12. Amend Sec.  21.4253 by revising paragraph (a) introductory text and 
the authority citation following paragraph (a)(5) to read as follows:


Sec.  21.4253  Accredited Courses.

    (a) General. All standard college degree courses offered at 
proprietary for-profit institutions and non-college degree courses 
offered at proprietary for-profit institutions and public or 
proprietary not-for-profit institutions may be approved as accredited 
courses if they meet one of the following criteria:
* * * * *
    (5) * * *

(Authority: 38 U.S.C. 501(a), 3323(c) 3675(a))

* * * * *
0
13. Amend Sec.  21.4259 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  21.4259  Suspension or disapproval.

    (a) The appropriate State approving agency or the Secretary 
(whichever entity approved the program), after approving a program of 
education or licensing or certification test--
    (1) May suspend the approval of a program of education for new 
enrollments or for a licensing or certification test for a period not 
to exceed 60 days to allow the institution to correct any deficiencies 
if the evidence of record establishes that the program of education or 
licensing or certification test fails to meet any of the requirements 
for approval.
    (2) Will immediately disapprove the program of education or 
licensing or certification test if any of the requirements for approval 
are not being met and the deficiency cannot be corrected within a 
period of 60 days.
    (b) Notification of suspension or disapproval. (1) Upon suspension 
or disapproval, the State approving agency or the Secretary, whichever 
suspended or disapproved the program of education, will notify the 
educational institution by certified or registered letter with a return 
receipt secured. It is incumbent upon the State approving agency or the 
Secretary to determine the conduct of the program of education and to 
take immediate appropriate action in each case in which it is found 
that the conduct of the program of education in any manner fails to 
comply with the requirements for approval.
    (2)(i) Each State approving agency will immediately notify VA of 
each program of education or licensing and certification test that it 
has suspended or disapproved.
    (ii) The Secretary will immediately notify the appropriate State 
approving agency of each program of education or licensing and 
certification test that it has suspended or disapproved.

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

* * * * *
0
14. Amend Sec.  21.4263 by revising paragraph (a) to read as follows:


Sec.  21.4263  Approval of flight training courses.

    (a)(1) A flight program may be approved if--
    (i)(A) For 38 U.S.C. chapters 32 and 35 and 10 U.S.C. chapters 1606 
and 1607, the flight courses that constitute the program of education 
meet Federal Aviation Administration standards for such courses and the 
Federal Aviation Administration and the State approving agency approve 
them; or
    (B) For 38 U.S.C. chapters 30 and 33, effective August 1, 2011, the 
flight program is deemed approved (A flight program will be deemed 
approved if it is approved by the Federal Aviation Administration and 
is offered by a certified pilot school that possesses a valid Federal 
Aviation Administration pilot school certificate or provisional pilot 
school certificate under 14 CFR part 141. Flight programs offered at 
flight schools listed in paragraph (b)(2) and (b)(3) of this section 
will not be approved for VA training under 38 U.S.C. chapters 30 and 
33); and
    (ii)(A) The flight training offered by a flight school is generally 
accepted as necessary for the attainment of a recognized vocational 
objective in the field of aviation; or
    (B) The flight training is offered by an institution of higher 
learning for credit towards a standard college degree program.
    (2) A State approving agency may approve a flight course only if a 
flight school or an institution of higher learning offers the course. A 
State approving agency may not approve a flight course if an individual 
instructor offers it.

(Authority: 10 U.S.C. 16136(c), 16166(c), 38 U.S.C. 3032(e), 
3241(b), 3672, 3676, 3680A)

* * * * *
0
15. Amend Sec.  21.4268 by revising paragraph (a) to read as follows:


Sec.  21.4268  Approval of licensing and certification tests.

    (a) Authority to approve licensing and certification tests. (1) 
Tests deemed approved. Effective August 1, 2011, a licensure test 
offered by a Federal, State, or local government is deemed approved in 
accordance with Sec.  21.4150(f).
    (2) VA approval. 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 licensing and 
certification tests and the organizations and entities offering the 
tests as provided in Sec.  21.4250(c)(2)(vi).
    (3) State approving agency approval. Except for the licensing and 
certification tests and organizations or entities offering these tests 
that are approved under (a)(1) and (a)(2) of this section, the 
Secretary of Veterans Affairs delegates to each State approving agency 
the authority to approve licensing and certification tests and the 
organizations and entities offering these tests located within the 
State approving agency's jurisdiction as provided in Sec.  21.4250(a).

(Authority: 38 U.S.C. 512(a), 3672(b), 3689(a))

* * * * *

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

0
16. The authority citation for part 21, subpart G continues to read as 
follows:

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

0
17. Amend Sec.  21.5022 by:
0
a. In paragraph (a)(1)(ix), removing ``or''.
0
b. In paragraph (a)(1)(x), removing the period and adding a semicolon 
in its place.
0
c. Adding paragraph (a)(1)(xi).
    The addition reads as follows:


Sec.  21.5022  Eligibility under more than one program.

    (a) * * *
    (1) * * *
    (xi) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *

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

0
18. The authority citation for part 21, subpart K continues to read as 
follows:

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

0
19. Amend Sec.  21.7143 by:
0
a. In paragraph (a)(1)(ix), removing ``or''.
0
b. In paragraph (a)(1)(x), removing the period and adding a semicolon 
in its place.
0
c. Adding paragraph (a)(1)(xi).
    The addition reads as follows:


Sec.  21.7143  Nonduplication of educational assistance.

    (a) * * *

[[Page 33697]]

    (1) * * *
    (xi) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *

Subpart L--Educational Assistance for Members of the Selected 
Reserve

0
20. The authority citation for part 21, subpart L continues to read as 
follows:

    Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), 512, ch. 36, 
and as noted in specific sections.

0
21. Amend Sec.  21.7642 by:
0
a. In paragraph (a)(9), removing ``or''.
0
b. In paragraph (a)(10), removing the period and adding a semicolon in 
its place.
0
c. Adding paragraph (a)(11).
    The addition reads as follows:


Sec.  21.7642  Nonduplication of educational assistance.

    (a) * * *
    (11) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *

Subpart P--Post-9/11 GI Bill

0
22. The authority citation for part 21, subpart P continues to read as 
follows:


    Authority: 38 U.S.C. 501(a), 512, chs. 33, 36 and as noted in 
specific sections.

0
23. Amend Sec.  21.9505 by:
0
a. Revising the section heading.
0
b. In the introductory text, removing ``apply.'' and adding in its 
place ``apply to provisions effective before August 1, 2011, unless 
otherwise noted.''
0
c. Revising the term ``Active duty''.
0
d. Adding in alphabetical order the term ``Educational institution''.
0
e. Revising the term ``Entry level and skill training''.
0
f. Adding in alphabetical order the term ``Fugitive felon''.
    The revisions and additions read as follows:


Sec.  21.9505  Definitions--for provisions effective before August 1, 
2011.

* * * * *
    Active duty means--
    (1) Full-time duty:
    (i) In the regular components of the Armed Forces, or
    (ii) Under a call or order to active duty under 10 U.S.C. 688, 
12301(a), 12301(d), 12301(g), 12302, or 12304.
    (2) In the case of a member of the Army National Guard of the 
United States or the Air National Guard of the United States, in 
addition to service described in paragraph (1)(ii) under the definition 
of ``active duty'' in this section, full-time service--
    (i) In the National Guard of a State for the purpose of organizing, 
administering, recruiting, instructing, or training the National Guard; 
or
    (ii) In the National Guard under 32 U.S.C. 502(f) when authorized 
by the President or the Secretary of Defense for the purpose of 
responding to a national emergency declared by the President and 
supported by Federal funds.
    (3) Active duty does not include--
    (i) Any period during which the individual--
    (A) Was assigned full-time by the Armed Forces to a civilian 
institution to pursue a program of education that was substantially the 
same as programs of education offered to civilians; or
    (B) Served as a cadet or midshipman at one of the service 
academies; or
    (C) Served under the provisions of 10 U.S.C. 12103(d) pursuant to 
an enlistment in the Army National Guard, Air National Guard, Army 
Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or 
Coast Guard Reserve;
    (ii) A period of service--
    (A) Required by an officer pursuant to an agreement under 10 U.S.C. 
2107(b); or
    (B)(1) Required by an officer pursuant to an agreement under 10 
U.S.C. 4348, 6959, or 9348; or
    (2) Effective for individuals entering into agreements after 
January 3, 2011, required by an officer pursuant to an agreement under 
section 1925 of title 14, U.S.C.
    (C) That was terminated because the individual is considered a 
minor by the Armed Forces, was erroneously enlisted, or received a 
defective enlistment agreement; or
    (D) Counted for purposes of repayment of an education loan under 10 
U.S.C. chapter 109.
    (iii) A period of service after July 31, 2011, used to establish 
eligibility under 38 U.S.C. chapter 30 or 32, or 10 U.S.C. chapter 1606 
or 1607.

(Authority: 38 U.S.C. 101(21)(A), 3301(1), 3311(d), 3322(b), (c); 
Pub. L. 111-377, 124 Stat. 4107-4108)

* * * * *
    Educational institution has the same meaning as the term 
institution of higher learning as defined in Sec.  21.4200(h) for 
training pursued prior to August 1, 2011.

(Authority: 38. U.S.C. 3323(a))

* * * * *
    Entry level and skill training means--
    (1) Basic Combat Training, Advanced Individual Training, and, 
effective January 4, 2011, One Station Unit Training for members of the 
Army;
    (2) Recruit Training (Boot Camp) and Skill Training (``A'' School) 
for members of the Navy
    (3) Basic Military Training and Technical Training for members of 
the Air Force
    (4) Recruit Training and Marine Corps Training (School of Infantry 
Training) for members of the Marine Corps; and
    (5) Basic Training and, for individuals entering service on or 
after January 4, 2011, Skill Training (or so-called ``A'' School) for 
members of the Coast Guard.

(Authority: 38 U.S.C. 3301(2))

* * * * *
    Fugitive felon means an individual identified as such by Federal, 
State, or local law enforcement officials and who is a fugitive by 
reason of--
    (1) Fleeing to avoid prosecution for an offense, or an attempt to 
commit an offense, which is a felony under the laws of the place from 
which the person flees;
    (2) Fleeing to avoid custody or confinement after conviction for an 
offense, or an attempt to commit an offense, which is a felony under 
the laws of the place from which the person flees; or
    (3) Violating a condition of probation or parole imposed for 
commission of a felony under Federal or State law.

(Authority: 38 U.S.C. 3323(c), 5313B)

* * * * *
0
24. Add Sec.  21.9506 to read as follows:


Sec.  21.9506  Definitions--for provisions effective after July 31, 
2011.

    For the purposes of this subpart (governing the administration and 
payment of educational assistance under 38 U.S.C. chapter 33), 
effective after July 31, 2011, unless otherwise noted, the following 
definitions apply. (See also additional definitions in Sec. Sec.  
21.1029 and 21.4200).
    Academic year means the period of time beginning August 1st of each 
calendar year and ending July 31st of the subsequent calendar year.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a))


    Active duty means--
    (1) Full-time duty:
    (i) In the regular components of the Armed Forces, or
    (ii) Under a call or order to active duty under 10 U.S.C. 688, 
12301(a), 12301(d), 12301(g), 12302, or 12304.
    (2) In the case of a member of the Army National Guard of the 
United States or the Air National Guard of the United States, in 
addition to service described in paragraph (1)(ii) under the definition 
of ``active duty'' in this section, full time service--
    (i) In the National Guard of a State for the purpose of organizing, 
administering, recruiting, instructing, or training the National Guard; 
or

[[Page 33698]]

    (ii) In the National Guard under 32 U.S.C. 502(f) when authorized 
by the President or the Secretary of Defense for the purpose of 
responding to a national emergency declared by the President and 
supported by Federal funds.
    (3) Active duty does not include--
    (i) Any period during which the individual--
    (A) Was assigned full-time by the Armed Forces to a civilian 
institution to pursue a program of education that was substantially the 
same as programs of education offered to civilians; or
    (B) Served as a cadet or midshipman at one of the service 
academies; or
    (C) Served under the provisions of 10 U.S.C. 12103(d) pursuant to 
an enlistment in the Army National Guard, Air National Guard, Army 
Reserve, Naval Reserve, Air Force Reserve, Marine Corps Reserve, or 
Coast Guard Reserve;
    (ii) A period of service--
    (A) Required by an officer pursuant to an agreement under 10 U.S.C. 
2107(b); or
    (B)(1) Required by an officer pursuant to an agreement under 10 
U.S.C. 4348, 6959, or 9348; or
    (2) Effective for individuals entering into agreements after 
January 3, 2011, required by an officer pursuant to an agreement under 
section 1925 of title 14, U.S.C.
    (C) That was terminated because the individual is considered a 
minor by the Armed Forces, was erroneously enlisted, or received a 
defective enlistment agreement; or
    (D) Counted for purposes of repayment of an education loan under 10 
U.S.C. chapter 109.

(Authority: 38 U.S.C. 101(21)(A), 3301(1), 3311(d), 3322(b), (c), 
(h); Pub. L. 111-377, 124 Stat. 4107-4108)


    Advance payment means an amount of educational assistance payable 
under Sec.  21.9641(c) for the month or fraction of the month in which 
the individual's quarter, semester, or term will begin plus the amount 
for the following month.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(d))


    Course means a unit of instruction required for an approved program 
of education that provides an individual with the knowledge and skills 
necessary to meet the requirements of the selected educational, 
professional, or vocational objective.

(Authority: 38 U.S.C. 3323(c))


    Distance learning means the pursuit of a program of education via 
distance education as defined in 20 U.S.C. 1003(7).

(Authority: 20 U.S.C. 1003(7); 38 U.S.C. 3323(c))


    Educational assistance means all monetary benefits (including but 
not limited to tuition, fees, and monthly housing allowances) payable 
under 38 U.S.C. chapter 33 to, or on behalf of, individuals who meet 
the eligibility requirements for pursuit of an approved program of 
education under 38 U.S.C. chapter 33

(Authority: 38 U.S.C. 3313)


    Educational institution has the same meaning as the term 
institution of higher learning as defined in Sec.  21.4200(h).

(Authority: 38. U.S.C. 3323(a)).


    Enrollment period means a term, quarter, or semester during which 
the educational institution offers instruction.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(g))


    Entry level and skill training means--
    (1) For members of the Army--
    (i) Basic Combat Training,
    (ii) Advanced Individual Training, and
    (iii) Effective January 4, 2011, One Station Unit Training.
    (2) For members of the Navy, Recruit Training (Boot Camp) and Skill 
Training (``A'' School).
    (3) For members of the Air Force, Basic Military Training and 
Technical Training.
    (4) For members of the Marine Corps, Recruit Training and Marine 
Corps Training (School of Infantry Training).
    (5) For members of the Coast Guard--
    (i) Basic Training and
    (ii) For individuals entering service on or after January 4, 2011, 
Skill Training (or so-called ``A'' School).

(Authority: 38 U.S.C. 3301(2))


    Fees mean any mandatory charges (other than tuition, room, and 
board) that are applied by the educational institution for pursuit of 
an approved program of education. Fees include, but are not limited to, 
health premiums, freshman fees, graduation fees, and lab fees. Fees do 
not include those charged for a study abroad course(s) unless the 
course(s) is a mandatory requirement for completion of the approved 
program of education.

(Authority: 38 U.S.C. 501(a), 3323(c))


    Fugitive felon means an individual identified as such by Federal, 
State, or local law enforcement officials and who is a fugitive by 
reason of--
    (1) Fleeing to avoid prosecution for an offense, or an attempt to 
commit an offense, which is a felony under the laws of the place from 
which the person flees;
    (2) Fleeing to avoid custody or confinement after conviction for an 
offense, or an attempt to commit an offense, which is a felony under 
the laws of the place from which the person flees; or
    (3) Violating a condition of probation or parole imposed for 
commission of a felony under Federal or State law.

(Authority: 38 U.S.C. 3323(c), 5313B)


    Institution of higher learning (IHL) means a college, university, 
or similar institution, including a technical or business school, 
offering postsecondary level academic instruction that leads to an 
associate or higher degree if the school is empowered by the 
appropriate State education authority under State law to grant an 
associate or higher degree. When there is no State law to authorize the 
granting of such a degree, the school may be recognized as an 
institution of higher learning if it is accredited for degree programs 
by a recognized accrediting agency. Such term shall also include a 
hospital offering educational programs at the postsecondary level 
without regard to whether the hospital grants a postsecondary degree. 
Such term shall also includes an educational institution that offers 
courses leading to a standard college degree or its equivalent, and is 
not located in a State but is recognized as an educational institution 
by the Secretary of Education (or comparable official) of the country 
or other jurisdiction in which the institution is located.

(Authority: 38 U.S.C. 3034(a), 3313(b), 3323(a), 3452(f))


    Lump sum payment means an amount of educational assistance paid for 
the entire term, quarter, or semester.

(Authority: 38 U.S.C. 3323(c))


    Mitigating circumstances means circumstances beyond the 
individual's control that prevent him or her from continuously pursuing 
a program of education. The following circumstances are representative 
of those that VA considers to be mitigating. This list is not all-
inclusive.
    (1) An illness or mental illness of the individual;
    (2) An illness or death in the individual's family;
    (3) An unavoidable change in the individual's conditions of 
employment;
    (4) An unavoidable geographical transfer resulting from the 
individual's employment;
    (5) Immediate family or financial obligations beyond the control of 
the individual that require him or her to

[[Page 33699]]

suspend pursuit of the program of education to obtain employment;
    (6) Discontinuance of the course by the educational institution;
    (7) Unanticipated active duty for training; or
    (8) Unanticipated difficulties in caring for the individual's child 
or children.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a)(1))


    Net cost means the amount of in-State tuition and fees the 
individual enrolled in a program of education is responsible for paying 
after the application of any--
    (1) Waiver of, or reduction in, tuition and fees, and
    (2) Scholarship, or other Federal, State, institutional, or 
employer-based aid or assistance (other than loans and any funds 
provided under section 401(b) of the Higher Education Act of 1965) that 
is provided directly to the institution specificially designated for 
the sole purpose of reducing the individual's tuition and fee charges.

(Authority: 38 U.S.C. 3313, 3323(c))


    Non-public institution means a proprietary institution as defined 
in


Sec.  21.4200  (z) of this title.

(Authority: 38 U.S.C. 3323(c))


    Program of education means a curriculum or combination of courses 
pursued at an educational institution that is accepted as necessary to 
meet the requirements for a predetermined and identified educational, 
professional, or vocational objective. Such term also means any 
curriculum or combination of courses pursued at an educational 
institution that is accepted as necessary to meet the requirements for 
more than one predetermined and identified educational, professional, 
or vocational objective if all the objectives pursued are generally 
recognized as being reasonably related to a single career field. The 
curriculum or combination of courses pursued must be listed in the 
educational institution's catalog and included in the approval notice 
provided by the State approving agency to VA in accordance with Sec.  
21.4258(b)(iv).

(Authority: 38 U.S.C. 3034(a), 3301, 3323(a), 3452(b))


    Pursuit means to work, during a certified enrollment period, 
towards the objective of a program of education. This work must be in 
accordance with approved institutional policy and applicable criteria 
of title 38, U.S.C., and must be necessary to reach the program's 
objective.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(g))


    Rate of pursuit means the measurement obtained by dividing the 
number of course hours (or the equivalent hours as determined in Sec.  
21.9750) that an individual is pursuing, including hours applied to 
refresher, remedial, and deficiency courses, by the number of hours 
considered to be full-time training at the educational institution. The 
resulting percentage (rounded to the nearest hundredth) will be the 
individual's rate of pursuit not to exceed 100 percent. For the purpose 
of this subpart, VA will consider any rate of pursuit higher than 50 
percent to be more than one-half time training.

(Authority: 38 U.S.C. 3323, 3680)


    Transferor means an individual who is entitled to educational 
assistance under the Post-9/11 GI Bill based on his or her own active 
duty service and who is approved by the military department to transfer 
all or a portion of his or her entitlement to one or more dependents.

(Authority: 38 U.S.C. 3319)



(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0154.)


0
25. Revise Sec.  21.9520 to read as follows:


Sec.  21.9520  Basic eligibility.

    An individual may establish eligibility for educational assistance 
under 38 U.S.C. chapter 33, if he or she--
    (a) Serves on active duty after September 10, 2001, for a minimum 
of 90 aggregate days, excluding entry level and skill training (to 
determine when entry level and skill training may be included in the 
total creditable length of service, see Sec.  21.9640(a) or Sec.  
21.9641(a), whichever is applicable) and, after completion of such 
service,--
    (1) Continues on active duty;
    (2) Is discharged from service with an honorable discharge;
    (3) Is released from service characterized as honorable and placed 
on the retired list, temporary disability retired list, or transferred 
to the Fleet Reserve or the Fleet Marine Corps Reserve;
    (4) Is released from service characterized as honorable for further 
service in a reserve component; or
    (5)(i) Before January 4, 2011, is discharged or released from 
service for--
    (A) A medical condition that preexisted such service and is not 
determined to be service-connected;
    (B) Hardship, as determined by the Secretary of the military 
department concerned; or
    (C) A physical or mental condition that interfered with the 
individual's performance of duty but was not characterized as a 
disability and did not result from the individual's own misconduct;
    (ii) On or after January 4, 2011, is discharged or released from 
service with an honorable discharge for--
    (A) A medical condition that preexisted such service and is not 
determined to be service-connected;
    (B) Hardship, as determined by the Secretary of the military 
department concerned; or
    (C) A physical or mental condition that interfered with the 
individual's performance of duty but was not characterized as a 
disability and did not result from the individual's own misconduct;
    (b) Serves on active duty after September 10, 2001, for a minimum 
of 30 continuous days and, after completion of such service, is 
discharged from active duty under other than dishonorable conditions 
due to a service-connected disability; or
    (c)(1) After meeting the minimum service requirements in paragraph 
(a) or (b) of this section--
    (i) An individual makes an irrevocable election to receive benefits 
under 38 U.S.C. chapter 33 by relinquishing eligibility under either 38 
U.S.C. chapter 30, or 10 U.S.C. chapter 106a, 1606, or 1607, if 
eligible for such benefits;
    (ii) A member of the Armed Forces who is eligible for educational 
assistance under 38 U.S.C. chapter 30 and who is making contributions 
towards educational assistance under 38 U.S.C. chapter 30 in accordance 
with 38 U.S.C. 3011(b) or 3012(c) makes an irrevocable election to 
receive benefits under 38 U.S.C. chapter 33; or
    (iii) A member of the Armed Forces who made an election not to 
receive educational assistance under 38 U.S.C. chapter 30 in accordance 
with 38 U.S.C. 3011(c)(1) or 3012(d)(1) makes an irrevocable election 
to receive benefits under 38 U.S.C. chapter 33.
    (2) An individual may make an irrevocable election to receive 
benefits under this chapter by properly completing VA Form 22-1990, 
submitting a transfer-of-entitlement designation under this chapter to 
the Department of Defense, or submitting a written statement that 
includes the following--
    (i) Identification information (including name, social security 
number, and address);
    (ii) If applicable, an election to receive benefits under chapter 
33 in lieu of benefits under one of the applicable

[[Page 33700]]

chapters listed in paragraph (c)(1)(i) of this section (e.g., ``I elect 
to receive benefits under the Post-9/11-GI Bill in lieu of benefits 
under the Montgomery GI Bill--Active Duty (chapter 30) program.'');
    (iii) The date the individual wants the election to be effective 
(e.g., ``I want this election to take effect on August 1, 2009.''). An 
election request for an effective date prior to August 1, 2009, will 
automatically be effective August 1, 2009; and
    (iv) An acknowledgement that the election is irrevocable (e.g., ``I 
understand that my election is irrevocable and may not be changed.''); 
or

(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0154.)


    (d) Is the child of a person who, after September 10, 2001, died in 
the line of duty while serving on active duty as a member of the Armed 
Forces. For purposes of this paragraph, the term ``child'' means an 
individual who meets the requirements of Sec.  3.57 of this chapter, 
except as to age and marital status. With regard to age and marital 
status, the term includes individuals who are-
    (1) Married; or
    (2) Over the age of 23.

(Authority: 38 U.S.C. 3311; Pub. L. 111-32, 123 Stat. 1859)


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0098.)

Sec.  21.9525  [Amended]

0
26. Amend Sec.  21.9525 by removing ``under Sec.  21.9640(b)(1)(ii) or 
(b)(2)(ii)'' each place it appears and adding in each place ``under 
Sec.  21.9640(b)(1)(ii) or (b)(2)(ii) or Sec.  21.9641(c)''.
0
27. Amend Sec.  21.9530 by:
0
a. In paragraph (a), removing ``through (e)'' and adding in its place 
``through (f)''.
0
b. Adding paragraph (f) after the authority citation following 
paragraph (e).
    The addition reads as follows:


Sec.  21.9530  Eligibility time limit.

* * * * *
    (f) Time limit for child eligible under 38 CFR 21.9520(d) (Marine 
Gunnery Sergeant John David Fry Scholarship). (1) In the case of a 
child who first becomes entitled to educational assistance under 38 CFR 
21.9520(d) before January 1, 2013, the period during which the child 
may use his or her entitlement expires the day the child turns 33; or
    (2) In the case of a child who first becomes entitled to 
educational assistance under 38 CFR 21.9520(d) on or after January 1, 
2013, the period during which the child may use his or her entitlement 
never expires.

(Authority: 38 U.S.C. 3321(b))


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0098.)


0
28. Revise Sec.  21.9550 to read as follows:


Sec.  21.9550  Entitlement.

    (a) Subject to the provisions of Sec.  21.4020 and this section, an 
eligible individual is entitled to a maximum of 36 months of 
educational assistance (or its equivalent in part-time educational 
assistance) under 38 U.S.C. chapter 33.
    (b)(1) An individual who, as of August 1, 2009, has used 
entitlement under 38 U.S.C. chapter 30, but retains unused entitlement 
under that chapter, makes an irrevocable election to receive 
educational assistance under the provisions of 38 U.S.C. chapter 33 
instead of educational assistance under the provisions of chapter 30, 
will be limited to one month (or partial month) of entitlement under 
chapter 33 for each month (or partial month) of unused entitlement 
under chapter 30 (including any months of chapter 30 entitlement 
previously transferred to a dependent that the individual has revoked).
    (2) An individual who has not used any entitlement under 38 U.S.C. 
chapter 30 or has not revoked any months of chapter 30 entitlement by 
transferring to a dependent and who makes an irrevocable election to 
receive educational assistance under the provisions of 38 U.S.C. 
chapter 33 instead of educational assistance under the provisions of 
chapter 30 will be entitled to 36 months of educational assistance 
under chapter 33.
    (c) Except as provided in Sec. Sec.  21.9560(d), 21.9561(g), 
21.9570(m), 21.9571(m), 21.9635(o), and 21.9636(o), no individual is 
entitled to more than 36 months of full-time educational assistance 
under 38 U.S.C. chapter 33.

(Authority: 38 U.S.C. 3034(a), 3312(a), 3323(a), 3695; Pub. L. 110-
252, 122 Stat. 2377)


0
29. Amend Sec.  21.9560 by revising the section heading and adding 
introductory text to read as follows:


Sec.  21.9560  Entitlement charges--for provisions effective before 
August 1, 2011.

    For training that occurs before August 1, 2011--
* * * * *
0
30. Add Sec.  21.9561 to read as follows:


Sec.  21.9561  Entitlement charges--for provisions effective after July 
31, 2011.

    For training that begins after July 31, 2011--
    (a) Training pursued at an IHL. The entitlement charge for an 
individual pursuing training at an IHL will be one of the following:
    (1) During any period for which VA pays net costs or a Yellow 
Ribbon Program payment to the institution of higher learning on the 
individual's behalf, the individual will be charged a percentage of a 
day equal to the individual's rate of pursuit for each day of the 
certified enrollment period;
    (2) During any period for which VA does not pay net costs or a 
Yellow Ribbon Program payment to the institution of higher learning on 
the individual's behalf but pays a monthly housing allowance or an 
increase (``kicker'') to the individual, the individual will be charged 
a percentage of a day equal to the individual's rate of pursuit for 
each day of the certified enrollment period for each day the individual 
received a monthly housing allowance or an increase (``kicker'');
    (3) During any period for which VA does not pay net costs or Yellow 
Ribbon Program payment to the institution of higher learning on the 
individual's behalf or a monthly housing allowance or an increase 
(``kicker'') to the individual but makes a lump sum payment to the 
individual for books, supplies, equipment, and other educational costs, 
VA will make an entitlement charge of 1 day for every $41.67 paid, with 
any remaining amount rounded to the nearest amount evenly divisible by 
$41.67.
    (b) Training pursued at a non-college degree institution. The 
entitlement charge for an individual pursuing a certificate or other 
non-college degree at a non-college degree institution will be one of 
the following:
    (1) During any period for which VA pays tuition and fees to the 
non-college degree institution on the individual's behalf, the 
individual will be charged entitlement equal to the number of months, 
and fraction thereof measured in days, determined by dividing the total 
amount paid by the amount equal to 1/12th of the amount applicable in 
the academic year in which payment is made under Sec.  
21.9641(b)(3)(ii) or (iii).
    (2) During any period for which VA does not pay net costs to the 
non-college degree institution on the individual's behalf but pays a 
monthly housing allowance or an increase (``kicker'') to the 
individual, the individual will be charged a percentage of a day equal 
to the individual's rate of pursuit for each day of the certified 
enrollment period

[[Page 33701]]

for each day the individual received a monthly housing allowance or an 
increase (``kicker'').
    (3) During any period for which VA does not pay net costs to the 
non-college degree institution on the individual's behalf or a monthly 
housing allowance or an increase (``kicker'') to the individual but 
makes a lump sum payment to the individual for books, supplies, 
equipment, and other educational costs, VA will make an entitlement 
charge of 1 day for every $41.67 paid, with any remaining amount 
rounded to the nearest amount evenly divisible by $41.67.
    (c) Apprenticeship or other on-the-job training. For each month an 
individual is paid educational assistance while pursuing an approved 
apprenticeship or other on-the-job training program, VA will make a 
charge against entitlement of--
    (1) During the first 6-month period of the program, 1 month for 
each month of training pursued.
    (2) During the second 6-month period of the program, .80 of a month 
for each month of training pursued.
    (3) During the third 6-month period of the program, .60 of a month 
for each month of training pursued.
    (4) During the fourth 6-month period of the program, .40 of a month 
for each month of training pursued.
    (5) After the first 24 months of the program, .20 of a month for 
each month of training pursued.
    (d) Flight training. An individual pursuing a non-college degree 
program consisting of flight training will be charged entitlement equal 
to the number of months, and fraction thereof measured in days, 
determined by dividing the total amount paid by 1/12th of the amount 
applicable in the academic year in which payment is made under Sec.  
21.9641(b)(5)(ii) or (iii).
    (e) Correspondence training. An individual pursuing a program of 
education by correspondence will be charged entitlement equal to the 
number of months, and fraction thereof measured in days, determined by 
dividing the total amount paid by 1/12th of the amount applicable in 
the academic year in which payment is made under Sec.  
21.9641(b)(6)(ii) or (iii).
    (f) Licensing or certification tests and national tests. When an 
individual receives educational assistance for taking an approved 
licensing or certification test, national test for admission, or 
national test for credit, VA will make a charge against entitlement for 
each payment made to him or her. The charge will be determined by--
    (1) Dividing the total amount of the payment by--
    (i) For the academic year beginning August 1, 2011, $1460; or
    (ii) For the academic year beginning on any subsequent August 1, 
the amount for the previous academic year, as increased under 38 U.S.C. 
3015(h) (but for a licensing or certification test the amount will not 
be greater than $2,000) and (2)(i) For tests taken prior to August 1, 
2018, rounding the result of paragraph (f)(1) of this section to the 
nearest whole month. The charge must be at least one month.
    (ii) For test taken on or after August 1, 2018, multiplying the 
result of paragraph (f)(1) of this section by 30, rounding to the 
nearest whole day. The charge must be at least one day.

(Authority: 38 U.S.C. 3315, 3315A)


    (g) No entitlement charge. VA will not make a charge against an 
individual's entitlement--
    (1) For tutorial assistance as provided under Sec.  21.9685; or

(Authority: 38 U.S.C. 3314)


    (2) For the rural relocation benefit as provided under Sec.  
21.9660; or

(Authority: 38 U.S.C. 3318)


    (3) For receipt of a work-study allowance as provided under Sec.  
21.4145.

(Authority U.S.C. 3485)


    (4) For pursuit of a course or courses when the individual--
    (i) Had to discontinue the course or courses as a result of being--
    (A) Ordered to active duty service under 10 U.S.C. 688, 12301(a), 
12301(d), 12301(g), 12302, or 12304; or
    (B) While on active duty service, ordered to a new duty location or 
assignment or to perform an increased amount of work; and
    (ii) Did not receive credit or lost training time for any portion 
of the period of enrollment in the course or courses for which the 
eligible individual was pursuing to complete his or her approved 
educational, professional, or vocational objective as a result of 
having to discontinue pursuit.

(Authority: 38 U.S.C. 3312(c))


    (h) Interruption to conserve entitlement. An individual may not 
interrupt a certified period of enrollment for the purpose of 
conserving entitlement. An educational institution may not certify a 
period of enrollment for a fractional part of the normal term, quarter, 
or semester if the individual is enrolled for the entire term, quarter, 
or semester. VA will make a charge against entitlement for the entire 
period of certified enrollment, if the individual is otherwise eligible 
for educational assistance, except when educational assistance is 
interrupted for any of the following conditions:
    (1) Enrollment is terminated;
    (2) The individual cancels his or her enrollment for the entire 
certified period of enrollment; or
    (3) The individual requests interruption or cancellation for any 
break when the school was closed during a certified period of 
enrollment, and VA continued payments under an established policy based 
upon an Executive Order of the President or an emergency situation 
regardless of whether or not the individual received a payment for 
educational assistance provided under this chapter for any part of the 
certified enrollment period.

(Authority: 38 U.S.C. 3323(c))


    (i) Overpayment cases. VA will make a charge against entitlement 
for an overpayment only if the overpayment is discharged in bankruptcy, 
is waived and not recovered, or is compromised.
    (1) If the overpayment is discharged in bankruptcy or is waived and 
not recovered, the charge against entitlement will be the appropriate 
rate for the elapsed period covered by the overpayment (exclusive of 
interest, administrative costs of collection, court costs and marshal 
fees).
    (2) If the overpayment is compromised and the compromise offer is 
less than the amount of interest, administrative costs of collection, 
court costs and marshal fees, the charge against entitlement will be at 
the appropriate rate for the elapsed period covered by the overpayment 
(exclusive of interest, administrative costs of collection, court costs 
and marshal fees).
    (3) If the overpayment is compromised and the compromise offer is 
equal to or greater than the amount of interest, administrative costs 
of collection, court costs and marshal fees, the charge against 
entitlement will be determined by--
    (i) Subtracting from the sum paid in the compromise offer the 
amount attributable to interest, administrative costs of collection, 
court costs and marshal fees;
    (ii) Subtracting the remaining amount of the overpayment balance as 
determined in paragraph (i)(3)(i) of this section from the amount of 
the original overpayment (exclusive of interest, administrative costs 
of collection, course costs and marshal fees);
    (iii) Dividing the result obtained in paragraph (i)(3)(ii) of this 
section from the amount of the original overpayment (exclusive of 
interest, administrative

[[Page 33702]]

costs of collection, court costs and marshal fees); and
    (iv) Multiplying the percentage obtained in paragraph (i)(3)(iii) 
of this section by the amount of entitlement otherwise chargeable for 
the period of the original overpayment.

(Authority: 38 U.S.C. 3034(a), 38 U.S.C. 3323(a), 3685)


0
31. Amend Sec.  21.9570 by revising the section heading and in the 
introductory text removing ``An individual'' and adding in its place 
``For training that occurs before August 1, 2011, an individual'' to 
read as follows:


Sec.  21.9570  Transfer of entitlement--for provisions effective before 
August 1, 2011.

* * * * *
0
32. Add Sec.  21.9571 to read as follows:


Sec.  21.9571  Transfer of Entitlement--for provisions effective after 
July 31, 2011.

    For training that occurs after July 31, 2011, an individual 
entitled to educational assistance under 38 U.S.C. chapter 33 based on 
his or her own service as a member of the Uniformed Services, and who 
is approved by a service department to transfer entitlement, may 
transfer up to a total of 36 months of his or her entitlement to a 
dependent (or among dependents). A transferor may not transfer an 
amount of entitlement that is greater than the entitlement he or she 
has available at the time of transfer.
    (a) Application of sections in subpart P to individuals in receipt 
of transferred entitlement. In addition to the rules in this section, 
the following sections apply to a dependent using transferred 
entitlement in the same manner as they apply to the individual from 
whom entitlement was transferred.
    (1) Definitions. Section 21.9506--Definitions--for provisions 
effective after July 31, 2011.

(Authority: 38 U.S.C. 3319)


    (2) Claims and applications. Section 21.9510--Claims, VA's duty to 
assist, and time limits.

(Authority: 38 U.S.C. 3319)


    (3) Eligibility. (i) Section 21.9530--Eligibility time limit, 
paragraphs (d) and (e) only; and
    (ii) Section 21.9535--Extended period of eligibility, except that 
extensions to dependents are subject to the transferor's right to 
revoke or modify transfer at any time and that VA may only extend a 
child's ending date to the date the child attains age 26.

(Authority: 38 U.S.C. 3319)


    (4) Entitlement. (i) Section 21.9550--Entitlement;
    (ii) Section 21.9561--Entitlement charges--for provisions effective 
after July 31, 2011.

(Authority: 38 U.S.C. 3319)


    (5) Counseling. (i) Section 21.9580--Counseling;
    (ii) Section 21.9585--Travel expenses.

(Authority: 38 U.S.C. 3319)


    (6) Approved programs of education and courses. (i) Section 
21.9591--Approved programs of education and courses--for provisions 
effective after July 31, 2011;
    (ii) Section 21.9601--Overcharges--for provisions effective after 
July 31, 2011.

(Authority: 38 U.S.C. 3319)


    (7) Payments--Educational assistance. (i) Section 21.9620--
Educational assistance;
    (ii) Section 21.9626--Beginning dates--for provisions effective 
after July 31, 2011, except for paragraphs (e), (g), (h), (k), or (l);
    (iii) Section 21.9630--Suspension or discontinuance of payments;
    (iv) Section 21.9636--Discontinuance dates--for provisions 
effective after July 31, 2011, except for paragraphs (o), and (v);
    (v) Section 21.9660--Rural relocation benefit;
    (vi) Section 21.9667--Reimbursement for licensing or certification 
tests--for provisions effective after July 31, 2011;
    (vii) Section 21.9668--Reimbursement for national tests;
    (viii) Section 21.9670--Work-study allowance;
    (ix) Section 21.9676--Conditions that result in reduced rates or no 
payment--for provisions effective after July 31, 2011;
    (x) Section 21.9681--Certifications and release of payments--for 
provisions effective after July 31, 2011;
    (xi) Section 21.9685--Tutorial assistance;
    (xii) Section 21.9691--Nonduplication of educational assistance--
for provisions effective after July 31, 2011;
    (xiii) Section 21.9695--Overpayments, except that the dependent and 
transferor are jointly and severally liable for any amount of 
overpayment of educational assistance to the dependent; and

(Authority: 38 U.S.C. 3319)


    (xiv) Section 21.9700--Yellow Ribbon Program.

(Authority: 38 U.S.C. 3317)


    (8) Pursuit of courses. (i) Section 21.9710--Pursuit;
    (ii) Section 21.9715--Advance payment certification;
    (iii) Section 21.9721--Certification of enrollment--for provisions 
effective after July 31, 2011;
    (iv) Section 21.9725--Progress and conduct;
    (v) Section 21.9735--Other required reports;
    (vi) Section 21.9740--False, late, or missing reports; and
    (vii) Section 21.9745--Reporting fee.

(Authority: 38 U.S.C. 3319)


    (9) Course assessment. Section 21.9750--Course measurement.

(Authority: 38 U.S.C. 3319)


    (10) Administrative. Section 21.9770--Administrative.

(Authority: 38 U.S.C. 3319)


    (b) Eligible dependents. (1) An individual transferring entitlement 
under this section may transfer entitlement to:
    (i) The individual's spouse;
    (ii) One or more of the individual's children; or
    (iii) A combination of the individuals referred to in paragraphs 
(b)(1)(i) and (ii) of this section.
    (2) A spouse must meet the definition of spouse in Sec.  3.50(a) of 
this chapter at the time of transfer.
    (3) A child must meet the definition of child in Sec.  3.57 of this 
chapter at the time of transfer. The transferor must make the required 
designation shown in Sec.  21.9571(d)(1) before the child attains the 
age of 23.
    (4) A stepchild, who meets VA's definition of child in Sec.  3.57 
of this chapter at the time of transfer and who is temporarily not 
living with the transferor, remains a member of the transferor's 
household if the actions and intentions of the stepchild and transferor 
establish that normal family ties have been maintained during the 
temporary absence.

(Authority: 38 U.S.C. 3319)


    (c) Timeframe during which an individual may transfer entitlement. 
An individual approved by his or her department to transfer entitlement 
may do so at any time while serving as a member of the uniformed 
services, subject to the transferor's 15-year period of eligibility as 
provided in Sec.  21.9530.

(Authority: 38 U.S.C. 3319)


    (d) Designating dependents; designating the amount to transfer; and 
period of transfer. (1) An individual transferring entitlement under 
this section must:
    (i) Designate the dependent or dependents to whom such entitlement 
is being transferred;

[[Page 33703]]

    (ii) Designate the number of months of entitlement to be 
transferred to each dependent; and
    (iii) Specify the beginning date and ending date of the period for 
which the transfer is effective for each dependent. The designated 
beginning date may not be earlier than the date the individual requests 
approval from his or her service department.
    (2) VA will accept the transferor's designations as shown on any 
document signed by the transferor that shows the information required 
in paragraphs (d)(1)(i) through (d)(1)(iii) of this section.

(Authority: 38 U.S.C. 3319)


    (e) Maximum months of entitlement transferable. (1) The maximum 
amount of entitlement a transferor may transfer is the lesser of:
    (i) Thirty-six months of his or her entitlement; or
    (ii) The maximum amount authorized by the Secretary of the 
department concerned; or
    (iii) The amount of entitlement he or she has available at the time 
of transfer.
    (2) The transferor may transfer up to the maximum amount of 
transferable entitlement:
    (i) To one dependent; or
    (ii) Divided among his or her designated dependents in any manner 
he or she chooses.

(Authority: 38 U.S.C. 3319)


    (f) Revocation of transferred entitlement. (1) A transferor may 
revoke any unused portion of transferred entitlement (transferred 
entitlement is ``used'' in the amount of the entire enrollment period 
on the first day of the enrollment period; therefore, a transferor 
cannot revoke the entitlement used for an enrollment period after the 
enrollment period has begun) at any time by submitting a written notice 
to both the Secretary of Veterans Affairs and the Secretary of the 
department concerned that initially approved the transfer of 
entitlement. VA will accept a copy of the written notice addressed to 
the Secretary of the department concerned as sufficient written 
notification to VA.
    (2) The revocation will be effective the later of--
    (i) The date VA receives the notice of revocation; or
    (ii) The date the department concerned receives the notice of 
revocation.

(Authority: 38 U.S.C. 3319)


    (g) Modifying a transfer of entitlement. (1) A transferor may 
modify the designations he or she made under paragraph (d) of this 
section at any time, except that a modification of a beginning date 
under paragraph (d)(1)(iii) of this section must be effective on or 
after the date the modification is submitted. Any modification made 
will apply only with respect to unused transferred entitlement 
(transferred entitlement is ``used'' in the amount of the entire 
enrollment period on the first day of the enrollment period; therefore, 
a transferor cannot revoke the entitlement used for an enrollment 
period after the enrollment period has begun). The transferor must 
submit a written notice to both the Secretary of Veterans Affairs and 
the Secretary of the department concerned that initially approved the 
transfer of entitlement. VA will accept a copy of the written notice 
addressed to the department as sufficient written notification to VA.
    (2) The modification will be effective the later of--
    (i) The date VA receives the notice of modification; or
    (ii) The date the department concerned receives the notice of 
modification.

(Authority: 38 U.S.C. 3319)


    (h) Prohibition on treatment of transferred entitlement as marital 
property. Entitlement transferred under this section may not be treated 
as marital property, or the asset of a marital estate, subject to 
division in a divorce or other civil proceeding.

(Authority: 38 U.S.C. 3319)


    (i) Entitlement charge to transferor. VA will reduce the 
transferor's entitlement at the rate of 1 month of entitlement for each 
month of transferred entitlement used by a dependent or dependents.

(Authority: 38 U.S.C. 3319)


    (j) Secondary school diploma (or equivalency certificate). Children 
who have reached age 18 and spouses may use transferred entitlement to 
pursue and complete the requirements of a secondary school diploma (or 
equivalency certificate).

(Authority: 38 U.S.C. 3319)


    (k) Rate of payment of educational assistance. VA will apply the 
rules in Sec.  21.9641 (and Sec. Sec.  21.9650 and 21.9655 when 
applicable) to determine the educational assistance rate that would 
apply to the transferor. VA will pay the dependent and/or the 
dependent's institution of higher learning (or school, educational 
institution, or institution as defined in Sec.  21.4200(a) if the 
dependent is using transferred entitlement to pursue and complete the 
requirements of a secondary school diploma or equivalency certificate) 
the amounts of educational assistance payable under 38 U.S.C. chapter 
33 in the same manner and at the same rate as if the transferor were 
enrolled in the dependent's program of education, except that VA will--
    (1) Disregard the fact that either the transferor or the dependent 
child is (or both are) on active duty, and pay the veteran rate to a 
dependent child;
    (2) Pay the veteran rate to a surviving spouse; and
    (3) Proportionally adjust the payment amounts, other than the book 
stipend, a dependent would otherwise receive under Sec.  21.9641 if the 
dependent's months of entitlement will exhaust during the certified 
enrollment period, by--
    (i) Determining the amount of payment for the net cost of tuition 
and fees the dependent would otherwise be eligible to receive for the 
entire enrollment period, then dividing this amount by the number of 
days in the dependent's quarter, semester, or term, as applicable, to 
determine the dependent's daily rate, then determining the actual 
amount of payment for the net cost of tuition and fees to be paid by 
multiplying the dependent's daily rate by his or her remaining months 
and days of entitlement to educational assistance as provided under 
Sec.  21.9571; and
    (ii) Discontinuing the dependent's monthly housing allowance 
effective as of the date the dependent's months and days of entitlement 
exhausts.

(Authority: 38 U.S.C. 3319)


    (l) Transferor fails to complete required service contract that 
afforded participation in the transferability program.
    (1) Dependents are not eligible for transferred entitlement if the 
transferor fails to complete the amount of service he or she agreed to 
serve in the uniformed services in order to participate in the 
transferability program, unless--
    (i) The transferor did not complete the service due to:
    (A) His or her death;
    (B) A medical condition that preexisted such service on active duty 
and that the Secretary of the department concerned determines is not 
service-connected;
    (C) A hardship, as determined by the Secretary of the department 
concerned; or
    (D) A physical or mental condition that was not characterized as a 
disability and did not result from the individual's own willful 
misconduct but interfered with the individual's performance of

[[Page 33704]]

duty, as determined by the Secretary of the department concerned; or
    (ii) The transferor is considered to have completed his or her 
service agreement as a result of being discharged for--
    (A) A disability; or
    (B) A reduction in force.
    (2) VA will treat all payments of educational assistance to 
dependents as overpayments if the transferor does not complete the 
required service unless the transferor does not complete the required 
service due to one of the reasons stated in paragraph (l)(1)(i) of this 
section or the transferor was not discharged for one of the reasons 
stated in paragraph (l)(1)(ii) of this section.

(Authority: 38 U.S.C. 3034(a), 3311(c)(4), 3319)


    (m) Dependent is eligible for educational assistance under this 
section and is eligible for educational assistance under 38 U.S.C. 
chapter 33 based on his or her own service. Dependents who are eligible 
for payment of educational assistance through transferred entitlement 
and are eligible for payment under 38 U.S.C. chapter 33 based on their 
own active service are not subject to the 48-month limit on training 
provided for in Sec.  21.4020 when combining transferred entitlement 
with their own entitlement earned under 38 U.S.C. chapter 33. If the 
dependent is awarded educational assistance under another program 
listed in Sec.  21.4020 (other than 38 U.S.C. chapter 33), the 48-month 
limit on training will apply.

(Authority: 38 U.S.C. 3034(a), 3319, 3322, 3323(a), 3695)


(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0154.)


0
33. Amend Sec.  21.9590 by revising the section heading and adding 
introductory text to read as follows:


Sec.  21.9590  Approved programs of education and courses--for 
provisions effective before August 1, 2011.

    For training that occurs prior to August 1, 2011--
* * * * *
0
34. Add Sec.  21.9591 to read as follows:


Sec.  21.9591  Approved programs of education and courses--for 
provisions effective after July 31, 2011.

    For training that begins on or after August 1, 2011--
    (a) Payments of educational assistance are based on pursuit of a 
program of education. In order to receive educational assistance under 
38 U.S.C. chapter 33, an eligible individual must--
    (1) Be pursuing an approved program of education;
    (2) Be pursuing refresher, remedial, or deficiency courses as these 
courses are defined in Sec.  21.7020(b);
    (3) Be pursuing other preparatory or special education or training 
courses necessary to enable the individual to pursue an approved 
program of education;
    (4) Have taken an approved licensing or certification test, 
national test for admission, or national test for credit 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 educational 
assistance for the amount of tuition and fees not covered by military 
tuition assistance.

(Authority: 38 U.S.C. 3313, 3315, 3315A, 3323(a), 3689)


    (b) Approval of the selected program of education. Subject to 
paragraph (a), VA will approve a program of education under 38 U.S.C. 
chapter 33 selected by the individual if:
    (1) The program meets the definition of a program of education in 
Sec.  21.9506;
    (2) Except for a program consisting of a licensing or certification 
test, a national test for admission, or a national test for credit, the 
program has an educational, vocational, or professional objective as 
described in Sec.  21.7020(b)(13) or (22);
    (3) The courses, subjects, licensing or certification tests, 
national tests for admission, or national tests for credit 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 individual maintain employment in a vocation 
or profession, or for a program consisting of a national test for 
admission or a national test for credit, the individual is not already 
qualified for the objective of the program.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3471, 3689)


    (c) Change of program. In determining whether an individual may 
change his or her selected program of education, VA will apply the 
provisions of Sec.  21.4234.
0
35. Amend Sec.  21.9600 by revising the section heading and adding 
introductory text to read as follows:


Sec.  21.9600  Overcharges--for provisions effective before August 1, 
2011.

    The provisions of this section apply to enrollment periods that 
begin before August 1, 2011.
* * * * *
0
36. Add Sec.  21.9601 to read as follows:


Sec.  21.9601  Overcharges--for provisions effective after July 31, 
2011.

    The provisions of this section apply to enrollment periods that 
begin after July 31, 2011.
    (a) Overcharges by educational institutions may result in the 
disapproval of enrollments. VA may disapprove an educational 
institution for further enrollments if the educational institution 
charges an individual, or receives from an individual or from VA on 
behalf of an individual, an amount for tuition and fees that exceeds 
the tuition and fees that the educational institution requires from 
similarly circumstanced individuals enrolled in the same course.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3690(a))


    (b) Overcharges by organizations or entities offering licensing or 
certification tests, national test for admission, or national tests for 
credit may result in disapproval of tests. VA may disapprove an 
organization or entity offering a licensing or certification test, 
national test for admission, or national test for credit, when the 
organization or entity offering the test charges an individual, or 
receives from an individual, an amount for fees that exceeds the fees 
that the organization or entity requires from similarly circumstanced 
individuals taking the same test.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3689(d), 3690(a))


0
37. Revise Sec.  21.9620 to read as follows:


Sec.  21.9620  Educational Assistance.

    VA will pay educational assistance for an eligible individual's 
pursuit of an approved program of education. The eligible individual 
and/or the individual's educational institution will receive payment 
amounts in accordance with the formulas listed in Sec. Sec.  21.9640 
and 21.9641 of this part.

(Authority: 38 U.S.C. 3313, 3314, 3315, 3316, 3317)


0
38. Amend Sec.  21.9625 by:
0
a. Revising the section heading.
0
b. In the introductory text, removing ``VA will determine'' and adding 
in its place ``For a claim submitted during the period beginning August 
1, 2009, and ending July 31, 2011, VA will determine''.

[[Page 33705]]

0
c. Adding paragraph (m).
    The revision and addition reads as follows:


Sec.  21.9625  Beginning dates--for provisions effective before August 
1, 2011.

* * * * *
    (m) Fugitive felons. An award of educational assistance to an 
otherwise eligible veteran, person, or dependent of a veteran will 
begin effective the date the individual ceases to be a fugitive felon, 
as shown by evidence, which may include evidence that a warrant for an 
offense involving flight is resolved by--
    (1) Arrest;
    (2) Surrendering to the issuing authority;
    (3) Dismissal; or
    (4) Court documents (dated after the warrant for the arrest of the 
felon) showing the individual is no longer a fugitive.

(Authority: 38 U.S.C. 3323(c), 5313B)


0
39. Add Sec.  21.9626 to read as follows:


Sec.  21.9626  Beginning dates--for provisions effective after July 31, 
2011.

    For a claim submitted after July 31, 2011, VA will determine the 
beginning date of an award or increased award of educational assistance 
under this section. In no case will the beginning date be earlier than 
August 1, 2009, or for training pursued at non-degree institutions 
before October 1, 2011. When more than one paragraph in this section 
applies, VA will award educational assistance using the latest of the 
applicable beginning dates.

(Authority: 38 U.S.C. 3313, 3316, 3323(a), 5110, 5111, 5113)


    (a) Entrance or reentrance including change of program or 
educational institution. When an eligible individual enters or reenters 
into training (including a reentrance following a change of program or 
educational institution), the beginning date of his or her award of 
educational assistance will be determined as follows:
    (1) For other than a licensing or certification test, a national 
test for admission, or a national test for credit. (i) If the award is 
an award for the first period of enrollment for which the eligible 
individual began pursuing his or her program of education, the 
beginning date will be the latest of--
    (A) The date the educational institution certifies under paragraph 
(b) or (c) of this section;
    (B) One year before the date of claim as determined by Sec.  
21.1029(b);
    (C) The effective date of the approval of the program of education;
    (D) One year before the date VA receives approval notice for the 
program of education.
    (ii) If the award is an award for a second or subsequent period of 
enrollment for which the eligible individual is pursuing a program of 
education, the effective date of the award will be the latest of--
    (A) The date the educational institution certifies under paragraph 
(b) or (c) of this section;
    (B) The effective date of the approval of the program of education; 
or
    (C) One year before the date VA receives the approval notice for 
the program of education.

(Authority: 38 U.S.C. 3034(a), 3313, 3316, 3323(a), 3672, 5103)


    (2) For a licensing or certification test. VA will award 
educational assistance for the cost of a licensing or certification 
test only when the eligible individual takes such test on or after 
August 1, 2009--
    (i) While the test is approved under 38 U.S.C. chapter 36;
    (ii) While the individual is eligible for educational assistance 
under this subpart; and
    (iii) When the claim for reimbursement for the cost of the test is 
submitted within 1 year of the date the test is taken.
    (3) For a national test for admission or a national test for 
credit. VA will award educational assistance for the cost of a national 
test for admission or a national test for credit only when the eligible 
individual takes such test after July 31, 2011--
    (i) While the test is approved under 38 U.S.C. chapter 36;
    (ii) While the individual is eligible for educational assistance 
under this chapter; and
    (iii) When claim for reimbursement for the cost of the test is 
submitted within 1 year of the date the test is taken.

(Authority: 38 U.S.C. 3034(a), 3315A, 3323(a), 3452(b))


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0706.)


    (b) Certification for program of education offered at an IHL. (1) 
When the individual enrolls in a course offered by independent study or 
distance learning, the beginning date of the award or increased award 
of educational assistance will be the date the eligible individual 
begins pursuit of the course according to the regularly established 
practices of the educational institution.
    (2) When the individual enrolls in a resident course, the beginning 
date of the award or increased award of educational assistance will be 
the first scheduled date of classes for the term, quarter, or semester 
in which the eligible individual is enrolled, except as provided in 
paragraphs (b)(3), (b)(4), and (b)(5) of this section.
    (3) When the individual enrolls in a resident course whose first 
scheduled class begins on or after the eighth calendar day when, 
according to the school's academic calendar, classes are scheduled to 
begin for the term, quarter, or semester, the beginning date of the 
award or increased award of educational assistance allowance will be 
the actual date of the first class scheduled for that particular 
course.
    (4) When the individual enrolls in a resident course, the beginning 
date of the award will be the date of reporting provided that--
    (i) The published standards of the school require the eligible 
individual to register before reporting; and
    (ii) The published standards of the school require the eligible 
individual to report no more than 14 days before the first scheduled 
date of classes for the term, quarter, or semester for which the 
eligible individual has registered.
    (5) When the eligible individual enrolls in a resident course and 
the first day of classes is more than 14 days after the date of 
registration, the beginning date of the award or increased award of 
educational assistance will be the first day of classes.

(Authority: 38 U.S.C. 3313, 3316, 3323)


    (c) Certification for program of education offered by a non-college 
degree educational institution. (1) Except as provided in paragraphs 
(c)(2) and (c)(3) of this section, when an eligible individual enrolls 
at a non-college degree educational institution, the beginning date of 
the award of educational assistance will be the later of--
    (i) The date determined in paragraph (b) of this section, or
    (ii) October 1, 2011.
    (2) When an eligible individual enrolls at a non-degree educational 
institution for a program of education that is offered by 
correspondence, the beginning date of the award of educational 
assistance will be the later of--
    (i) The date the first lesson was sent,
    (ii) The date of affirmance (as defined in Sec.  21.7020(b)(36)), 
or
    (iii) October 1, 2011.

(Authority: 38 U.S.C. 3313, 3316, 3323)


    (3) When an individual enrolls in a program of apprenticeship or 
other on-the-job training, the beginning date of the award of 
educational assistance will be the later of--

[[Page 33706]]

    (i) The first date of employment in the training position; or
    (ii) October 1, 2011.

(Authority: 38 U.S.C. 3313, 3316, 3323)


(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0154, 2900-0178, 2900-0162, 2900-0353, and 2900-0576.)


    (d) Liberalizing laws and VA issues. When a liberalizing law or VA 
issue affects the beginning date of an eligible individual's award of 
educational assistance, the beginning date will be adjusted in 
accordance with the facts found, but not earlier than the effective 
date of the act or administrative issue.

 (Authority: 38 U.S.C. 3323(c), 5113)


    (e) Correction of military records. As determined in Sec.  21.9530, 
the eligibility of a veteran may arise because the nature of the 
veteran's discharge or release is changed by appropriate military 
authority. In these cases, the beginning date of the veteran's 
educational assistance will be in accordance with facts found, but not 
earlier than the date the nature of the discharge or release was 
changed.

(Authority: 38 U.S.C. 3323(c))


    (f) Individuals in a penal institution. If an eligible individual 
is not receiving or is receiving a reduced rate of educational 
assistance under Sec.  21.9675 (based on incarceration in a Federal, 
State, local, or other penal institution or correctional facility due 
to a felony conviction), the rate will be increased or assistance will 
begin effective the earlier of the following:
    (1) The date the tuition and fees are no longer being paid under a 
Federal (other than one administered by VA), State, or local program; 
or
    (2) The date the individual is released from the penal institution 
or correctional facility.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3482(g))


    (g) Increase (``kicker'') based on critical skills or specialty. If 
an eligible individual is entitled to an increase (``kicker'') in the 
monthly rate of educational assistance under 38 U.S.C. 3316, the 
effective date of that increase (``kicker'') will be the later of--
    (1) The beginning date of an eligible individual's award as 
determined by paragraphs (a) through (f) of this section; or
    (2) The first date on which the eligible individual is entitled to 
the increase (``kicker'') as determined by the Secretary of the 
military department concerned.

(Authority: 10 U.S.C. 16131(i); 38 U.S.C. 3015(d), 3316(a))


    (h) Increase in percentage of maximum amount payable based on 
length of active duty service requirements. If an eligible individual 
is entitled to an increase in the percentage of the maximum amount of 
educational assistance payable as a result of meeting additional length 
of active duty service requirements, the effective date of that 
increase will be the later of--
    (1) The beginning date of the eligible individual's award as 
determined by paragraphs (a) through (f) of this section; or
    (2) The first day of the term, quarter, or semester following the 
term, quarter, or semester in which the eligible individual becomes 
entitled to an increase in the percentage of the maximum amount 
payable.

(Authority: 38 U.S.C. 3311, 3313)


    (i) Spouse eligible for transferred entitlement. If a spouse is 
eligible for transferred entitlement under Sec.  21.9571, the beginning 
date of the award of educational assistance will be no earlier than the 
latest of the following dates--
    (1) The date the Secretary of the military department concerned 
approves the transferor to transfer entitlement;
    (2) The date the transferor completes 6 years of service in the 
Armed Forces;
    (3) The date the transferor specified in his or her designation of 
transfer; or
    (4) The date the spouse first meets the definition of spouse in 
Sec.  3.50(a) of this chapter.

(Authority: 38 U.S.C. 3319)


    (j) Child eligible for transferred entitlement. If a child is 
eligible for transferred entitlement under Sec.  21.9571, the beginning 
date of the award of educational assistance will be no earlier than the 
latest of the following dates--
    (1) The date the Secretary of the service department concerned 
approves the transferor to transfer entitlement;
    (2) The date the transferor completes 10 years of service in the 
Armed Forces;
    (3) The date the transferor specified in his or her designation of 
transfer;
    (4) The date the child first meets the definition of child in Sec.  
3.57 of this chapter; or
    (5) Either--
    (i) The date the child completes the requirements of a secondary 
school diploma (or equivalency certificate); or
    (ii) The date the child attains age 18.

(Authority: 38 U.S.C. 3319)


    (k) Change in active duty status. If an individual is released or 
discharged from active duty during a certified period of enrollment, VA 
will begin paying the monthly housing allowance--(1) If released or 
discharged before August 1, 2018, beginning the 1st day of the month 
following the date the individual was discharged; or (2) If released or 
discharged on or after August 1, 2018, beginning the day following the 
date the individual was discharged.
    (l) Election to receive benefits under 38 U.S.C. chapter 33. (1) If 
an individual makes an election to receive benefits under 38 U.S.C. 
chapter 33 in lieu of benefits under 10 U.S.C. chapter 106a, 1606, or 
1607, or 38 U.S.C. chapter 30 in accordance with 38 CFR 21.9520(c), VA 
will begin paying benefits under 38 U.S.C. chapter 33 effective the 
later of the following--
    (i) August 1, 2009;
    (ii) The date the individual became eligible for educational 
assistance under 38 U.S.C. chapter 33;
    (iii) One year before the date the valid election request was 
received; or
    (iv) The effective date of the election as requested by the 
claimant.
    (2) If an individual is in receipt of benefits under 38 U.S.C. 
chapter 31 during a term, quarter, or semester, and requests to begin 
receiving benefits under 38 U.S.C. chapter 33 during that term, 
quarter, or semester, VA will begin paying--
    (i) The monthly housing allowance under 38 U.S.C. chapter 33 
effective the 1st of the month following the date of the request.
    (ii) Net cost of tuition and fees, and the books and supplies 
stipend, the first day of the following term, quarter, or semester.
    (m) Fugitive felons. An award of educational assistance to an 
otherwise eligible veteran, person, or dependent of a veteran will 
begin effective the date the individual ceases to be a fugitive felon, 
as shown by evidence, which may include evidence that a warrant for an 
offense involving flight is resolved by--
    (1) Arrest;
    (2) Surrendering to the issuing authority;
    (3) Dismissal; or
    (4) Court documents (dated after the warrant for the arrest of the 
felon) showing the individual is no longer a fugitive.

(Authority: 38 U.S.C. 3323(c), 5313B)


    (n) National Guard members' retroactive beginning dates for claims 
submitted through September 30, 2012. For any claim received up until 
September 30, 2012, for retroactive benefits based on service in the 
National Guard, the beginning date of the award will be the later of 
either (1) the date the

[[Page 33707]]

National Guard member satisfied the eligibility requirements in Sec.  
21.9520 of this title, or (2) August 1, 2009.
    (o) Child eligible for the Marine Gunnery Sergeant John David Fry 
Scholarship. If a child is eligible for entitlement under Sec.  
21.9520(d), the beginning date of the award of educational assistance 
will be no earlier than the earlier of the following dates--
    (1) The date the child completes the requirements of a secondary 
school diploma (or equivalency certificate); or
    (2) The date the child attains age 18.

 (Authority: Pub. L. 111-32, 123 Stat. 1859)


0
40. Amend Sec.  21.9635 by:
0
a. Revising the section heading.
0
b. In the introductory text, removing ``The effective date'' and adding 
in its place ``During the period beginning August 1, 2009, and ending 
July 31, 2011, the effective date''.
0
c. Revising paragraphs (c), (d), and (w).
0
d. Redesignating paragraph (bb) as paragraph (cc).
0
e. Adding new paragraph (bb).
    The revisions and addition read as follows:


Sec.  21.9635  Discontinuance dates--for provisions effective before 
August 1, 2011.

* * * * *
    (c) Withdrawal or unsatisfactory completion of all courses. If the 
eligible individual, for reasons other than being called or ordered to 
active duty service, withdraws from all courses or receives all 
nonpunitive grades after the first day of the term, VA will terminate 
educational assistance as follows--
    (1) If the eligible individual withdraws from all courses after the 
school's drop/add period, and there are no mitigating circumstances, VA 
will terminate educational assistance effective the first day of the 
term from which the eligible individual withdrew.
    (2) If the eligible individual withdraws from all courses with 
mitigating circumstances; withdraws during the school's drop/add period 
or within the first 30 days of the enrollment period, whichever is 
earlier; or withdraws from all courses for which a punitive grade is or 
will be assigned, VA will terminate educational assistance for--
    (i) Residence training: effective the last date of attendance; and
    (ii) Independent study or distance learning: effective on the 
official date of change in status under the practices of the 
educational institution.
    (3) When an eligible individual withdraws from an approved 
correspondence course offered by an educational institution, VA will 
terminate educational assistance effective the date the last lesson was 
serviced.

(Authority: 38 U.S.C. 3323, 3680(a))


    (d) Reduction in the rate of pursuit of a program of education. If 
the eligible individual reduces the rate of pursuit by withdrawing from 
one or more courses in a program of education but continues training in 
one or more courses, VA will apply the provisions of this paragraph.
    (1) If the reduction in the rate of pursuit occurs other than on 
the first date of the term, VA will reduce the eligible individual's 
educational assistance effective the end of the month during which the 
reduction occurred when--
    (i) The withdrawal from one or more courses occurs during the 
school's drop/add period or within the first 30 days of the enrollment 
period, whichever is earlier; or
    (ii) A nonpunitive grade is assigned for the course from which the 
eligible individual withdraws and the withdrawal occurs with mitigating 
circumstances; or
    (iii) A punitive grade is assigned for the course from which the 
eligible individual withdraws.
    (2) VA will reduce educational assistance effective the first date 
of the enrollment in which the reduction occurs when--
    (i) The reduction occurs on the first date of the term; or
    (ii) A nonpunitive grade is assigned for the course from which the 
eligible individual withdraws, and--
    (A) The eligible individual does not withdraw because he or she is 
called to active duty service, or in the case of an individual serving 
on active duty, he or she is not ordered to a new duty location or 
assignment, or is not ordered to perform an increased amount of work, 
and
    (B) The withdrawal occurs without mitigating circumstances.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a))

* * * * *
    (w) Receipt of educational assistance allowance under another 
educational assistance program. An individual in receipt of educational 
assistance under chapter 33 who is also eligible for educational 
assistance under 10 U.S.C. chapter 106a, 1606, or 1607; 38 U.S.C. 
chapter 30, 31, 32, or 35; the Hostage Relief Act of 1980; or, 
effective August 1, 2011, 10 U.S.C. 510, may choose to receive 
educational assistance under another program.
* * * * *
    (bb) Fugitive felons. VA will not award educational assistance to 
an otherwise eligible Veteran or dependent of an otherwise eligible 
Veteran for any period during which the Veteran is a fugitive felon. 
The date of discontinuance of an award of educational assistance to a 
Veteran who is a fugitive felon or dependent of a Veteran who is a 
fugitive felon is the date of the warrant establishing that the 
individual is a fugitive felon or the date otherwise shown by evidence 
to be the date the individual became a fugitive felon.

(Authority: 38 U.S.C. 3323(c), 5313B)

* * * * *
0
41. Add Sec.  21.9636 to read as follows:


Sec.  21.9636  Discontinuance dates--for provisions effective after 
July 31, 2011.

    The effective date of a reduction or discontinuance of educational 
assistance that occurs after July 31, 2011, will be as stated in this 
section. If more than one type of reduction or discontinuance is 
involved, VA will reduce or discontinue educational assistance using 
the earliest of the applicable dates.
    (a) Death of eligible individual. (1) If the eligible individual 
receives a lump sum payment for the books and supplies stipend under 
Sec.  21.9641(d) and dies before the end of the period covered by the 
lump sum payment, the discontinuance date of educational assistance for 
the purpose of that lump sum payment will be the last date of the 
period covered by the lump sum payment.
    (2) If the educational institution receives a lump sum payment for 
tuition and fees under Sec.  21.9641(b) on behalf of an eligible 
individual and the individual dies before the end of the period covered 
by the lump sum payment, the discontinuance date for the purpose of 
that lump sum payment will be the last date of the period covered by 
the lump sum payment. The educational institution will be required to 
return to VA any portion of the tuition and fees paid by VA that would 
normally be refunded to a similarly circumstanced individual according 
to the regularly established practices of the educational institution.
    (3) If the eligible individual receives an advance payment of the 
monthly housing allowance pursuant to Sec.  21.9681(b)(2) and dies 
before the period covered by the advance payment ends, the 
discontinuance date of educational assistance shall be the last date of 
the period covered by the advance payment.
    (4) For all other payments, e.g., monthly housing allowance under 
Sec.  21.9641(c), if the eligible individual

[[Page 33708]]

dies while pursuing a program of education, the discontinuance date of 
educational assistance will be the date of death.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(d), 3680(e))


    (b) First instance of withdrawal of course. In the first instance 
of a withdrawal from a course or courses for which the eligible 
individual received educational assistance, VA will consider mitigating 
circumstances to exist with respect to the withdrawal of a course or 
courses totaling no more than six semester hours or the equivalent. In 
determining whether a withdrawal is the first instance of withdrawal, 
VA will not consider a course or courses dropped during an educational 
institution's drop-add period in accordance with Sec.  21.4200(l). If 
mitigating circumstances are considered to exist in accordance with 
this paragraph, VA will terminate or reduce educational assistance 
effective--(1) For withdrawals occurring before [EFFECTIVE DATE OF THE 
FINAL RULE] the end of the month during which the withdrawal occurred; 
(2) For withdrawals occurring on or after [EFFECTIVE DATE OF THE FINAL 
RULE], the last date of attendance.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a)(1))


    (c) Withdrawal or unsatisfactory completion of all courses. If the 
eligible individual, for reasons other than being called or ordered to 
active duty service, withdraws from all courses or receives all 
nonpunitive grades after the first day of the term, VA will terminate 
educational assistance as follows--
    (1) If the eligible individual withdraws from all courses after the 
school's drop/add period, and there are no mitigating circumstances, VA 
will terminate educational assistance effective the first day of the 
term from which the eligible individual withdrew.
    (2) If the eligible individual withdraws from all courses with 
mitigating circumstances; withdraws during the school's drop/add period 
or within the first 30 days of the enrollment period, whichever is 
earlier; or withdraws from all courses for which a punitive grade is or 
will be assigned, VA will terminate educational assistance for--
    (i) Residence training: effective the last date of attendance; and
    (ii) Independent study or distance learning: effective on the 
official date of change in status under the practices of the 
educational institution.
    (3) When an eligible individual withdraws from an approved 
correspondence course offered by an educational institution, VA will 
terminate educational assistance effective the date the last lesson was 
serviced.

(Authority: 38 U.S.C. 3323, 3680(a))


    (d) Reduction in the rate of pursuit of a program of education. If 
the eligible individual reduces the rate of pursuit by withdrawing from 
one or more courses in a program of education but continues training in 
one or more courses, VA will apply the provisions of this paragraph.
    (1) If the reduction in the rate of pursuit occurs other than on 
the first date of the term, VA will reduce the eligible individual's 
educational assistance effective either the end of the month during 
which the reduction occurred (in the case of reductions occurring 
before [EFFECTIVE DATE OF THE FINAL RULE]), or the last date of 
attendance (in the case of for reductions occurring on or after 
[EFFECTIVE DATE OF THE FINAL RULE]), when--
    (i) The withdrawal from one or more courses occurs during the 
school's drop/add period or within the first 30 days of the enrollment 
period, whichever is earlier; or
    (ii) A nonpunitive grade is assigned for the course from which the 
eligible individual withdraws and the withdrawal occurs with mitigating 
circumstances; or
    (iii) A punitive grade is assigned for the course from which the 
eligible individual withdraws.
    (2) VA will reduce educational assistance effective the first date 
of the enrollment in which the reduction occurs when--
    (i) The reduction occurs on the first date of the term; or
    (ii) A nonpunitive grade is assigned for the course from which the 
eligible individual withdraws, and--
    (A) The eligible individual does not withdraw because he or she is 
called to active duty service, or in the case of an individual serving 
on active duty, he or she is not ordered to a new duty location or 
assignment, or is not ordered to perform an increased amount of work, 
and
    (B) The withdrawal occurs without mitigating circumstances.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a))


    (e) End of course or period of enrollment. If an eligible 
individual's course or period of enrollment ends, the effective date of 
reduction or discontinuance of the individual's award of educational 
assistance will be the ending date of the course or period of 
enrollment as certified by the educational institution.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a))


    (f) Nonpunitive grade. (1) If an eligible individual does not 
officially withdraw from a particular course and the individual 
receives a nonpunitive grade for that course, VA will reduce the 
individual's educational assistance effective the first date of 
enrollment for the term in which the grade applies unless mitigating 
circumstances are found.
    (2) If an eligible individual does not officially withdraw from a 
particular course and the individual receives a nonpunitive grade for 
that course, VA will reduce the individual's educational assistance 
effective the end of the month during which the student last attended 
when mitigating circumstances are found.
    (3) If an eligible individual receives an incomplete grade for a 
course or courses, VA will delay creating an overpayment for such 
course or courses to allow the individual an opportunity to complete 
the course or courses. However, if the incomplete grade is not replaced 
with a punitive grade, VA will reduce the individual's educational 
assistance in accordance with paragraph (f)(1) or (2) of this section 
effective the earliest of--
    (i) The last date permitted by the educational institution to 
complete the course;
    (ii) The date the educational institution permanently assigns a 
nonpunitive grade;
    (iii) One year from the date the incomplete grade was assigned.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680)


    (g) Discontinued by VA. If VA discontinues payment to an eligible 
individual following procedures stated in Sec.  21.4210(d) and (g), the 
discontinuance date of payment of educational assistance will be--
    (1) The date the Director of the VA Regional Processing Office of 
jurisdiction first suspended payments provided in Sec.  21.4210, if the 
discontinuance was preceded by suspension; or
    (2) The end of the month during which VA made the decision to 
discontinue payments under Sec.  21.9630 or Sec.  21.4210(d) and (g), 
if the Director of the VA Regional Processing Office of jurisdiction 
did not suspend payments before the discontinuance.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3690)


    (h) Disapproved by State approving agency. If a State approving 
agency disapproves a program of education in which an eligible 
individual is enrolled, the discontinuance date of payment of 
educational assistance will be--

[[Page 33709]]

    (1) For a program of education at an IHL or a non-college degree 
institution, the end of the course or period of enrollment, as 
certified by the educational institution, in which the disapproval is 
effective; or
    (2) For an apprenticeship or other on-the-job training program, the 
end of the program or the end of the academic year, whichever is 
earlier, in which the disapproval is effective or in which VA receives 
notice of the disapproval, whichever is later, provided the Director of 
the VA Regional Processing Office of jurisdiction did not suspend 
payments before the disapproval.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3672(a), 3690)


    (i) Disapproval by VA. If VA disapproves a program of education in 
which an eligible individual is enrolled, the discontinuance date of 
payment of educational assistance will be--
    (1) For a program of education at an IHL or a non-college degree 
institution, the end of the course or period of enrollment, as 
certified by the educational institution, in which the disapproval is 
effective; or
    (2) For an apprenticeship or other on-the-job training program, the 
end of the program or the end of the academic year in which the 
disapproval occurred, whichever is earlier, provided that the Director 
of the VA Regional Processing Office of jurisdiction did not suspend 
payments before the disapproval.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3671(b), 3672(b)(1), 3690)


    (j) Unsatisfactory progress. If an eligible individual's progress 
is unsatisfactory, his or her educational assistance will be 
discontinued effective the earlier of the following:
    (1) The end of the month during which the educational institution 
discontinues the eligible individual's enrollment; or
    (2) The end of the month during which the eligible individual's 
progress becomes unsatisfactory according to the educational 
institution`s regularly established standards of progress, conduct, or 
attendance.

 (Authority: 38 U.S.C. 3034(a), 3323(a), 3474)


    (k) False or misleading statements. Payments may not be based on 
false or misleading statements, claims, or reports. If educational 
assistance is paid as the result of an individual submitting false or 
misleading statements, claims, or reports, VA will apply the provisions 
of Sec.  21.4006 and 21.4007 in the same manner as they apply to 
veterans under 38 U.S.C. chapter 30.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3690)


    (l) Conflicting interests (not waived). If a conflict of interest 
exists between an officer or employee of VA and an educational 
institution, or an officer or employee of a State approving agency and 
an educational institution, as provided in Sec.  21.4005, and VA does 
not grant a waiver, the discontinuance date of educational assistance 
will be 30 days after the date of the letter notifying the eligible 
individual of the conflicting interests.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3683)


    (m) Incarceration in prison or other penal institution due to 
conviction of a felony. (1) The provisions of this paragraph apply to 
an eligible individual whose educational assistance must be 
discontinued or who becomes restricted to payment of educational 
assistance at a reduced rate under Sec.  21.9676(c) (based on 
incarceration in a Federal, State, local, or other penal institution or 
correctional facility due to a felony conviction).
    (2) The discontinuance of any monthly payments will be the end of 
the month during which the eligible individual is incarcerated in a 
Federal, State, local, or other penal institution or correctional 
facility or the end date of the enrollment period as certified by the 
educational institution, whichever is earlier.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3482(g))


    (n) Change in active duty status. (1) The discontinuance date for 
an eligible individual who reduces or terminates training as a result 
of being called or ordered to serve on active duty under section 688, 
12301(a), 12301(d), 12301(g), 12302, or 12304 of title 10, U.S.C., or 
in the case of an individual serving on active duty, being ordered to a 
new duty location or assignment or to perform an increased amount of 
work is--
    (i) For tuition and fees, the last date of the certified enrollment 
period,
    (ii) For monthly housing allowance, see paragraph (2), and
    (iii) For the ``book stipend,'' the last date of the period covered 
by the book stipend payment.
    (2) If an individual enters active duty during a certified period 
of enrollment, regardless of whether there is a reduction or 
termination of training, the discontinuance date for the monthly 
housing allowance will be--(A) For entry occurring before August 1, 
2018, the end of the month during which the individual entered active; 
(B) For entry occurring on or after August 1, 2018, the date of entry 
onto active duty.

(Authority: 38 U.S.C. 3313(j))


    (o) Exhaustion of entitlement. (1) If an individual enrolled in an 
educational institution that regularly operates on the quarter or 
semester basis exhausts his or her entitlement under 38 U.S.C. chapter 
33, the discontinuance date will be the last day of the quarter or 
semester in which the entitlement is exhausted.
    (2) The ending date for an individual enrolled in a course that is 
not scheduled on a quarter or semester basis, who exhausts his or her 
entitlement under 38 U.S.C. chapter 33 after he or she has completed 
more than half of the course, will be the earlier of the following--
    (i) The last day of the course, or
    (ii) 12 weeks from the day the entitlement is exhausted.
    (3) If an individual enrolled in a course that is not scheduled on 
a quarter or semester basis exhausts his or her entitlement under 38 
U.S.C. chapter 33 before the individual has completed more than half of 
the course, the effective ending date will be the date the entitlement 
was exhausted.

(Authority: 38 U.S.C. 3031(f), 3312, 3321)


    (p) End of period of eligibility. If an eligible individual is 
enrolled in an educational institution on the date of expiration of his 
or her period of eligibility as determined under Sec.  21.9530, the 
effective ending date will be the day preceding the end of the period 
of eligibility.

(Authority: 38 U.S.C. 3321)


    (q) Required verifications not received after certification of 
enrollment. (1) If VA does not receive the required verification of 
attendance in a timely manner for an eligible individual enrolled in a 
course or courses at an educational institution in a program of 
education not leading to a standard college degree, VA will terminate 
payments effective the last date of the last period for which 
verification of the eligible individual's attendance was received. If 
VA later receives the verification, VA will make any adjustment on the 
basis of the facts found.
    (2) If VA does not receive verification of enrollment within 60 
days of the first day of the term, quarter, semester, or course for 
which the advance payment was made, VA will determine the actual facts 
and make an adjustment, if required. If the eligible individual failed 
to enroll, VA will terminate the award of educational assistance 
effective the beginning date of the enrollment period.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680)


    (r) Administrative or payee error. (1) When an administrative error 
or error in judgment by VA, the Department of

[[Page 33710]]

Defense, or the Department of Homeland Security with respect to the 
Coast Guard when it is not operating as a service in the Navy, is the 
sole cause of an erroneous award, the award will be reduced or 
terminated effective the date of last payment.
    (2) When a payee receives an erroneous award of educational 
assistance as the result of providing false information or withholding 
information necessary to determine eligibility to the award, the 
effective date of the reduction or discontinuance will be the effective 
date of the award, or the day before the act, whichever is later. The 
date of the reduction or discontinuance will not be before the last 
date on which the individual was entitled to payment of educational 
assistance.

(Authority: 38 U.S.C. 3323(c), 5112(b), 5113)


    (s) Forfeiture for fraud. If an eligible individual must forfeit 
his or her educational assistance due to fraud, the ending date of 
payment of educational assistance will be the later of--
    (1) The effective date of the award; or
    (2) The day before the date of the fraudulent act.

(Authority: 38 U.S.C. 3323(c), 5112, 6103)


    (t) Forfeiture for treasonable acts or subversive activities. If an 
eligible individual must forfeit his or her educational assistance due 
to treasonable acts or subversive activities, the ending date of 
payment of educational assistance will be the later of--
    (1) The effective date of the award; or
    (2) The day before the date the individual committed the 
treasonable act or subversive activities for which the individual was 
convicted.

(Authority: 38 U.S.C. 3323(c), 6104, 6105)


    (u) Change in law or VA issue or interpretation. If there is a 
change in the applicable law or VA issue, or in VA's application of the 
law or issue, VA will use the provisions of Sec.  3.114(b) of this 
chapter to determine the ending date of the eligible individual's 
educational assistance.

(Authority: 38 U.S.C. 3323(c), 5112, 5113)


    (v) Reduction following the loss of increase (``kicker'') for 
Selected Reserve service. If an eligible individual is entitled to an 
increase (``kicker'') in the monthly rate of educational assistance due 
to service in the Selected Reserve and loses that entitlement, the 
effective date for the reduction in the monthly rate payable is the 
date that the Secretary of the military department concerned determines 
that the eligible individual is no longer eligible to the increase 
(``kicker'').

(Authority: 10 U.S.C. 16131; 38 U.S.C. 3316(a))


    (w) Receipt of educational assistance allowance under another 
educational assistance program. An individual in receipt of educational 
assistance under chapter 33 who is also eligible for educational 
assistance under 10 U.S.C. chapter 106a, 1606, or 1607; 10 U.S.C. 510; 
38 U.S.C. chapter 30, 31, 32, or 35; or the Hostage Relief Act of 1980 
may choose to receive educational assistance under another program.
    (1) VA will terminate educational assistance under 38 U.S.C. 
chapter 33 effective the first day of the enrollment period during 
which the individual requested to receive educational assistance under 
10 U.S.C. chapter 106a, 1606, or 1607; 10 U.S.C. 510; 38 U.S.C. chapter 
30, 32, or 35; or the Hostage Relief Act of 1980.
    (2) For individuals in receipt of benefits under this chapter 
during a term, quarter, or semester who are requesting to receive 
benefits under 38 U.S.C. chapter 31, VA will terminate educational 
assistance under this chapter effective the first day of the subsequent 
enrollment period.
    (3) An eligible individual may only request a change in receipt of 
benefits from 38 U.S.C. chapter 33 to 38 U.S.C. chapter 31 once per 
term, quarter, or semester.

(Authority: 38 U.S.C. 3322(a))


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0154.)


    (x) Independent study course loses accreditation. If the eligible 
individual is enrolled in a course offered in whole or in part by 
independent study, and the course loses its accreditation (or the 
institution of higher learning offering the course loses its 
accreditation), the date of reduction or discontinuance will be the end 
of the course or period of enrollment, as certified by the educational 
institution in which the withdrawal of accreditation occurred.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3676, 3680A(a))


    (y) Dependent exhausts transferred entitlement. The ending date of 
an award of educational assistance to a dependent who exhausts the 
entitlement transferred to him or her is the date he or she exhausts 
the entitlement.

(Authority: 38 U.S.C. 3319)


    (z) Transferor revokes transfer of entitlement. If the transferor 
revokes a transfer of unused entitlement, the date of discontinuance 
for the dependent's entitlement is the effective date of the revocation 
of transfer as determined under Sec.  21.9571.

(Authority: 38 U.S.C. 3319)


    (aa) Transferor fails to complete additional active duty service 
requirement. VA will discontinue each award of educational assistance 
given to a dependent, effective the first date of each such award 
when--
    (1) The transferor fails to complete the additional active duty 
service requirement that afforded him or her the opportunity to 
transfer entitlement of educational assistance; and
    (2) The military department discharges the transferor for a reason 
other than one of the reasons stated in Sec.  21.9571(l).

(Authority: 38 U.S.C. 3319)


    (bb) Fugitive felons. VA will not award educational assistance to 
an otherwise eligible Veteran or dependent of an otherwise eligible 
Veteran for any period during which the Veteran is a fugitive felon. 
The date of discontinuance of an award of educational assistance to a 
Veteran who is a fugitive felon or dependent of a Veteran who is a 
fugitive felon is the date of the warrant establishing that the 
individual is a fugitive felon or the date otherwise shown by evidence 
to be the date the individual became a fugitive felon.

(Authority: 38 U.S.C. 3323(c), 5313B)


    (cc) Other reasons for discontinuance. If an eligible individual's 
educational assistance must be discontinued for any reason other than 
those stated in paragraphs (a) through (bb) of this section, VA will 
determine the ending date of educational assistance based on the facts 
found.

(Authority: 38 U.S.C. 3323(c), 5112(a), 5113)

0
42. Amend Sec.  21.9640 by revising the section heading, introductory 
text, and paragraphs (a) and (d) to read as follows:


Sec.  21.9640  Rates of payment of educational assistance--for 
provisions effective before August 1, 2011.

    For training that occurs before August 1, 2011, unless otherwise 
noted, VA will determine the amount of educational assistance payable 
under 38 U.S.C. chapter 33 as provided in this section.
    (a) Percentage of maximum amounts payable. (1) Except as provided 
in paragraphs (a)(2) and (d) of this section, VA will apply the 
applicable percentage of the maximum amounts payable under this section 
for pursuit of an approved program of education, in accordance with the 
following table--

[[Page 33711]]



------------------------------------------------------------------------
                                                           Percentage of
 Aggregate length of creditable                               maximum
active duty service after 09/10/      Number of days          amounts
               01                                             payable
------------------------------------------------------------------------
At least 36 months \1\.........  If aggregate service                100
                                  (including entry
                                  training) is 1,095
                                  days or more days.
At least 30 continuous days      .......................             100
 (Must be discharged due to
 service-connected disability).
At least 30 months, but less     If aggregate service                 90
 than 36 months \1\.              (including entry
                                  training) is from 910
                                  to 1,094 days.
At least 24 months, but less     If aggregate service             \3\ 80
 than 30 months \1\ \3\.          (including entry
                                  training) is from 730
                                  to 909 days.
At least 18 months, but less     If aggregate service             \3\ 70
 than 24 months \2\ \3\.          (excluding entry
                                  training) is from 545
                                  to 729 days.
At least 12 months, but less     If aggregate service                 60
 than 18 months \2\.              (excluding entry
                                  training) is from 365
                                  to 544 days.
At least 6 months, but less      If aggregate service                 50
 than 12 months \2\.              (excluding entry
                                  training) is from 180
                                  to 364 days.
At least 90 days, but less than  If aggregate service                 40
 6 months \2\.                    (excluding entry
                                  training) is from 90
                                  to 179 days.
------------------------------------------------------------------------
\1\ Includes entry level and skill training.
\2\ Excludes entry level and skill training.
\3\ The 70/80% rule: If the aggregate service including training is at
  least 24 months but less than 30 months (730-909 days) BUT the
  aggregate service excluding training is at least 18 but less than 24
  months (545 to 729 days), the individual will be deemed eligible at
  the 70% benefit level. This limitation is explicitly mandated by 38
  U.S.C. 3311(e).


(Authority: 38 U.S.C. 3311, 3313)


    (2) Amounts payable for individuals eligible for the Marine Gunnery 
Sergeant John David Fry Scholarship. VA will apply 100 percent of the 
maximum amounts payable for pursuit of an approved program of education 
by an individual who is eligible for educational assistance under Sec.  
21.9520(d).
* * * * *
    (d) Amounts payable for individuals on active duty. (1) Amounts 
payable for programs of education beginning on or after August 1, 2009, 
and on or before March 4, 2011. Individuals on active duty who are 
pursuing a program of education during a quarter, semester, or term 
that starts during the period beginning August 1, 2009, and ending 
March 4, 2011, may receive a lump sum amount for established charges 
paid directly to the institution of higher learning for the entire 
term, quarter, or semester, as applicable. The amount payable will be 
the lowest of--
    (i) The established charges that similarly circumstanced 
nonveterans enrolled in the individual's program of education would be 
required to pay;
    (ii) That portion of the established charges not covered by 
military tuition assistance under 10 U.S.C. 2007(a) or (b) for which 
the individual has stated to VA that he or she wishes to receive 
payment;
    (iii) The lesser amount of paragraph (d)(i) or (ii) of this 
section, divided by the number of days in the individual's quarter, 
semester, or term, as applicable, to determine the individual's daily 
rate which will then be multiplied by the individual's remaining months 
and days of entitlement to educational assistance in accordance with 
Sec. Sec.  21.4020 and 21.9635(o);
    (2) Amounts payable for a program of education, on more than half-
time basis, leading to a degree and beginning after March 4, 2011, but 
before August 1, 2011. (i) VA may, on behalf of an individual on active 
duty who is pursuing a program of education leading to a degree on more 
than half-time basis at a public IHL, issue a lump sum payment for the 
term, quarter, or semester directly to the IHL equal to the applicable 
percentage (as listed in paragraph (a) of this section) of the net cost 
for in-State tuition and fees.
    (ii) VA may, on behalf of an individual on active duty who is 
pursuing a program of education leading to a degree on more than half-
time basis at a non-public or foreign IHL, issue a lump sum payment for 
the term, quarter, or semester directly to the IHL equal to the lesser 
of the applicable percentage (as listed in paragraph (a) of this 
section) of the net cost for tuition and fees assessed by the 
institution or--
    (A) For the academic year beginning August 1, 2011, $17,500;
    (B) For the academic year beginning on any subsequent August 1, the 
amount for the previous academic year, as increased under 38 U.S.C. 
3015(h).

(Authority: 38 U.S.C. 501(a), 3313(e))


    (3) Amounts payable for a program of education, on a half-time 
basis or less, leading to a degree and beginning after March 4, 2011, 
but before August 1, 2011. Amounts payable for the individual will be 
calculated in accordance with paragraph (d)(1) of this section.
    (4) Amounts payable for a program of education not leading to a 
degree and beginning after March 4, 2011, but before August 1, 2011. 
Amounts payable for the individual will be calculated in accordance 
with paragraph (d)(1) of this section.

(Authority: 38 U.S.C. 3313, 3323(c))


0
43. Add Sec.  21.9641 to read as follows:


Sec.  21.9641  Rates of payment of educational assistance--for 
provisions effective after July 31, 2011.

    For training that begins after July 31, 2011, unless otherwise 
noted, VA will determine the amount of educational assistance payable 
under 38 U.S.C. chapter 33 as provided in this section.
    (a) Percentage of maximum amounts payable. (1) Except as provided 
in paragraph (a)(2) of this section, VA will apply the applicable 
percentage of the maximum amounts payable under this section for 
pursuit of an approved program of education, in accordance with the 
following table--

[[Page 33712]]



------------------------------------------------------------------------
                                                           Percentage of
 Aggregate length of creditable                               maximum
active duty service after 09/10/      Number of days          amounts
               01                                             payable
------------------------------------------------------------------------
At least 36 months \1\.........  If aggregate service                100
                                  (including entry
                                  training) is 1,095
                                  days or more days.
At least 30 continuous days....  .......................             100
(Must be discharged due to
 service-connected disability).
At least 30 months, but less     If aggregate service                 90
 than 36 months \1\.              (including entry
                                  training) is from 910
                                  to 1,094 days.
At least 24 months, but less     If aggregate service             \3\ 80
 than 30 months \1\ \3\.          (including entry
                                  training) is from 730
                                  to 909 days.
At least 18 months, but less     If aggregate service             \3\ 70
 than 24 months \2\ \3\.          (excluding entry
                                  training) is from 545
                                  to 729 days.
At least 12 months, but less     If aggregate service                 60
 than 18 months \2\.              (excluding entry
                                  training) is from 365
                                  to 544 days.
At least 6 months, but less      If aggregate service                 50
 than 12 months \2\.              (excluding entry
                                  training) is from 180
                                  to 364 days.
At least 90 days, but less than  If aggregate service                 40
 6 months \2\.                    (excluding entry
                                  training) is from 90
                                  to 179 days.
------------------------------------------------------------------------
\1\ Includes entry level and skill training.
\2\ Excludes entry level and skill training.
\3\ The 70/80% rule: If the aggregate service including training is at
  least 24 months but less than 30 months (730-909 days) BUT the
  aggregate service excluding training is at least 18 but less than 24
  months (545 to 729 days), the individual will be deemed eligible at
  the 70% benefit level. This limitation is explicitly mandated by 38
  U.S.C. 3311(e).

    (2) Amounts payable for individuals eligible for the Marine Gunnery 
Sergeant John David Fry Scholarship. VA will apply 100 percent of the 
maximum amounts payable for pursuit of an approved program of education 
by an individual who is eligible for educational assistance under Sec.  
21.9520(d).

(Authority: 38 U.S.C. 3311(f))


    (b) Tuition and fees payable. (1) Program of education leading to a 
degree at public IHLs. After July 31, 2011, VA may, on behalf of an 
individual, who may be either on active duty or not on active duty and 
pursuing a program of education leading to a degree at a public IHL, 
issue a lump sum payment for the term, quarter, or semester directly to 
the IHL equal to the applicable percentage (as listed in paragraph (a) 
of this section) of the net cost for in-State tuition and fees.

(Authority: 38 U.S.C. 3313(c)(1)(A)(i))


    (2) Program of education leading to a degree at non-public IHLs or 
foreign IHLs. (i) After July 31, 2011, VA may, on behalf of an 
individual, who may be either on active duty or not on active duty and 
pursuing a program of education leading to a degree at a non-public or 
foreign IHL, issue a lump sum payment for the term, quarter, or 
semester directly to the IHL equal to the applicable percentage (as 
listed in paragraph (a) of this section) of the lesser of--
    (A) The actual net cost for tuition and fees assessed by the 
institution; or
    (B) For the academic year beginning August 1, 2011, $17,500; or
    (C) For the academic year beginning on any subsequent August 1, the 
amount for the previous academic year, as increased under 38 U.S.C. 
3015(h).

(Authority: 38 U.S.C. 3313(c)(1)(A)(ii))


    (3) Program of education in pursuit of a certificate or other non-
college degree at institutions other than IHLs. On or after October 1, 
2011, VA may, on behalf of an individual pursuing a program of 
education in pursuit of a certificate or other non-college degree at an 
institution other than an IHL, issue a lump sum payment for the term, 
quarter, or semester, directly to the educational institution equal to 
the applicable percentage (as listed in paragraph (a) of this section) 
of the lesser of--
    (i) The actual net cost for in-State tuition and fees assessed by 
the institution; or
    (ii) For the academic year beginning August 1, 2011, $17,500; or
    (iii) For the academic year beginning on any subsequent August 1, 
the amount for the previous academic year, as increased under 38 U.S.C. 
3015(h).

 (Authority: 38 U.S.C. 3313(g)(3)(A))


    (4) Full-time program of apprenticeship or other on-the-job 
training at institutions other than IHLs. No tuition and fee amount is 
payable for this type of training.

(Authority: 38 U.S.C. 3313(g)(3)(B))


    (5) Program of education for flight training (regardless of the 
institution providing such program of education). After September 30, 
2011, upon receipt of certification for training completed by the 
individual and serviced by the educational institution, on behalf of an 
individual pursuing a program of education consisting of flight 
training, VA may issue a lump sum payment directly to the educational 
institution equal to the applicable percentage (as listed in paragraph 
(a) of this section) of the lesser of--
    (i) The actual net cost for in-State tuition and fees, or
    (ii) For the academic year beginning August 1, 2011, $10,000;
    (iii) For the academic year beginning on any subsequent August 1, 
the amount for the previous academic year, as increased under 38 U.S.C. 
3015(h).

(Authority: 38 U.S.C. 3313(g)(3)(C))


    (6) Program of education pursued exclusively by correspondence at 
an IHL or institution other than an IHL. After September 30, 2011, on 
behalf of an individual pursuing program of education by correspondence 
at an IHL or institution other than an IHL, VA may issue a quarterly 
payment on a pro rata basis for the lessons completed by the individual 
and serviced by the educational institution during such quarter, 
directly to the educational institution equal to the applicable 
percentage (as listed in paragraph (a) of this section) of the lesser 
of--
    (i) The net cost for tuition and fees, or
    (ii) For the academic year beginning August 1, 2011, $8,500; or
    (iii) For the academic year beginning on any subsequent August 1, 
the amount for the previous academic year, as increased under 38 U.S.C. 
3015(h).

(Authority: 38 U.S.C. 3313(g)(3)(D))


    (7) No reduction in tuition and fee annual cap. VA will not make a

[[Page 33713]]

reduction in the tuition and fee maximum amount payable during the 
academic year equal to the amount of tuition and fees charged for a 
course or courses from which the individual withdrew when the 
individual--
    (i) Had to discontinue the course or courses as a result of being 
ordered to--
    (A) Active duty service under 10 U.S.C. 688, 12301(a), 12301(d), 
12301(g), 12302, or 12304; or
    (B) A new duty location or assignment or to perform an increased 
amount of work; and
    (ii) Did not receive credit or lost training time for any portion 
of the period of enrollment in the course or courses for which the 
eligible individual was pursuing to complete his or her approved 
educational, professional, or vocational objective as a result of 
having to discontinue pursuit.

(Authority: 38 U.S.C. 501(a), 3323(c))


(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0154, 2900-0178, 2900-0162, 2900-0353, and 2900-0576.)


    (c) Monthly housing allowance payable. An individual who is 
pursuing a program of education leading to a degree at a domestic or 
foreign IHL, a program of education at a non-college degree 
institution, or an on-the-job or apprenticeship training can receive a 
monthly stipend (referred to as the ``monthly housing allowance''), 
subject to the applicable percentage (as listed in paragraph (a) of 
this section), as follows--
    (1) Residence training at domestic IHLs on more than half-time 
basis. An individual, other than one on active duty, who is pursuing a 
program of education with at least one in-residence course and who has 
a rate of pursuit of greater than 50 percent at an IHL located in a 
State, may receive a monthly housing allowance for each month (or 
prorated amount for a partial month) of training during each term, 
quarter, or semester, equal to--
    (i) During the period beginning August 1, 2011, and ending July 31, 
2012, the monthly amount of the basic allowance for housing payable 
under 37 U.S.C. 403 for a member with dependents in pay grade E-5 using 
the ZIP code area in which all, or a majority, of the IHL in which the 
individual is enrolled is located multiplied by the lesser of--
    (A) 1.0, or
    (B) The individual's rate of pursuit, rounded to the nearest tenth.
    (ii) On or after August 1, 2012, the monthly amount of the basic 
allowance for housing payable under 37 U.S.C. 403 for a member with 
dependents in pay grade E-5 using the ZIP code or location code, 
whichever is applicable, in which all, or a majority, of the 
institution in which the individual is enrolled is located multiplied 
by the lesser of--
    (A) 1.0, or
    (B) The individual's rate of pursuit, rounded to the nearest tenth.

(Authority: 38 U.S.C. 3313(c)(1)(B)(i))


    (2) Residence training at foreign IHLs on more than half-time 
basis. On or after August 1, 2011, an individual, other than one on 
active duty, who is pursuing a program of education leading to a degree 
at a foreign IHL with at least one in-residence course and who has a 
rate of pursuit of greater than 50 percent, may receive a monthly 
housing allowance for each month (or prorated amount for a partial 
month) of training during each term, quarter, or semester, equal to the 
national average of the monthly amount of the basic allowance for 
housing payable under 37 U.S.C. 403 for a member with dependents in pay 
grade E-5, multiplied by the lesser of--
    (i) 1.0, or
    (ii) The individual's rate of pursuit, rounded to the nearest 
tenth.

(Authority: 38 U.S.C. 3313(c)(1)(B)(ii))


    (3) Residence training at non-college degree institutions on more 
than half-time basis. After October 1, 2011, an individual, other than 
one on active duty, who is pursuing a program of education at a non-
college degree institution (other than those listed in paragraph (c)(6) 
of this section) with at least one in-residence course and who has a 
rate of pursuit of greater than 50 percent, can receive a monthly 
housing allowance for each month (or a prorated amount for a partial 
month) of training pursued. The amount will be calculated in accordance 
with paragraph (c)(1) of this section.

(Authority: 38 U.S.C. 3313(g)(3)(A)(ii))


    (4) Training pursued solely via distance learning on more than 
half-time basis. After September 30, 2011, an individual, other than 
one on active duty, who is pursuing a program of education solely via 
distance learning at a rate of pursuit of greater than 50 percent, can 
receive a monthly housing allowance for each month (or prorated amount 
for a partial month) of training during each term, quarter, or 
semester, equal to 50 percent of the amount payable under paragraph 
(c)(2) of this section.

(Authority: 38 U.S.C. 3313(c)(1)(B)(iii))


    (5) On-the-job and apprenticeship training on full-time basis. 
After September 30, 2011, an individual, other than one on active duty, 
pursuing a full-time program of apprenticeship or other on-the-job 
training may receive a monthly housing allowance--
    (i) During the first 6-month period of the program, the monthly 
amount of the basic allowance for housing payable under 37 U.S.C. 403 
for a member with dependents in pay grade E-5 residing in the military 
housing area that encompasses all or a majority portion of the ZIP code 
area in which the employer is located.
    (ii) During the second 6-month period of the program, 80 percent of 
the amount payable in paragraph (i) of this paragraph.
    (iii) During the third 6-month period of the program, 60 percent of 
the amount payable in paragraph (i) of this paragraph.
    (iv) During the fourth 6-month period of the program, 40 percent of 
the amount payable in paragraph (i) of this paragraph.
    (v) During any month after the first 24 months of training, 20 
percent of the amount payable in paragraph (i) of this paragraph.
    (vi) In any month in which an individual pursuing training fails to 
complete 120 hours of training, the amount of the monthly housing 
stipend payable will be the amount determined by multiplying the 
applicable amount as determined by paragraphs (5)(i) through (5)(v) of 
this section by the figure determined as follows--
    (A) The number of hours worked during the month, rounded to the 
nearest 8 hours; then
    (B) Dividing the result by 120.
    (C) Rounding the quotient to the nearest hundred.

(Authority: 38 U.S.C. 3313(g)(3)(B)(i))


    (6) Program of education for vocational flight training at 
institutions other than IHLs; Program of education pursued exclusively 
by correspondence; Program of education pursued on a half-time basis or 
less; Program of education pursued while on active duty. No monthly 
housing allowance is payable for these types of training.

(Authority: 38 U.S.C. 3313(e), (f), (g)(3)(C), (g)(3)(D))


    (7) Rate payable during the academic year. The monthly housing 
allowance payable during each academic year beginning on August 1 of a 
calendar year under paragraphs (c)(1) through (c)(5) of this section 
will be determined using the basic allowance for housing rates payable 
under 37 U.S.C. 403 in effect as of January 1 of each such calendar 
year.

(Authority: 38 U.S.C. 3313(i))



[[Page 33714]]


    (8) Rate protection. The monthly housing allowance payable under 
paragraphs (c)(1) through (c)(5) of this section will not decrease as 
long as the individual--
    (i) Has not had a break in training that exceeds 6 months. An 
individual called to active duty (during an enrollment period or 6-
month grace period) will not see a decrease as long as the individual 
resumes training at the educational institution within 6 months from 
the release from active duty; and
    (ii) Previously received the monthly housing allowance based on the 
same type of training (residence, distance, foreign) at the same 
educational institution. A change in facility (transferring to a 
different school or a different branch of the same school) constitutes 
a change in educational institution.

(Authority: 38 U.S.C. 501(a), 3323(c))


    (9) Concurrent eligibility for more than one monthly housing 
stipend rate. In the event that an individual is concurrently eligible 
for more than one monthly housing stipend rate, the housing stipend 
will be paid at the highest rate for which the individual qualifies.

(Authority: 38 U.S.C. 501(a), 3323(c))


    (d) Books, supplies, and equipment stipend payable. An individual 
who is pursuing a program of education at an IHL, non-college degree 
institution, or an individual pursuing on-the-job or apprenticeship 
training can receive an amount for books, supplies, equipment, and 
other educational costs (referred to as the ``book stipend''), subject 
to the applicable percentage (as listed in paragraph (a) of this 
section), as follows--
    (1) Book stipend for training pursued at an IHL. (i) The maximum 
amount payable to an individual pursuing training at an IHL is based on 
pursuit of twenty-four credit hours (the minimum number of credit hours 
generally considered to be full-time training at the undergraduate 
level for an academic year). The lump sum payment for each term, 
quarter, or semester is equal to $41.67 ($1,000 divided by 24 credit 
hours) multiplied by the number of credit hours (or the equivalent 
number of credit hours if enrollment is reported in clock hours) taken 
by the individual in the quarter, semester, or term, up to a cumulative 
total of twenty-four credit hours for the academic year.
    (A) Before October 1, 2011, an eligible individual, other than one 
on active duty, may receive an amount for each credit hour pursued up 
to twenty-four credit hours (or the equivalent credit hours if 
enrollment is reported in clock hours) in a single academic year.
    (B) On or after October 1, 2011, an eligible individual, including 
an individual on active duty, may receive an amount for each credit 
hour pursued up to twenty-four credit hours (or the equivalent credit 
hours if enrollment is reported in clock hours) in a single academic 
year.
    (ii) In no event may the amount paid during an academic year exceed 
$1,000.
    (2) Book stipend for training pursued at a non-college-degree 
institution and on-the-job or apprenticeship training. After September 
30, 2011, an individual pursuing a program of education at a non-
college degree institution (other than those listed in paragraph (d)(3) 
of this section) or full-time on-the-job or apprenticeship training can 
receive a lump sum payment equal to $83 for each month (or a prorated 
amount for a partial month) of training pursued.

(Authority: 38 U.S.C. 3313(g)(3)(A), (B))


    (3) Program of education for vocational flight training at 
institutions other than IHLs and program of education pursued 
exclusively by correspondence. No book stipend is payable for these 
types of training.

(Authority: 38 U.S.C. 3313(c),(e),(f),(g))


    (e) Publication of educational assistance rates. VA will publish 
the maximum amount of tuition and fees payable each academic year in 
the ``Notices'' section of the Federal Register and on the GI Bill 
website at http://www.GIBill.va.gov.

(Authority: 38 U.S.C. 3313, 3323(c))


0
44. Amend Sec.  21.9645 by revising paragraphs (a)(1)(iii), (b)(1)(ii), 
and (c) to read as follows:


Sec.  21.9645  Refund of basic contribution to chapter 30.

    (a)(1) * * *
    (iii) He or she is a member of the Armed Forces who is making 
contributions as provided in Sec.  21.7042(g) towards educational 
assistance under 38 U.S.C. chapter 30.
* * * * *
    (b) * * *
    (1) * * *
    (ii) 36 for individuals making contributions towards educational 
assistance under 38 U.S.C. chapter 30 in accordance with Sec.  
21.7042(g).
* * * * *
    (c) Timing of payment. The amount payable under this section will 
only be issued to the individual who made the contribution when the 
individual is in receipt of the monthly housing allowance payable under 
Sec.  21.9640(b) or Sec.  21.9641(c) at the time his or her entitlement 
exhausts. No payment will be made if the individual who made the 
contributions is not in receipt of a monthly housing allowance when 
entitlement exhausts.
* * * * *
0
45. Amend Sec.  21.9650 by revising paragraphs (a)(2), (b)(2)(ii), 
(b)(3), (c)(2)(ii), and (c)(3) to read as follows:


Sec.  21.9650  Increase in educational assistance.

* * * * *
    (a) * * *
    (2) The increase (``kicker'') amount payable under paragraph (a)(1) 
of this section will only be paid to the individual as part of the 
monthly housing allowance if the individual is entitled to receive a 
monthly housing allowance during the term, quarter, or semester--
    (i) For the period beginning August 1, 2009, and ending July 31, 
2011, under Sec.  21.9640(b)(1)(ii) or (b)(2)(ii), or
    (ii) For the period after July 31, 2011, under Sec.  21.9641(c).

(Authority: 38 U.S.C. 3015(d)(1), 3313(c), 3316(a))


    (b) * * *
    (2) * * *
    (ii)(A) For training pursued during the period beginning August 1, 
2009, and ending July 31, 2011, the full-time training amount under 
paragraph (b)(2)(i) of this section multiplied by the individual's rate 
of pursuit.
    (B) For training pursued after July 31, 2011, the full-time 
training amount under paragraph (b)(2)(i) of this section multiplied by 
the lesser of--
    (1) 1.0, or
    (2) The individual's rate of pursuit, rounded to the nearest 
multiple of 10.
    (3) The increase (``kicker'') amount payable under paragraph (b) of 
this section will be paid to the individual--
    (i) As a lump sum for the entire quarter, semester, or term, as 
applicable, based on the monthly amount to which the individual was 
entitled at the time of the election of chapter 33, if training is 
pursued during the period beginning August 1, 2009, and ending July 31, 
2011; or
    (ii) On a monthly basis, for training pursued after July 31, 2011.

(Authority: 38 U.S.C. 3015(d), 3316; Pub. L. 110-252, 122 Stat. 
2378, Pub. L. 111-377, 124 Stat. 4119)


    (c) * * *
    (2) * * *
    (ii)(A) For training pursued during the period beginning August 1, 
2009, and ending July 31, 2011, the full-time training amount under 
paragraph (c)(2)(i) of this section multiplied by the individual's rate 
of pursuit.

[[Page 33715]]

    (B) For training pursued after July 31, 2011, the full-time 
training amount under paragraph (c)(2)(i) multiplied by the lesser of--
    (1) 1.0, or
    (2) The individual's rate of pursuit, rounded to the nearest 
multiple of 10.
    (3) The increase (``kicker'') amount payable under paragraph (c) of 
this section will be paid to the individual--
    (i) As a lump sum for the entire quarter, semester, or term, as 
applicable, based on the monthly amount to which the individual was 
entitled at the time of the election of chapter 33, if training is 
pursued during the period beginning August 1, 2009, and ending July 31, 
2011; or
    (ii) On a monthly basis, for training pursued after July 31, 2011.

(Authority: 10 U.S.C. 16131(i); 38 U.S.C. 3316; Pub. L. 110-252, 122 
Stat. 2378; Pub. L. 111-377, 124 Stat. 4119)

Sec.  21.9655  [Amended]

0
46. Amend Sec.  21.9655, in paragraph (a)(2), by removing ``or 
(b)(2)(ii)'' and adding in its place ``, (b)(2)(ii), or Sec.  
21.9641(c)''.
0
47. Amend Sec.  21.9665 by revising the section heading and 
introductory text to read as follows:


Sec.  21.9665  Reimbursement for licensing or certification tests--for 
provisions effective before August 1, 2011.

    An eligible individual is entitled to receive reimbursement for 
taking one approved licensing or certification test during the period 
beginning August 1, 2009, and ending July 31, 2011. The amount of 
educational assistance VA will pay as reimbursement for an approved 
licensing or certification test is the lesser of the following:
* * * * *
0
48. Add Sec.  21.9667 to read as follows:


Sec.  21.9667  Reimbursement for licensing or certification tests--for 
provisions effective after July 31, 2011.

    An individual eligible for benefits under the Post-9/11 GI Bill is 
entitled to receive reimbursement for taking any number of approved 
licensing or certification tests after July 31, 2011. The amount of 
reimbursement VA will pay for an approved licensing or certification 
test taken after July 31, 2011, is the least of the following:
    (a) The fee that the licensing or certification organization 
offering the test charges for taking the test;
    (b) $2,000; or
    (c) The amount equal to the number of whole months of remaining 
entitlement available to the individual at the time of payment for the 
test multiplied by the rate for one month of payment for licensing and 
tests, as specified in Sec.  21.9561(f)(1)(ii).

(Authority: 38 U.S.C. 3315)


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0695.)


0
49. Add Sec.  21.9668 to read as follows:


Sec.  21.9668  Reimbursement for national tests.

    An eligible individual is entitled to receive reimbursement for 
taking a national test for admission or a national test for credit 
after July 31, 2011. The amount of reimbursement VA will pay for an 
approved national test for admission or a national test for credit 
taken after July 31, 2011, is the lesser of the following:
    (a) The fee charged for the test, not including any optional costs 
not required for the testing process; or
    (b) The amount equal to the number of whole months of remaining 
entitlement available to the individual at the time of payment for the 
test multiplied by the rate for one month of payment for national 
tests, as specified in Sec.  21.9561(f)(1)(ii).

(Authority: 38 U.S.C. 3315A)


0
50. Amend Sec.  21.9675 by revising the section heading, introductory 
text, and paragraph (c)(2) to read as follows:


Sec.  21.9675  Conditions that result in reduced rates or no payment--
for provisions effective before August 1, 2011.

    During the period beginning August 1, 2009, and ending July 31, 
2011, the payment rates as established in Sec. Sec.  21.9640 and 
21.9655 will be reduced in accordance with this section whenever the 
circumstances described in this section arise.
* * * * *
    (c) * * *
    (2) The amount of educational assistance payable for pursuit of an 
approved program of education by an eligible individual, as described 
in this paragraph, will be--
    (i)(A) The amount equal to any portion of tuition and fees charged 
for the course that are not paid by a Federal (other than one 
administered by VA), State, or local program; plus
    (B) The amount equal to any charges to the eligible individual for 
the cost of necessary books, supplies, and equipment not to exceed 
$1,000 each academic year.
    (ii) The amounts payable under paragraph (c)(2)(i) of this section 
will be prorated based on the individual's eligibility percentage as 
determined in Sec.  21.9640(a).

(Authority: 38 U.S.C. 3034(a), 3323(a), 3482(g))


0
51. Add Sec.  21.9676 to read as follows:


Sec.  21.9676  Conditions that result in reduced rates or no payment--
for provisions effective after July 31, 2011.

    After July 31, 2011, the payment rates as established in Sec. Sec.  
21.9641 and 21.9655 will be reduced in accordance with this section 
whenever the circumstances described in this section arise.
    (a) Withdrawals and nonpunitive grades. Except as provided in this 
paragraph, VA will not pay educational assistance for an eligible 
individual's pursuit of a course from which the eligible individual 
withdraws or receives a nonpunitive grade that is not used in computing 
the requirements for graduation. VA may pay educational assistance for 
a course from which the eligible individual withdraws or receives a 
nonpunitive grade if--
    (1) The individual withdraws because he or she is ordered to 
active-duty service or, in the case of an individual serving on active 
duty, he or she is ordered to a new duty location or assignment, or 
ordered to perform an increased amount of work; or
    (2) There are mitigating circumstances, and
    (i) The eligible individual submits a description of the mitigating 
circumstances in writing to VA within one year from the date VA 
notifies the eligible individual that a description is needed, or at a 
later date if the eligible individual is able to show good cause why 
the one-year time limit should be extended to the date on which he or 
she submitted the description of the mitigating circumstances; and
    (ii) The eligible individual submits evidence supporting the 
existence of mitigating circumstances within one year of the date VA 
requested the evidence, or at a later date if the eligible individual 
is able to show good cause why the one-year time limit should be 
extended to the date on which he or she submitted the evidence 
supporting the existence of mitigating circumstances.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(a))


    (b) No monthly housing allowance for some incarcerated individuals. 
An individual who is incarcerated in a Federal, State, local, or other 
penal institution or correctional facility due to a felony conviction 
will not receive a monthly housing allowance.
    (c) Reduced educational assistance for some incarcerated 
individuals. (1) An individual who is incarcerated in a Federal, State, 
local, or other penal institution or correctional facility due to a 
felony conviction will receive--

[[Page 33716]]

    (i) The net costs for tuition and fees not paid by any other form 
of financial assistance, not to exceed the amounts specified in Sec.  
21.9641(b); and
    (ii) The amount of necessary books, supplies, and equipment not 
paid by any other form of financial assistance, not to exceed $1,000 
each academic year.
    (2) The amounts payable under paragraph (c)(1) of this section will 
be prorated based on the individual's eligibility percentage as 
determined in Sec.  21.9641(a).

(Authority: 38 U.S.C. 3034(a), 3323(a), 3482(g))


    (d) No educational assistance for certain enrollments. VA will not 
pay educational assistance for--
    (1) An enrollment in an audited course (see Sec.  21.4252(i));
    (2) A new enrollment in a course during a period when the approval 
has been suspended by a State approving agency or VA;
    (3) An enrollment in a course by a nonmatriculated student except 
as provided in Sec.  21.4252(l);
    (4) An enrollment in a course certified to VA by the individual 
taking the course;
    (5) A new enrollment in a course which does not meet the veteran-
nonveteran ratio requirement as computed under Sec.  21.4201; and
    (6) An enrollment in a course offered under contract for which VA 
approval is prohibited by Sec.  21.4252(m).

(Authority: 38 U.S.C. 501(a), 3034(a), 3323(a))


0
52. Amend Sec.  21.9680 by revising the section heading and adding 
introductory text to read as follows:


Sec.  21.9680  Certifications and release of payments--for provisions 
effective before August 1, 2011.

    For training pursued during the period beginning August 1, 2009, 
and ending July 31, 2011--
* * * * *
0
53. Add Sec.  21.9681 to read as follows:


Sec.  21.9681  Certifications and release of payments--for provisions 
effective after July 31, 2011.

    For training pursued after July 31, 2011--
    (a) Payee. (1) VA will make payment of the appropriate amount of 
tuition and fees, as determined under Sec.  21.9641, directly to the 
educational institution as a lump sum payment for the entire quarter, 
semester, or term, as applicable.
    (2) VA will make all other payments to the eligible individual or a 
duly appointed fiduciary. VA will make direct payment to the eligible 
individual even if he or she is a minor.
    (3) The assignment of educational assistance is prohibited. In 
administering this provision, VA will apply the provisions of Sec.  
21.4146 to 38 U.S.C. chapter 33.

(Authority: 38 U.S.C. 3034(a), 3313(g), 3323(a), 3680, 5301)


    (b) Payments. (1) VA will pay educational assistance for an 
eligible individual's enrollment in an approved program (other than one 
seeking tuition assistance Top-Up; one seeking reimbursement for taking 
an approved licensing or certification test; one seeking reimbursement 
for a national test for admission or a national test for credit; or one 
who qualifies for an advance payment of the monthly housing allowance) 
only after the educational institution has certified the individual's 
enrollment as provided in Sec.  21.9721 and provided its Taxpayer 
Identifying Number (TIN) and/or Automated Clearing House (ACH) 
information in accordance with section 7701(c)(1) of title 31, U.S.C .

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680(g), 3689; 31 U.S.C. 
7701(c)) (The Office of Management and Budget has approved the 
information collection provision in this section under control 
number 2900-0073).


    (2) VA will apply the provisions of this section in making advance 
payments of the monthly housing allowance to eligible individuals.
    (i) VA will make payments of the monthly housing allowance in 
advance when:
    (A) The eligible individual has specifically requested such a 
payment;
    (B) The individual is enrolled at a rate of pursuit greater than 
half-time;
    (C) The educational institution at which the eligible individual is 
accepted or enrolled has agreed to and can satisfactorily carry out the 
provisions of 38 U.S.C. 3680(d)(4)(B), (d)(4)(C), and (d)(5) pertaining 
to receipt, delivery, and return of checks, and certifications of 
delivery and enrollment;
    (D) The Director of the VA Regional Processing Office of 
jurisdiction has not acted under paragraph (b)(2)(iv) of this section 
to prevent advance payments being made to the eligible individual's 
educational institution;
    (E) There is no evidence in the eligible individual's claim file 
showing that he or she is not eligible for an advance payment;
    (F) The period for which the eligible individual has requested a 
payment is preceded by a period of nonpayment of 30 days or more.
    (G) The educational institution or the eligible individual has 
submitted the certification required by Sec.  21.9715.
    (ii) The amount of the advance payment to an eligible individual is 
the amount payable for the monthly housing allowance for the month or 
fraction thereof in which the term or course will begin plus the amount 
of the monthly housing allowance for the following month.
    (iii) VA will mail advance payments to the educational institution 
for delivery to the eligible individual. The educational institution 
will not deliver the advance payment check more than 30 days in advance 
of the first date of the enrollment period for which VA makes the 
advance payment.
    (iv) The Director of the VA Regional Processing Office of 
jurisdiction may direct that advance payments not be made to 
individuals attending an educational institution if:
    (A) The educational institution demonstrates an inability to comply 
with the requirements of paragraph (b)(2)(iii) of this section;
    (B) The educational institution fails to provide adequately for the 
safekeeping of the advance payment checks before delivery to the 
eligible individual or return to VA; or
    (C) The Director determines, based on compelling evidence, that the 
educational institution has demonstrated its inability to discharge its 
responsibilities under the advance payment program.

(Authority: 38 U.S.C. 3034, 3323, 3680)


    (3) VA will make a lump sum payment for the entire quarter, 
semester, or term:
    (i) To the educational institution, on behalf of an eligible 
individual, for the appropriate amount of tuition and fees;
    (ii) To an eligible individual for the appropriate amount for 
books, supplies, equipment, and other educational costs; and
    (iii) To an eligible individual entitled to the $500 rural 
relocation benefit.

(Authority: 38 U.S.C. 3034(a), 3313, 3318, 3323(a), 3680(f))


    (4) [Reserved]
    (5) VA will pay educational assistance to an eligible individual as 
reimbursement for taking an approved licensing or certification test 
only after the eligible individual has submitted to VA a copy of his or 
her 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;
    (ii) The name and address of the organization or entity issuing the 
license or certificate;
    (iii) The date the eligible individual took the test; and

[[Page 33717]]

    (iv) The cost of the test.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3689)


(The Office of Management and Budget has approved the information 
collection provision in this section under control numbers 2900-0695 
and 2900-0706.)


    (6) VA will pay educational assistance to an eligible individual as 
reimbursement for taking an approved national test for admission or a 
national test for credit only after the eligible individual has 
submitted a claim for the test to VA that includes the following 
information:
    (i) The name of the test;
    (ii) The name of the organization offering the test;
    (iii) The date the eligible individual took the test;
    (iv) The cost of the test; and
    (v) Such other information as the Secretary may require.

(Authority: 38 U.S.C. 3315A)


(The Office of Management and Budget has approved the information 
collection provision in this section under control numbers 2900-
0695, 2900-0698, and 2900-0706.)


    (7) Payment for temporary school closings. VA may authorize payment 
of the monthly housing allowance (as increased under Sec. Sec.  
21.9650(a) and 21.9655(a), if applicable) for a temporary school 
closing in accordance with the provisions of Sec.  21.4138(g) of this 
chapter.

(Authority: 38 U.S.C. 3680(a))


    (c) Rural relocation benefit. VA will make the $500 rural 
relocation benefit payment after--
    (1) The educational institution has certified the individual's 
enrollment as provided in Sec.  21.9721;
    (2) The individual has provided--
    (i) Request for benefit. An individual must submit a request for 
the rural relocation benefit in writing;
    (ii) Proof of residence. (A) An individual must provide proof of 
his or her place of residence by submitting any of the following 
documents bearing his or her name and current address:
    (1) DD Form 214, Certification of Release or Discharge from Active 
Duty; or
    (2) The most recent Federal income tax return; or
    (3) The most recent State income tax return; or
    (4) Rental/lease agreement; or
    (5) Mortgage document; or
    (6) Current real property assessment; or
    (7) Voter registration card.
    (B) An individual using entitlement granted under Sec.  21.9571 
who, because he or she resides with the transferor or, in the case of a 
child, a parent, who cannot provide any of the documents in paragraph 
(c)(2)(ii) of this section, may submit as proof of residence any 
document in paragraphs (c)(2)(ii)(A)(2) through (7) of this section 
bearing the name and current address of the transferor or, in the case 
of a child, a parent; and
    (C) VA must determine that the individual resided in a county (or 
similar entity utilized by the Bureau of the Census) with less than 
seven persons per square mile based on the most recent decennial census 
prior to relocation.
    (iii) Proof of relocation. An individual must provide proof that he 
or she either: (A) physically relocated at least 500 miles, confirmed 
by means of a commonly available internet search engine for mapping 
upon entering the individual's resident address provided in paragraph 
(c)(2)(ii) of this section as the beginning point and the address of 
the educational institution as the ending point; or (B) traveled by air 
to physically attend an institution of higher learning for pursuit of 
such a program of education because the individual could not travel to 
the educational institution by land due to the absence of road or other 
infrastructure. An individual must provide airline receipts for travel 
with a departure and destination airport within reasonable distance 
from the home of residence and the educational institution.

(Authority: 38 U.S.C. 3318)


    (d) Apportionments prohibited. VA will not apportion educational 
assistance.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3680)


    (e) Accrued benefits. Educational assistance remaining due and 
unpaid on the date of the individual's death is payable under the 
provisions of Sec.  3.1000 of this chapter.

(Authority: 38 U.S.C. 5121)


0
54. Amend Sec.  21.9690 by revising the section heading and adding 
introductory text to read as follows:


Sec.  21.9690  Nonduplication of educational assistance--for provisions 
effective before August 1, 2011.

    For training pursued during the period beginning August 1, 2009, 
and ending July 31, 2011--
* * * * *
0
55. Add Sec.  21.9691 to read as follows:


Sec.  21.9691  Nonduplication of educational assistance--for provisions 
effective after July 31, 2011.

    For training pursued after July 31, 2011--
    (a)(1) Nonduplication--Concurrent benefits. Except for receipt of a 
Montgomery GI Bill-Active Duty kicker provided under 38 U.S.C. 3015(d) 
or a Montgomery GI Bill-Selected Reserve kicker provided under 10 
U.S.C. 16131(i), an eligible individual is barred from receiving 
educational assistance under 38 U.S.C. chapter 33 concurrently with 
educational assistance provided under--
    (i) 10 U.S.C. 510 (National Call to Service);
    (ii) 10 U.S.C. chapter 1606 (Montgomery GI Bill--Selected Reserve);
    (iii) 10 U.S.C. chapter 1607 (Reserve Educational Assistance 
Program);
    (iv) 10 U.S.C. chapter 106a (Section 901, Educational Assistance 
Test Program);
    (v) 38 U.S.C. chapter 30 (Montgomery GI Bill--Active Duty);
    (vi) 38 U.S.C. chapter 31 (Veteran Readiness and Employment 
Program);
    (vii) 38 U.S.C. chapter 32 (Post-Vietnam Era Veterans' Educational 
Assistance);
    (viii) 38 U.S.C. chapter 35 (Survivors' and Dependents' Educational 
Assistance); or
    (ix) Hostage Relief Act of 1980.

(Authority: 38 U.S.C. 3034(a), 3322, 3323(a), 3681; section 901, 
Pub. L. 96-342)


    (2) An individual who is eligible for educational assistance under 
more than one program listed in paragraph (a)(1) of this section must 
specify in writing which benefit he or she wishes to receive. The 
eligible individual may choose to receive payment under another 
educational assistance program at any time, but may not change which 
benefit he or she will receive more than once during a term, quarter, 
or semester.

(Authority: 38 U.S.C. 3034(a), 3322, 3323(a), 3681)


    (b) Nonduplication--Federal program. Payment of educational 
assistance is prohibited to an otherwise eligible reservist--
    (1) For a unit course or courses that are being paid for entirely 
or partly by the Armed Forces during any period in which he or she is 
on active duty service; or
    (2) For a unit course or courses that are being paid for entirely 
or partly by the United States under the Government Employees Training 
Act.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3681)


    (c) Nonduplication--Transferred benefits and Fry Scholarship. An 
individual entitled to educational assistance under Sec.  21.9520(d) 
and because of a transfer of entitlement under Sec.  21.9571--

[[Page 33718]]

    (1) May not receive educational assistance under both provisions 
concurrently.
    (2) Must specify in writing the provision under which he or she 
wishes to receive benefits. The individual may request to receive 
benefits under either provision at any time, but may not change the 
provision under which he or she will receive benefits more than once 
during a term, quarter, or semester. Except in cases when an individual 
exhausts entitlement under a provision during a term, quarter, or 
semester, the request will be effective the beginning date of the 
enrollment period following the request.

(Authority: 38 U.S.C. 3322(e), 3323(c))


    (d) Nonduplication--Transferred benefits. An individual who is 
entitled to educational assistance based on a transfer of entitlement 
under Sec.  21.9571 from more than one individual--
    (i) May not receive assistance based on transfers from more than 
one individual concurrently.
    (ii) Must specify in writing whose entitlement he or she wishes to 
use at any one time. The individual may request to use benefits 
transferred to him or her by any of the transferors at any time, but 
may not change whose entitlement he or she wishes to use from one 
individual to another more than once during a term, quarter, or 
semester. Except in cases when an individual exhausts his or her 
transferred entitlement during a term, quarter, or semester, the 
request will be effective the beginning date of the enrollment period 
following the request.

(Authority: 38 U.S.C. 3322(g), 3323(c))


    (e) Nonduplication--Fry Scholarship and compensation and pension. 
The commencement of a program of education based on eligibility for 
educational assistance under Sec.  21.9520(d) by an eligible individual 
is a bar to--
    (1) Subsequent payments of dependency and indemnity compensation or 
pension based on the death of a parent to the eligible individual when 
the eligible individual attains 18 years of age.
    (2) Increased rates, or additional amounts, of compensation, 
dependency and indemnity compensation, or pension paid on account of 
the eligible individual.

(Authority: 38 U.S.C. 3322(f))


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0098.)


    (f) Nonduplication--Fry Scholarship. (1) An individual who is 
entitled to educational assistance based on the death of more than one 
parent under Sec.  21.9520(d) may not receive assistance under Sec.  
21.9520(d) for the same enrollment period based on the deaths of both 
parents.
    (2) The individual must specify in writing on which parent's death 
to base his or her entitlement. The individual may request to base 
entitlement on either parent's death at any time, but may not change on 
whose death he or she chooses to base entitlement more than once during 
a term, quarter, or semester. Except in cases where an individual 
exhausts entitlement that is based on one parent's death during a term, 
quarter, or semester, the request will be effective the beginning date 
of the enrollment period following the request.

 (Authority: 38 U.S.C. 501(a), 3323(c))


    (g) Nonduplication--Entitlement based on individual's active duty 
service. (1) An individual who is entitled to educational assistance 
under Sec.  21.9520(a) or (b) and who is entitled to educational 
assistance under Sec.  21.9520(d) or Sec.  21.9571 may not receive 
educational assistance based on his or her own period of service and 
educational assistance based on someone else's service concurrently.
    (2) The individual must specify in writing the provision under 
which he or she wishes to receive benefits. The individual may request 
to receive benefits under either provision at any time, but may not 
change the provision under which he or she will receive benefits more 
than once during a term, quarter, or semester. Except in cases when an 
individual exhausts entitlement under one provision during a term, 
quarter, or semester, the request will be effective the beginning date 
of the enrollment period following the request.

(Authority: 38 U.S.C. 501(a), 3323(c))


    (h) Nonduplication--Eligibility based on a single event or period 
of service. (1) Active duty service. (i) An individual with qualifying 
active duty service in the Armed Forces that may be used to establish 
eligibility for educational assistance under chapter 30, 32, or 33 of 
38 U.S.C., and chapter 1606 or 1607 of 10 U.S.C., must make an 
irrevocable election in writing specifying under which program to 
establish eligibility and to which program to credit service.
    (ii) An individual may not request that portions of a single period 
of service be credited to different benefit programs. VA considers a 
single period of service to be one from which the individual is 
discharged or released, including a discharge for immediate 
reenlistment.
    (2) Assistance based on parent's service. A child eligible for 
educational assistance under Sec.  21.9520(d) and chapter 35 of 38 
U.S.C., based on the parent's death must make an irrevocable election 
in writing specifying which benefit he or she wishes to receive.

(Authority: 38 U.S.C. 501(a), 3322(h))


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


0
56. Amend Sec.  21.9695 by:
0
a. In paragraph (a), removing ``institutions of higher learning'' and 
adding in its place ``educational institutions''.
0
b. Removing ``institution of higher learning'' each place it appears 
and adding in each place ``educational institution''.
0
c. Revising paragraph (b)(3).
0
d. In paragraph (b)(4)(ii)(A), removing ``established charges'' and 
adding in its place ``tuition and fees''.
    The revision reads as follows:


Sec.  21.9695  Overpayments.

* * * * *
    (b) * * *
    (3)(i) The amount of the overpayment of educational assistance paid 
to the eligible individual, or paid to the educational institution on 
behalf of the individual, constitutes a liability of the educational 
institution if:
    (A) VA determines that the overpayment is the result of willful or 
negligent false certification by the educational institution, or 
willful or negligent failure to certify excessive absences from a 
course, discontinuance of a course, or interruption of a course by the 
eligible individual.
    (B) The student never attends classes for which he or she was 
certified (regardless of the reason for non-attendance);
    (C) The student completely withdraws from all courses on or before 
the first day of the certified period of enrollment;
    (D) The student dies during the term (see Sec. Sec.  21.9635(a)(2) 
and 21.9636(a)(2));
    (E) The educational institution receives a payment for the wrong 
student;
    (F) The educational institution receives a duplicate payment for a 
student;
    (G) The educational institution receives a payment in excess of the 
amount certified to VA on the enrollment certification; or
    (H) The educational institution submits an amended enrollment

[[Page 33719]]

certification to correctly report a reduced amount of tuition and fee 
charges, reduced Yellow Ribbon Program contributions, or reduced 
amounts for both tuition and fees and Yellow Ribbon Program 
contributions.
    (ii) In determining whether an overpayment resulting from the 
actions listed in paragraph (b)(3)(i) of this section should be 
recovered from an educational institution, VA will apply the provisions 
of Sec.  21.4009 (except paragraph (a)(1)) to overpayments of 
educational assistance under 38 U.S.C. chapter 33.
* * * * *
0
57. Amend Sec.  21.9700 by:
0
a. Removing ``established charges'' each place it appears and adding in 
its place ``tuition and fees''.
0
b. Removing ``38 U.S.C. chapter 3313(c)(1)(A)'' each place it appears 
and adding in each place ``paragraphs (b) and (c) of Sec.  21.9640 and 
paragraphs (b)(1) and (b)(2) of Sec.  21.9641''.
0
c. Revising paragraph (b).
0
d. In paragraph (d)(6)(i), removing ``undergraduate'' and adding in its 
place ``certificate, undergraduate''.
0
e. In paragraph (f), removing ``school'' and adding in its place 
``IHL''.
0
f. In paragraph (g), removing ``school's'' and adding in its place 
``IHL's''.
    The revision reads as follows:


Sec.  21.9700  Yellow Ribbon Program.

* * * * *
    (b) Eligible individuals. This program is only available to 
individuals entitled to the 100-percent educational assistance rate 
(based on service requirements as shown in Sec.  21.9640(a) or Sec.  
21.9641(a), whichever is applicable) or to their designated dependents 
using entitlement transferred under Sec.  21.9570 or Sec.  21.9571, 
whichever is applicable, or effective August 1, 2018, to individuals 
using Fry Scholarship entitlement under Sec.  21.9520(d) who are 
pursuing training at an eligible IHL.
* * * * *
0
58. Revise Sec.  21.9710 to read as follows:


Sec.  21.9710  Pursuit.

    Except for an eligible individual seeking tuition assistance Top-Up 
or reimbursement for taking an approved national test for admission, a 
national test for credit, or a licensing or certification test, the 
individual's educational assistance depends upon his or her pursuit of 
a program of education.

(Authority: 38 U.S.C. 3323(c))

Sec.  21.9715  [Amended]

0
59. Amend Sec.  21.9715 by:
0
a. In the introductory text, removing ``Sec.  21.9640(b)(1)(ii) or 
(b)(2)(ii)'' and adding in its place ``Sec.  21.9640(b)(1)(ii), 
(b)(2)(ii), or Sec.  21.9641(c), whichever is applicable''.
0
b. Removing ``the institution of higher learning'' each place it 
appears and adding in each place ``the educational institution''.
0
c. In paragraph (b)(1), removing ``an institution of higher learning'' 
and adding in its place ``the educational institution''.
0
d. In paragraph (b)(2), removing ``Sec.  21.9730'' and adding in its 
place ``Sec.  21.9735''.
0
60. Amend Sec.  21.9720 by revising the section heading and the 
introductory text to read as follows:


Sec.  21.9720  Certification of enrollment--for provisions effective 
before August 1, 2011.

    For training pursued during the period beginning August 1, 2009, 
and ending July 31, 2011, an IHL must certify an eligible individual's 
enrollment before he or she may receive educational assistance, except 
as stated in Sec.  21.9680.
* * * * *
0
61. Add Sec.  21.9721 to read as follows:


Sec.  21.9721  Certification of enrollment--for provisions effective 
after July 31, 2011.

    For training pursued after July 31, 2011, an educational 
institution must certify an eligible individual's enrollment before he 
or she may receive educational assistance, except as stated in Sec.  
21.9681.
    (a) Educational institutions must certify most enrollments. VA does 
not, as a condition of advance payment, require educational 
institutions to certify the enrollments of eligible individuals who are 
seeking an advance payment (as described in Sec.  21.9715). VA does not 
require organizations or entities offering a national test for 
admission, a national test for credit, or a licensing or certification 
test to certify that the eligible individual took the test. In all 
other cases, the educational institution must certify the eligible 
individual'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 specified by the Secretary.

(Authority: 38 U.S.C. 3014(b), 3031, 3034(a), 3323(a), 3482(g), 
3680, 3687, 3689, 5101(a))


    (b) Length of the enrollment period covered by the enrollment 
certification. (1) Educational institutions that offer courses on a 
term, quarter, or semester basis will report enrollment for the term, 
quarter, semester, ordinary school year, or ordinary school year plus 
summer term. If the certification covers two or more terms, the 
educational institution will report each term, quarter, or semester 
separately.
    (2) Educational institutions organized on a year-round basis that 
do not offer courses on a term, quarter, or semester basis will report 
enrollment for the length of the course. The certification will include 
a report of the dates during which the educational institution closes 
for any intervals designated in its approval data as breaks between 
school years.
    (3) When an eligible individual enrolls in a distance learning 
program leading to a standard college degree, the institution of higher 
learning's certification will include--
    (i) The enrollment date; and
    (ii) The ending date for the period being certified. If the 
educational institution has no prescribed maximum time for completion, 
the certification must include an ending date based on the educational 
institution's estimate for completion.

(Authority: 38 U.S.C. 3034(a), 3323(a), 3684)


(The Office of Management and Budget has approved the information 
collection provision in this section under control number 2900-
0073.)

Sec.  21.9725  [Amended]

0
62. Amend Sec.  21.9725 by removing ``institution of higher learning'' 
each place it appears and adding in each place ``educational 
institution'' and by removing ``institution of higher learning's'' and 
adding in its place ``educational institution's''.


Sec.  21.9735  [Amended]

0
63. Amend Sec.  21.9735 by removing ``individuals and institutions of 
higher learning'' and adding in its place ``eligible individuals and 
educational institutions''.


Sec.  21.9740  [Amended]

0
64. Amend Sec.  21.9740 by removing ``institution of higher learning'' 
each place it appears and adding in each place ``educational 
institution'' and by removing ``institution of higher learning's'' each 
place it appears and adding in each place ``educational 
institution's''.
0
65. Amend Sec.  21.9750 by:
0
a. In paragraph (a), removing ``institution of higher learning'' and 
adding in its place ``educational institution''.
0
b. Revising paragraphs (b) introductory text and (b)(1).
    The revision reads as follows:


Sec.  21.9750  Course measurement.

* * * * *

[[Page 33720]]

    (b) Measurement of courses reported in clock hours at IHLs. (1) If 
the courses pursued at an IHL are measured in clock hours, VA will 
convert the clock hours to equivalent credit hours by--
    (i) Adding the total number of clock hours pursued during the term, 
quarter or semester;
    (ii) Dividing the sum of paragraph (b)(1) of this section by the 
total number of weeks in the term; and
    (iii) Multiplying the result of paragraph (b)(2) of this section 
rounded to the nearest 100th by--
    (A) If the educational institution measures courses using both 
credit and clock hours, the decimal determined by dividing the number 
of credit hours considered full-time at the educational institution by 
the number of clock hours considered full-time at the educational 
institution.
    (B) If the educational institution only measures courses using 
clock hours, the decimal determined by dividing 14 credit hours by the 
number of clock hours considered full-time at the educational 
institution.
* * * * *


Sec.  21.9765  [Amended]

0
66. Amend Sec.  21.9765 by removing ``institution of higher learning'' 
and adding in its place ``educational institution''.

[FR Doc. 2023-08884 Filed 5-23-23; 8:45 am]
BILLING CODE 8320-01-P