**CONTENTS**

**CHAPTER 1. GENERAL**

**SUBCHAPTER I. CHAPTER 32**

PARAGRAPH PAGE

1.01 General 1-1

1.02 Definitions 1-1

1.03 Participation Requirements 1-3

1.04 Eligibility - Individuals Not on Active Duty 1-4

1.05 Eligibility - Individuals on Active Duty 1-5

1.06 Election of Benefits Between Chapters 32 and 34 1-6

1.07 Election of Benefits Between Chapters 32 and 106 1-6

1.08 Determining Entitlement 1-6

1.09 Charging Entitlement 1-8

1.10 Delimiting Date and Delimiting Date Extensions 1-10

1.11 Computing Benefit Payments 1-10

1.12 Requirements and Comparability 1-12

**SUBCHAPTER II. SECTION 903**

1.13 General 1-\[13\]

1.14 Eligibility - Individuals Not on Active Duty 1-\[13\]

1.15 Eligibility - Individuals on Active Duty 1-14

1.16 Eligibility - Dependents 1-14

1.17 Determining Entitlement 1-\[14\]

1.18 Charging Entitlement 1-\[14\]

1.19 Delimiting Date and Delimiting Date Extensions 1-\[14\]

1.20 Computing Benefit Payments 1-\[14\]

1.21 Requirements and Comparability 1-15

**CHAPTER 1. GENERAL**

**SUBCHAPTER I. CHAPTER 32**

**1.01 GENERAL**

**a. General.** This subchapter covers the unique features of chapter 32
of title 38, U.S. Code, including eligibility, entitlement, and periods
of eligibility. See subsequent chapters in this part for detailed
implementing procedures.

**b. Purpose of Benefit.** Chapter 32 (the Post-Vietnam Era Veterans\'
Educational Assistance Program (VEAP)) provides educational assistance
to those persons who entered the Armed Forces during the period after
December 3l, l976, and before July 1, 1985. The purpose of VEAP is to
assist veterans and servicepersons in obtaining an education they might
not otherwise be able to afford, and to promote and assist the all
volunteer military program of the United States by attracting qualified
persons to serve in the Armed Forces.

**c. Contributions**

\(1\) VEAP is a voluntary contributory matching program. Each person who
entered on active duty during the period shown above must have initially
enrolled in (i.e., began making contributions to) the chapter 32 program
before April 1, 1987.

\(2\) Contributions accumulate from servicepersons electing to
participate in the program with the government matching those
contributions on a two-for-one basis. The Secretary of Defense may
choose to contribute a \"kicker\" as deemed necessary to encourage
persons to enter or remain in the Armed Forces.

\(3\) The individual service departments are responsible for processing
any applications to start, stop, or change a serviceperson\'s
contributions to the chapter 32 program while on active duty. DOD
(Department of Defense) transfers contribution figures and other
identifying data on participants to VA by computer tapes. VA extracts
the data from those tapes and establishes a contributions account (i.e.,
a banking record) on Target for each participant. See part II,
chapter 3, for a description of the Target screens that record this
data.

**1.02 DEFINITIONS**

The following unique definitions are from 38 CFR 21.5021 and apply to
the chapter 32 program:

**a. Active Duty** - means full-time duty in the Armed Forces or
full-time duty as a commissioned officer of the regular or Reserve Corps
of the Public Health Service or of the National Oceanic and Atmospheric
Administration. It does not include any period during which an
individual:

\(1\) Was assigned full-time by the Armed Forces to a civilian
institution for a course of education which was substantially the same
as established courses offered to civilians.

\(2\) Served as a cadet or midshipman at one of the service academies.

\(3\) Served under the provisions of section 511(d) of title 10,
U.S. Code, pursuant to an enlistment in the military reserve or national
guard.

\(4\) Served in an excess leave without pay status.

\(5\) Served in a status specified in 38 CFR 3.15.

**b. Participant** - means a person who is participating in the
education benefits program established under chapter 32. This includes:

\(1\) A person who has enrolled in and is making contributions by
monthly payroll deduction to the \"fund.\"

\(2\) Those individuals who have contributed to the \"fund\" and have
not disenrolled (i.e., users or potential users of benefits).

\(3\) A person who has enrolled in and is having contributions to the
\"fund\" made for him or her by the Secretary of Defense (see subch. II
regarding sec. 903).

\(4\) A person who has made a lump-sum contribution to the \"fund\" in
lieu of or in addition to monthly contributions deducted from his or her
military pay.

\(5\) Those individuals who have contributed to the \"fund\" and:

\(a\) Have been automatically disenrolled because they did not use their
entitlement within 10 years following discharge (see 38 CFR
21.5060(b)(3)),

\(b\) Whose funds have been transferred to the Treasury Department
because they did not apply for a refund of contributions after
disenrollment (see 38 CFR 21.5064(b)(4)(iii)), or

\(c\) Who are found to have qualified for an extended period of
eligibility due to disability (see 38 CFR 21.5042).

**c. Fund** - means that trust fund account established to maintain
dollar contributions of the participant (and any DOD contributions).

**d. Suspends** - means a participant stops contributing to the \"fund\"
(temporarily or permanently).

**e. Disenrolls** - means a participant terminates participation and
forfeits any entitlement to benefits except for a refund of
contributions previously made.

**f. Hardship or other good reasons** - means circumstances considered
to be such by DOD and VA when referring to suspension or disenrollments,
such as illness of the participant or a member of his or her immediate
family, unexpected personal expense, etc.

*NOTE: The cross references to 38 CFR 3.1 through 3.59 in the
subparagraphs below refer to compensation and pension regulations.*

**g. Spouse** - means a person of the opposite sex who is the wife or
husband of the participant, and whose marriage to the participant meets
the requirements of 38 CFR 3.1(j).

**h. Surviving Spouse** - means a person of the opposite sex who is a
widow or widower of the participant, and whose marriage to the
participant meets the requirements of 38 CFR 3.1(j) or 3.52.

**i. Child**

\(1\) For the purposes of 38 CFR 21.5067(a) (determining entitlement to
accrued benefits or to the chapter 32 death benefit) this term means a
natural child, stepchild, or adopted child of the participant regardless
of age or marital status.

\(2\) For all other purposes, this term means a person whose
relationship to the participant meets the requirements of 38 CFR 3.57 or
3.58.

**j. Parent** - means a person whose relationship to the participant
meets the requirements of 38 CFR 3.59.

**1.03 PARTICIPATION REQUIREMENTS**

**a. Minimum Period of Participation (38 CFR 21.5052(a)).** Each
individual who agrees to participate in the chapter 32 program must do
so for a minimum period of 12 consecutive months, unless he or she:

\(1\) Is allowed to disenroll for hardship reasons;

\(2\) Is permitted to suspend participation for hardship reasons;

\(3\) Is discharged or released from active duty;

\(4\) Otherwise ceases to be legally eligible to participate; or

\(5\) Elects to make a lump-sum contribution which, when taken together
with all contributions, equals 12 months of contributions.

**b. Amount of Monthly Contribution (38 CFR 21.5052(b)).** The
individual must specify the amount of the monthly contribution to the
chapter 32 fund.

\(1\) The contribution must be at least \$25 per month but not more than
\$100 per month.

\(2\) The contribution must be evenly divisible by five.

**c. Amount of Total Contribution (38 CFR 21.5052(c)).** An individual
may contribute for the number of months required to reach a total
contribution of [\$2,700]{.underline} which is the maximum amount anyone
may contribute to the fund.

**d. Changing the Monthly Contribution (38 CFR 21.5052(d)).** An
individual may increase or decrease the amount of the monthly
contribution. However, the individual may not do so more than once a
month.

**e. Prohibition Against Contributing (38 CFR 21.5052(e)).** An
individual may not make contributions to the fund after the date of
discharge. A person who returns a refund check remains continuously
eligible for benefits.

**f. Additional Participation Rules.** VA regulations contain a
considerable number of additional participation rules:

\(1\) Application Requirements for Participation - 38 CFR 21.5050.

\(2\) Lump-sum Contributions - 38 CFR 21.5052(f).

\(3\) Dates of Participation - 38 CFR 21.5054.

\(4\) Resumption of Participation - 38 CFR 21.5058.

\(5\) Disenrollment - 38 CFR 21.5060.

*NOTE: Public Law 101-16, enacted on March 22, 1991, provides that
automatic disenrollment described in this regulation be deferred until 1
year following the end of the 10-year delimiting period.*

\(6\) Date of Disenrollment - 38 CFR 21.5062.

\(7\) Refund Upon Disenrollment - 38 CFR 21.5064.

\(8\) Refunds Without Disenrollment - 38 CFR 21.5065.

\(9\) Suspension of Participation - 38 CFR 21.5066.

**g. Death of the Participant**

\(1\) If an individual dies, VA will pay the amount of unused
contributions to the individual\'s survivor or survivors (38 CFR
21.5067(a)).

\(2\) Educational assistance remaining due and unpaid at the time of the
individual\'s death may be paid as accrued benefits (38 CFR 3.1000). For
the purposes of accrued benefits under chapter 32, the payment will
include the deceased individual\'s contributions as well as
contributions made by the government (38 CFR 21.5067(c)).

\(3\) See chapter 7 for death refund procedures and part IV, chapter 11,
for accrued benefit procedures.

**1.04 ELIGIBILITY - INDIVIDUALS NOT ON ACTIVE DUTY**

**a. General.** Basic eligibility for an individual not on active duty
is based upon the following conditions (see 38 CFR 21.5040):

\(1\) The individual must have entered on active duty after
December 31, l976, and before July 1, 1985.

\(2\) The individual must not have had basic eligibility under chapter
34 of title 38, U.S. Code, except as provided in 38 CFR 21.5040(g). (See
par. 1.06 below regarding elections between chs. 32 and 34.)

\(3\) The individual must have contributed money to the chapter 32 fund
while in service and must have money available for benefits.

\(a\) The individual must have enrolled in the chapter 32 program before
April 1, 1987.

\(b\) An individual who received a refund of chapter 32 contributions or
who suspended contributions can reopen the account at any time before
separation from service, provided he or she initially enrolled in the
chapter 32 program before April 1, 1987.

\(4\) The individual must have been released or discharged from active
duty under conditions other than dishonorable from any period of service
upon which eligibility is based.

\(5\) The individual must have served for a continuous period of l8l
days or more, exclusive of deductible time (see pt. III, ch. 3). If the
individual served less than l8l days, he or she must have been released
or discharged because of a service-connected disability (see
38 CFR 3.315(c)).

\(6\) VA will consider that the individual has an unconditional
discharge or release if he or she was eligible for complete separation
from active duty on the date the discharge was issued, or the provisions
of 38 CFR 3.13(c) are met.

**b. Minimum Active-Duty Requirement.** In addition to the requirements
in subparagraph a above, in some cases the individual must have
completed either 24 continuous months of active duty (exclusive of
deductible time) or the full period for which he or she was called or
ordered to active duty, whichever is less. This condition applies to

individuals who originally enlisted after September 7, l980, and to
officers or enlistees who entered on active duty after October l6, l98l.
The minimum active-duty service requirement of 24 months does
[not]{.underline} apply to a individual who:

\(1\) Was discharged or released from active duty under l0 U.S.C. 1171
(early-out discharge), l0 U.S.C. 1173 (hardship discharge), or for
disability incurred in or aggravated in line of duty; or

\(2\) Has a compensable service-connected disability; or

\(3\) Entered on active duty after October l6, l98l, and had previously
completed a continuous period of active duty of at least 24 months or
had been discharged or released from that period of service under l0
U.S.C. 1171. (See par. 3.05 regarding identification of individuals who
qualify with less than 24 months of active duty.)

**c. Elementary or Secondary School Training.** To qualify for an
elementary or secondary education program, the individual must have
served as an [enlisted]{.underline} person. These programs are not
available based on service as an officer.

**1.05 ELIGIBILITY - INDIVIDUALS ON ACTIVE DUTY**

**a. Individuals on Active Duty Who Are Training in Other Than an
Elementary or Secondary Education Program.** Basic eligibility for
chapter 32 education benefits for an individual on active duty (other
than for an elementary or secondary education program) is based upon the
following conditions:

\(1\) The individual must have entered on active duty after
December 3l, l976, and before July 1, 1985.

\(2\) The individual must have served for a continuous period of l8l
days or more, exclusive of deductible time (see pt. III, ch. 3), after
December 31, 1976.

\(3\) The individual must have completed the lesser of the following two
periods:

\(a\) The first obligated period of active duty which began after
December 31, 1976, or

\(b\) The period of active duty which began after December 31, 1976, and
which is six years in length.

\(4\) If the individual originally enlisted after September 7, 1980, he
or she must have completed 24 months of the original enlistment.

\(5\) The individual must have contributed money to the chapter 32 fund
and must meet the following conditions:

\(a\) The individual must have at least 3 months of contributions
available for benefits.

\(b\) The individual must have agreed either to have a monthly deduction
from his or her military pay, or must have made a lump-sum contribution,
or both, so as to satisfy the minimum contribution requirement of 12
months described in paragraph 1.03a.

**b. Individuals on Active Duty Who Are Training in Elementary or
Secondary Education Programs.** Basic eligibility for an individual on
active duty who is training in an elementary or secondary education
program is based upon the rules stated in subparagraphs a(1), (2), and
(4) above and the following conditions:

\(1\) The individual must be an enlisted member of the Armed Forces,

\(2\) The individual must be a participant, and

\(3\) The individual must be training during the last 6 months of the
first period of active duty or any time thereafter.

**1.06 ELECTION OF BENEFITS BETWEEN CHAPTERS 32 AND 34**

**a. Right to Elect Chapter 32.** Certain veterans with chapter 34
eligibility may elect benefits under chapter 32 (see 38 CFR 21.5040(g)).
To qualify for an election, the individual must:

\(1\) Have served a period of [active duty for training]{.underline} of
at least 181 consecutive days. At least one day of the 181 consecutive
days of active duty for training must have occurred before January 1,
1977.

\(2\) Have served on [active duty]{.underline} for a period of at least
1 year after December 31, 1976 so that the [active duty for
training]{.underline} is the sole reason for the veteran\'s potential
eligibility under chapter 34.

\(3\) Never have received chapter 34 benefits.

\(4\) Otherwise have basic eligibility to chapter 32 benefits.

\(5\) Not be on active duty.

*NOTE: Such elections may be made now if necessary to establish chapter
32 eligibility.*

**b. Election Irrevocable With One Exception.** If an individual makes
an election to receive chapter 32 benefits and negotiates a benefit
check under chapter 32, the election is [irrevocable]{.underline}
provided the individual was informed of the following:

\(1\) The effect of eligibility under chapter 34;

\(2\) The effect of eligibility under chapter 32 (upon waiver of
chapter 34 eligibility); and

\(3\) The irrevocable nature of an election.

*NOTE: An individual who received chapter 34 benefits may
[not]{.underline} subsequently elect chapter 32 under any
circumstances.*

**c. Eligibility for Other Education Benefits After Election.** An
individual\'s previous election between chapters 32 and 34 does not
preclude eligibility for education benefits under another provision of
the law.

**1.07 ELECTION OF BENEFITS BETWEEN CHAPTERS 32 AND 106**

An individual who is a member of the Selected Reserve may not earn
entitlement under chapters 32 and 106 based upon the same period of
Selected Reserve duty classified for DOD and VA purposes as active duty.
The individual must elect whether the period of such active duty is to
be credited to chapter 32 or chapter 106.

**1.08 DETERMINING ENTITLEMENT**

**a. Entitlement Based on Monthly Contributions.** (See 38 CFR 21.5052.)
Chapter 32 entitlement is based on contributions. This entitlement is
maintained in both months and dollar amounts:

\(1\) Months of entitlement are based on the number of months that the
participant contributed rather than on the length of service. One month
of entitlement is credited for each month the participant contributes,
up to a maximum of 36 months. Although contributions can be made during
as many as 108 months, entitlement cannot exceed 36 months.

\(2\) The dollar amount of entitlement is based on the total amount of
money contributed by the participant and government matching funds at
the rate of \$2 for every \$1 contributed by the participant
[plus]{.underline} any DOD contributions (\"kickers\"). All participant
contributions must be divisible by 5 and must be in monthly amounts of
at least \$25 but not more than \$100. The maximum amount of participant
contributions that a serviceperson may contribute is \$2,700.

[EXAMPLE]{.underline}: A participant contributes \$50 per month for l2
months for a total of \$600 in participant contributions. DOD
contributes a \$200 \"kicker.\"

Months of entitlement = 12

Dollars of entitlement = \$ 600 (participant contributions)

\$ 1,200 (government matching funds)

[+ \$ 200]{.underline} (DOD contribution (\"kicker\"))

\$ 2,000

**b. Entitlement Based on Lump-Sum Contributions.** If an individual
elects to make a lump-sum contribution, VA will credit the individual
with 1 month of entitlement for:

\(1\) Every \$100 included in the lump sum; or

\(2\) Every amount included in the lump sum which:

\(a\) Is at least \$25 but no more than \$100;

\(b\) Is evenly divisible by five; and

\(c\) Is specifically designated by the individual at the time of the
contribution.

**c. Entitlement Based on Both Monthly and Lump-Sum Contributions.** If
the individual makes both monthly and lump-sum contributions, VA will:

\(1\) Compute the entitlement due to each type of contribution
separately as shown in subparagraphs a and b above; and

\(2\) Combine the result of the computations to determine the
individual\'s total entitlement.

[EXAMPLE]{.underline}: A participant contributes \$50 per month for l2
months for a total of \$600 in participant contributions. DOD
contributes a \$200 \"kicker.\" The individual also makes a lump-sum
contribution of \$2,100. The lump-sum contribution of \$2,100 is
equivalent to 21 months of contributions at \$100 per month.

Months of entitlement = 12

Dollars of entitlement = \$ 600 (participant contributions)

\$ 1,200 (government matching funds)

[+ \$ 200]{.underline} (DOD contribution (\"kicker\"))

\$ 2,000

Months of entitlement = 21

Dollars of entitlement = \$ 2,100 (participant lump-sum contribution)

[+ \$ 4,200]{.underline} (government matching funds)

\$6,300

Months of entitlement = 33 (21 months + 12 months)

Dollars or entitlement = \$ 2,000 (total based on monthly contributions)

[+\$ 6,300]{.underline} (total based on lump-sum contribution)

\$ 8,300

The veteran is entitled to education benefits totaling \$ 8,300. See
paragraph 1.11 for computing benefit payments.

**d. Extensions of Entitlement Prohibited.** No extension to either
months or dollars of entitlement is allowable. Entitlement will not
exceed 36 months or its equivalent in part-time training (38 CFR
21.5071(c)(2)).

**e. Limit if More Than One Benefit Used.** The total entitlement to
education benefits for those having eligibility under two or more VA
education programs may not exceed 48 months. The programs referred to
are:

\(1\) The World War II and Korean Conflict GI Bills.

\(2\) Chapters 30, 31, 32, 34, and 35 of title 38.

\(3\) Chapters 106 and 107 of title 10, U.S. Code.

*NOTE: Chapter 107 is also referred to as section 901 of Public Law
96-342.*

\(4\) Section 903 of Public Law 96-342.

\(5\) The Hostage Relief Act of 1980.

\(6\) The Antiterrorism Act of 1986.

**1.09 CHARGING ENTITLEMENT**

**a. General Rule.** This subparagraph gives the general rule for
charging entitlement (see 38 CFR 21.5072(a)). For a student who is
enrolled in a program other than one described in subparagraphs b
through g, VA will charge entitlement as follows:

\(1\) For a full-time student, VA will charge 1 month\'s entitlement for
each monthly benefit paid.

\(2\) For an individual who is other than a full-time student, VA will
charge 1 month for each sum of money paid equivalent to what the
individual would have been paid had he or she been a full-time student
for 1 month.

\(3\) When the computation results in a period of time other than a full
month, VA will prorate the entitlement charge.

**b. Secondary School Training.** \"Secondary school training\" refers
to courses leading to a secondary school diploma or an equivalency
certificate.

\(1\) VA will make no entitlement charge for secondary school training
for an individual whose educational assistance does not exceed the
monthly rate of the tuition and fees for the course or courses. This
rate is explained in paragraph 1.11b(1)(a).

\(2\) VA will charge entitlement for secondary school training at the
rate described in subparagraph a above, if the individual elects to
receive educational assistance at the rate for residence training
described in paragraph 1.11a below. (See 38 CFR 21.5072(b).)

**c. Correspondence and Flight Training**

\(1\) VA will charge entitlement for correspondence and flight training
on the basis of 1 month for each sum of money paid equal to the
full-time rate for institutional training. (See par. 1.11a.) When
computation results in a period of time other than a full month, the
charge will be prorated.

\(2\) If the individual is contributing to the fund while using
benefits, or if the individual subsequently makes a lump-sum
contribution, VA will not recompute the entitlement charge. For example,
if the monthly rate arrived at as shown in paragraph 1.11a below is
determined to be \$150 at the time a benefit program for correspondence
or flight training is computed, VA will charge the individual 1 month
for each \$150 paid. If a different monthly rate is computed at the time
of a subsequent payment for such training, no adjustment will be made in
the entitlement charged for the previous payments even though the value
of each month\'s entitlement may vary from payment to payment.

(See 38 CFR 21.5072(c).)

**d. Apprenticeship or Other On-the-Job Training**

\(1\) VA will charge entitlement for apprenticeship or other on-the-job
training as follows:

\(a\) 75 percent of a month for those months for which the individual\'s
monthly payment is based upon 75 percent of the monthly benefits
otherwise payable.

\(b\) 55 percent of a month for those months for which the individual\'s
monthly payment is based upon 55 percent of the monthly benefits
otherwise payable.

\(c\) 35 percent of a month for those months for which the individual\'s
monthly payment is based upon 35 percent of the monthly benefits
otherwise payable.

\(2\) The charge against the individual\'s entitlement will be prorated
in the following conditions:

\(a\) The enrollment period begins or ends in the middle of a month.

\(b\) The monthly rate is reduced in the middle of a month.

\(c\) The monthly payment is reduced because the individual worked less
than 120 hours during a particular month. The number of hours worked
will be rounded to the nearest multiple of eight. The entitlement charge
will be reduced proportionately. (See 38 CFR 21.5072(d).)

**e. Cooperative Training.**

\[(1) For cooperative training before October 9, 1996,\] VA will charge
entitlement at the rate of 80 percent of a month for each month for
which a individual is paid educational assistance allowance at the
cooperative training rate as described in paragraph 1.11. If the
individual is paid for a partial month of training, the entitlement
charge will be prorated.

\[(2) For cooperative training on or after October 9, 1996, VA will pay
benefits at 100% of the institutional rate for full-time training.\]

**f. Training While the Veteran is Incarcerated.** If payment is reduced
due to incarceration, VA will charge 1 month of entitlement for each
amount paid which is equal to 1 month of benefits based on the type of
training being pursued. (See 38 CFR 21.5072(f) and pt. IV, ch. 13,
regarding the effect of incarceration.)

**g. Tutorial Assistance**

\(1\) VA will not charge entitlement for the first \$600 of tutorial
assistance paid.

\(2\) For each amount of tutorial assistance paid in excess of \$600, VA
will charge entitlement in an amount equal to the monthly educational
assistance allowance payable for full-time training in a residence
course (see par. 1.11a). When the amount of tutorial assistance paid in
excess of \$600 is less than the monthly amount of educational
assistance allowance the individual is entitled to received, VA will
prorate the entitlement charge. (See pt. III, ch. 10, regarding
eligibility to tutorial assistance.)

**h. Entitlement Charge in Overpayment Cases.** For certain overpayment
cases where the debt is written off, VA will charge entitlement. See
part IV, chapter 13.

**1.10 DELIMITING DATE AND DELIMITING DATE EXTENSIONS**

Each veteran has l0 years within which to use benefits under chapter 32.

a\. The delimiting date is determined by adding l0 years to the day
following the date of release or discharge from the veteran\'s last
period of active duty.

b\. A delimiting date may be extended for disability and an additional
period of service. See part III, chapter 4, for a discussion of
delimiting date extension rules and procedures. (See also
38 CFR 21.5023.)

*NOTE: No final ending date has yet been established for chapter 32.*

**1.11 COMPUTING BENEFIT PAYMENTS**

**a. Payment Formulas**

\(1\) [Full-Time Institutional Monthly Rate]{.underline}. To compute the
full-time institutional monthly rate:

\(a\) Divide the participant\'s remaining contributions by the remaining
months of entitlement. The quotient is the participant portion.

\(b\) Multiply the participant portion by two. The result is the
government portion.

\(c\) Divide the remaining DOD contributions (i.e., \"kickers\") by the
remaining months of entitlement. The quotient is the DOD portion.

\(d\) Add the participant, government, and DOD portions to obtain the
full-time monthly rate.

\(2\) [Benefit Payment - IHL (Institution of Higher Learning) and NCD
(Non-College Degree)]{.underline}. To compute a benefit payment for a
given period of IHL or NCD training:

\(a\) Determine the entitlement factor for the payment period by use of
the table in part IV, chapter 14 (table 14.06a).

\(b\) Multiply the participant\'s remaining contributions by the
entitlement factor, and divide the result by the remaining months of
entitlement. The quotient is the participant portion.

\(c\) Multiply the participant portion by two. The result is the
government portion.

\(d\) Multiply the remaining DOD contributions (i.e., \"kickers\") by
the entitlement factor, and divide the result by the remaining months of
entitlement. The quotient is the DOD portion.

\(e\) Add the participant, government, and DOD portions.

\(f\) The amount of the benefit payment is the lesser of the following:

[1]{.underline}. The sum obtained in subparagraph (e) above, or

[2]{.underline}. The dollar amount of entitlement remaining.

\(3\) [Benefit Payment - Correspondence and Flight]{.underline}. The
benefit payment for flight and correspondence training will be the
amount as provided in subparagraphs (a) and (b) below or the dollar
amount of entitlement remaining, whichever is less.

\(a\) Payment for correspondence training will be 100% of the
established total charges for lessons completed.

\(b\) Payment for flight training will be 60% of the established total
charges for flight instruction completed.

*NOTE: The amount paid for correspondence and flight training may exceed
the certified charges by a few cents. This is to allow an exact
government to participant ratio of 2 to 1.*

\(4\) [Benefit Payment - Cooperative Training]{.underline}.

\[(a) For benefits before October 9, 1996, multiply the benefit payment
computed in subparagraph (2) above by .80.

\(b\) For benefits on or after October 9, 1996, use the benefit payment
computed in subparagraph (2) above.\]

\(5\) [Benefit Payment - Apprenticeship or Other On-the-Job
Training]{.underline}

\(a\) Multiply the benefit payment computed in subparagraph (2) above by
.75 if the individual is in the first 6 months training; by .55 if the
individual is in the second 6 months of training; by .35 if the
individual is in a subsequent month of training; and by a prorated
fraction if one of the individual\'s first two 6-month periods of
training ends during the benefit period.

\(b\) If the individual fails to complete 120 hours of training in a
month, reduce the benefit payment proportionately. In this calculation,
round the number of hours to the nearest multiple of eight.

\(c\) The actual benefit payment will be the amount computed as shown in
subparagraph a(5)(a) above (accounting for the failure to complete 120
hours of training per month) or the total amount of the remaining
contributions, whichever is less.

**b. Secondary School Training**

\(1\) An individual who is pursuing a course or courses leading to a
secondary school diploma or equivalency certificate may receive monthly
payment in one of two different ways.

\(a\) Unless the individual notifies VA to the contrary, VA will pay a
monthly rate which reimburses the student for the tuition and fees of
the course or courses. In this case, VA will [not]{.underline} charge
entitlement for the individual\'s high school training. The monthly rate
based on the tuition and fees may not exceed:

[1]{.underline}. \$376 for full-time training.

[2]{.underline}. \$283 for 3/4 time training.

[3]{.underline}. \$188 for 1/2 time training.

[4]{.underline}. \$94 for 1/4 time training.

\(b\) If the individual elects instead to receive benefits for high
school training at the monthly rate provided in subparagraph a(1) above,
VA will charge entitlement as described in paragraph 1.09a.

\(2\) If the individual\'s educational assistance is based on the rate
as determined in subparagraph b(1)(a) above, payment will be in a lump
sum for the term, quarter, or semester at the beginning of the month in
which training begins.

\(3\) If the individual elects to have educational assistance computed
as shown in a(1) above, payment will be made on a monthly basis like
other residence training.

**1.12 REQUIREMENTS AND COMPARABILITY**

The chapter 32 program has many features in common with other education
programs described in this manual. The following is a list of M22-4
chapters which contain substantive rules that pertain to chapter 32 as
well as to other programs. In certain instances (e.g., restrictions on
training), the rules are not exactly the same as for the other programs
and these differences are explained in the referenced chapter.

**a. Part III Chapters**

\(1\) Chapter 2 - Administrative Procedures.

\(2\) Chapter 3 - Applications.

\(3\) Chapter 4 - Extension of Delimiting Dates.

\(4\) Chapter 5 - Counseling.

\(5\) Chapter 6 - Programs of Education.

\(6\) Chapter 7 - Restrictions on Training.

\(7\) Chapter 8 - Periodic Education Certifications.

\(8\) Chapter 9 - Certificates of Eligibility and Disallowances.

\(9\) Chapter 10 - Tutorial Assistance.

**b. Part IV Chapters**

\(1\) Chapter 1 - Processing Enrollment Certifications.

\(2\) Chapter 2 - Flight and Correspondence Training.

\(3\) Chapter 3 - Duplication of Benefits.

\(4\) Chapter 4 - Changes of Program.

\(5\) Chapter 5 - Unsatisfactory Progress or Conduct.

\(6\) Chapter 6 - Measurement (Standard College Degree).

\(7\) Chapter 7 - Other Measurement Issues.

\(8\) Chapter 8 - Interval Payment.

\(9\) Chapter 10 - Advance and Special Payments.

\(10\) Chapter 11 - Reduction and Termination.

\(11\) Chapter 13 - Miscellaneous Award Issues.

**c. Part IX Chapters**

\(1\) Chapter 1 - General.

\(2\) Chapter 2 - State Approving Agencies.

\(3\) Chapter 3 - Review of Approval and Dissemination.

\(4\) Chapter 5 - Courses Approved by Other than by SAA.

\(5\) Chapter 8 - Miscellaneous Liaison Activities.

**SUBCHAPTER II. SECTION 903**

**1.13 GENERAL**

Noncontributory VEAP (sec. 903) is a modification of the chapter 32
program. Section 903 is also known as the Educational Assistance Pilot
Program.

**a. Differences Between Section 903 and Chapter 32.** This program
differs from basic VEAP in that DOD paid the participant\'s monthly
contribution (see 38 CFR 21.5292). Also, DOD allows certain participants
to transfer their entitlement to a spouse or child (see 38 CFR 21.5294).

**b. Restriction on Participation.** This program restricted
participation to certain persons enlisting or reenlisting for service on
active duty in the Army, Navy, Air Force, or Marine Corps.

**c. Effective Dates of Section 903.** The military services did not
begin offering section 903 to original enlistees until December l, l980.
The Army (the only service branch offering the program as a reenlistment
incentive) made the program available to reenlistment personnel on July
l, 1981.

**1.14 ELIGIBILITY - INDIVIDUALS NOT ON ACTIVE DUTY**

**a. General.** The individual must have enlisted for service on active
duty in the Army, Navy, Air Force, or Marine Corps after November 30,
1980, and before October 1, 1981 (or contracted under a delayed
enlistment agreement after November 30, 1980, and before October 1,
1981, and entered on active duty before October 1, 1982). (See par.
1.13c for reenlistments.)

**b. Contribution Requirements.** The service department must have made
the individual\'s contributions to the chapter 32 (sec. 903) fund, and
the money must be available for benefits. The appropriate service
department may contribute \$75 a month to a participant\'s account. The
participant is [not]{.underline} allowed to make any contributions.
Total contributions are limited to the \$2,700 maximum. The service
department may not make contributions before the month in which the
individual enlisted or reenlisted, or before December 1980, whichever is
later. The service department may also make additional contributions to
the individual\'s account in the form of \"kickers\".

**c. Service Department Requirements.** An individual selected for
participation in this program must have met all additional eligibility
requirements as established by the appropriate service department.

**d. Other Eligibility Requirements.** The eligibility requirements
stated in paragraph 1.04 apply to section 903 cases.

**1.15 ELIGIBILITY - INDIVIDUALS ON ACTIVE DUTY**

The basic requirements in paragraph 1.14a, b, and c above apply as do
the service requirements in paragraph 1.05.

**1.16 ELIGIBILITY - DEPENDENTS**

**a. General.** A participant in the section 903 program may be allowed
to transfer entitlement to a spouse or a child if the participant meets
the following conditions (see 38 CFR 21.5294):

\(1\) Reenlisted in the Army after June 30, 1981, and before
October 1, 1981;

\(2\) Possesses a critical military specialty as designated by the
Secretary of Defense; and

\(3\) Is selected for this portion of the program by the Secretary of
Defense or the appropriate designee.

**b. Rules for Entitlement Transfers.** Entitlement may be transferred
[only]{.underline} as follows:

\(1\) To a spouse or a child of the participant;

\(2\) To one person at a time;

\(3\) If the participant is not already receiving educational assistance
under section 903 for the same period.

**1.17 DETERMINING ENTITLEMENT**

See paragraph 1.08.

**1.18 CHARGING ENTITLEMENT**

See paragraph 1.09.

**1.19 DELIMITING DATE AND DELIMITING DATE EXTENSIONS**

See paragraph 1.10.

*NOTE: If a spouse or child becomes disabled, he or she cannot get a
delimiting date extension. Such extensions must be based on the
veteran\'s disability.*

**1.20 COMPUTING BENEFIT PAYMENTS**

See paragraph 1.11.

*NOTE: Under section 903, the participant\'s contributions are actually
by the appropriate service department. When reviewing paragraph 1.11
with respect to section 903, the terms \"participant contributions\" and
\"participant portion\" should be interpreted as \"contributions made by
the Service Department for the participant\" or \"Service Department
portion based on contributions made for the participant.\"*

**1.21 REQUIREMENTS AND COMPARABILITY**

**a. Refunds Not Allowed Under Section 903.** 38 CFR 21.5292(d) requires
that if a section 903 participant disenrolls, any monthly contributions
made by DOD will be returned to DOD rather than refunded to that
individual.

**b. Other Issues.** See paragraph 1.12 for references for most other
issues relevant to section 903.

**c. Dependency Issues.** See part IV, chapter 9, regarding dependency
issues which can arise under section 903.