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###### Department of Defense

###### Department of Veterans Affairs

          - 38 CFR Part 21 
          - RIN 2900-AL81 

# AGENCIES:

Department of Defense and Department of Veterans Affairs. 

# ACTION:

Final rule. 

# SUMMARY:

The law provides that the Secretary of Defense shall adjust the rates of subsistence allowance and educational assistance under the Educational Assistance Test Program annually. The law further provides those rates must be adjusted based upon the average actual cost of attendance at public institutions of higher education in the 12-month period since the rates were last adjusted. After obtaining data from the Department of Education, the Department of Defense has determined that the rates for the 2003-04 academic year should be increased by 9.6 percent over the rates payable for the 2002-03 academic year. The regulations dealing with these rates are amended accordingly. 

# DATES:

*Effective Date:*                         October 25, 2004.                     

*Applicability Date:*                         The changes in rates are applied retroactively to October 1, 2003, to conform to statutory requirements. For more information concerning the applicability date, see the                         **SUPPLEMENTARY INFORMATION**                         section.                     

# FOR FURTHER INFORMATION CONTACT:

Lynn M. Nelson, Education Adviser (225C), Education Service, Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202) 273-7294. 

# SUPPLEMENTARY INFORMATION:

Section 2145 of title 10, United States Code, provides that the Secretary of Defense shall make adjustments in the amount of educational assistance offered in any academic year under the Educational Assistance Test Program and likewise, in the amount of subsistence allowance authorized under that program. This provision further requires that these adjustments will be consistent with the change in the average actual cost of attendance at public institutions of higher education over the preceding 12-month period. As required by sections 2145, 2143, and 2144 of title 10, the Department of Defense has obtained data from the Department of Education. The Department of Defense has calculated that the costs of educational assistance and subsistence allowance have each increased by 9.6 percent. Accordingly, this final rule changes 38 CFR 21.5820 and 21.5822 to reflect a 9.6 percent increase in the rates payable in the 2003-04 academic year, including changes needed to compensate for rounding. 

The Secretary of Defense delegated the authority to administer the benefit payment portion of the Educational Assistance Test Program, also known as Section 901 benefits, to the Secretary of Veterans Affairs (VA). Thus, VA regulations include the educational assistance amounts payable under the program. 

The changes set forth in this final rule are effective from the date of publication, but the changes in rates are applied from October 1, 2003, in accordance with the applicable statutory provisions discussed above. 

## Administrative Procedure Act 

Since changes made by this final rule only reflect statutory requirements and adjustments based on previously established formulas, there is a basis for dispensing with notice-and-comment and a delayed effective date under 5 U.S.C. 552 and 553. 

## Paperwork Reduction Act 

This document contains no provisions constituting a new collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). 

## Unfunded Mandates 

                    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more in any given year. This rule would have no such consequential effect on State, local, or tribal governments.                           ( print page 62210)    

## Regulatory Flexibility Act 

The Secretary of Defense and the Secretary of Veterans Affairs hereby certify that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 501-612. This final rule directly affects only individuals and does not directly affect small entities. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is exempt from the initial and final regulatory flexibility analyses requirements of sections 603 and 604. 

## Catalog of Federal Domestic Assistance 

There is no Catalog of Federal Domestic Assistance number for the program affected by this final rule.

# List of Subjects in 38 CFR Part 21

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

Anthony J. Principi, 

Secretary of Veterans Affairs. 

William J. Carr, 

Acting Deputy Under Secretary (Military Personnel Policy). 

For the reasons set out above, 38 CFR part 21, subpart H, is amended as set forth below: 

# PART 21—VOCATIONAL REHABILITATION AND EDUCATION 

# Subpart H—Educational Assistance Test Program 

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

Authority:10 U.S.C. ch.107; 38 U.S.C. 501(a), 3695, 5101, 5113, 5303A; 42 U.S.C. 2000; sec. 901, Pub. L. 96-342, 94 Stat. 1111-1114, unless otherwise noted. 

21.5820 

2. Section 21.5820 is amended by: 

a. In paragraph (b)(1), removing “2002-03” and adding, in its place, “2003-04”, and by removing “$3,849” and adding, it its place, “$4,219”. 

b. In paragraph (b)(2)(ii), removing “2002-03” and adding, in its place, “2003-04”. 

c. In paragraphs (b)(2)(ii)(A) and (b)(3)(ii)(A), removing “$427.67” and adding, in each place, “$468.78”, and by removing “$213.84” and adding, in each place, “$234.39”. 

d. In paragraphs (b)(2)(ii)(B) and (b)(3)(ii)(B), removing “$14.26” and adding, in each place, “$15.63”, and by removing “$7.13” and adding, in each place, “$7.81”. 

e. In paragraphs (b)(2)(ii)(C) and (b)(3)(ii)(C), removing “3 cents” and adding, in each place “2 cents”, and by removing “6 cents” and adding, in each place “1 cent”. 

f. In paragraph (b)(3)(ii) introductory text, removing “2002-03” and adding, in its place, “2003-04”. 

21.5822 

3. Section 21.5822 is amended by: 

a. In paragraphs (b)(1)(i) and (b)(2)(i), removing “$959” and adding, in each place, “$1,051”, and by removing “2002-03” and adding, in each place, “2003-04”. 

b. In paragraphs (b)(1)(ii) and (b)(2)(ii), removing “$479.50” and adding, in each place, “$525.50”, and by removing “2002-03” and adding, in each place, “2003-04”. 

[FR Doc. 04-23756 Filed 10-22-04; 8:45 am] 

BILLING CODE 8320-01-P