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 Department of Veterans Affairs 38 CFR Part 21
RIN 2900-AM08
 AGENCY: Department of Veterans Affairs.
 ACTION: Final rule.
 SUMMARY: By statute, the monthly rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty program must be adjusted each fiscal year. In accordance with the statutory formula, the regulations governing rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty program for Fiscal Year 2005 (October 1, 2004, through September 30, 2005) are changed to show a 2% increase in these rates.
 DATES: *Effective Date:*
                         This final rule is effective December 15, 2004. *Applicability Date:*
                         The changes in rates are applied retroactively to October 1, 2004 to conform to statutory requirements.
 FOR FURTHER INFORMATION CONTACT: Lynn M. Nelson, Education Adviser, Education Service (225C), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, telephone (202) 273-7294.


SUPPLEMENTARY INFORMATION: Under the formula mandated by 38 U.S.C. 3015(h), the Secretary must increase the full-time rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty (MGIB) program each fiscal year. For Fiscal Year (FY) 2005 the increase is 2%, which is the percentage by which the total of the monthly Consumer Price Index-W for July 1, 2003, through June 30, 2004, exceeds the total of the monthly Consumer Price Index-W for July 1, 2002, through June 30, 2003. The Veterans Benefits Act of 2003 amended 38 U.S.C. 3015(h) to provide that during FY 2005 through FY 2013, the Secretary must round down the increased rate to the next lower whole dollar. The full-time basic educational assistance rates in this document at 38 CFR 21.7136(b)(1), (c)(1), and 38 CFR 21.7137(a)(1) are rounded down to the nearest dollar. It should be noted that 2% increase does not affect all educational assistance payable under the MGIB. The 2% increase applies only to the basic educational assistance rate. The increase does not apply to additional amounts payable by the Secretary of Defense to individuals with skills or a specialty in which there is a critical shortage of personnel (so-called “kickers”). Veterans who previously had eligibility under the Veterans’ Educational Assistance program (Vietnam Era GI Bill) receive monthly payments that are in part based upon basic educational assistance and in part based upon the rates payable under the Vietnam Era GI Bill. Only that portion attributable to basic educational assistance is increased. In addition, the increase does not apply to additional amounts payable for dependents. 38 U.S.C. 3015(a) and (b) require that the Department of Veterans Affairs (VA) pay part-time students at appropriately reduced rates. Since the first student became eligible for assistance under the MGIB in 1985, VA has paid three-quarter-time students and one-half-time students at 75% and 50% of the full-time institutional rate, respectively. Students pursuing a program of education at less than one-half but more than one-quarter time have had their payments limited to 50% or less of the full-time institutional rate. Similarly, students pursuing a program of education at one-quarter time or less have had their payments limited to 25% or less of the full-time institutional rate. Changes are made consistent with the authority and formula described in this paragraph. In addition, since 38 U.S.C. 3032(c) requires that monthly rates payable to veterans in apprenticeship or other on-the-job training must be set at a given percentage of the full-time rate, the apprenticeship or on-the-job training rates have been accordingly increased effective October 1, 2004. The changes set forth in this final rule are effective from the date of publication, but the changes in the rates are applied in accordance with the applicable statutory provisions discussed above. Thus, the Department of Veterans Affairs began paying the increased rates for training pursued after September 30, 2004. Administrative Procedure Act Changes made by this final rule merely reflect statutory requirements and adjustments made based on 
                    ( print page 74978)
                    previously established formulas. Accordingly, there is a basis for dispensing with prior notice and comment and delayed effective date provisions of 5 U.S.C. 552 and 553. Paperwork Reduction Act This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). Regulatory Flexibility Act The initial and final regulatory flexibility analyses requirements of sections 603 and 604 of the Regulatory Flexibility Act, 5 U.S.C. 601-612, are not applicable to this rule, because a notice of proposed rulemaking is not required for this rule. Even so the Secretary of Veterans Affairs hereby certifies 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. This final rule directly affects only individuals and does not directly affect small entities. Therefore, this final rule is also exempt pursuant to 5 U.S.C. 605(b) from the initial and final regulatory flexibility analyses requirements of sections 603 and 604. Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before 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 (adjusted annually for inflation) in any given year. This rule would have no such effect on State, local, or tribal governments, or the private sector. Catalog of Federal Domestic Assistance Program Numbers The Catalog of Federal Domestic Assistance numbers for the program affected by this final rule is 64.124. 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 programs
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.
 For the reasons set out above, 38 CFR part 21 (subpart K) is amended as follows: PART 21—VOCATIONAL REHABILITATION AND EDUCATION Subpart K—All Volunteer Force Educational Assistance Program (Montgomery GI Bill—Active Duty)
 1.The authority citation for part 21, subpart K, continues to read as follows: Authority:
                        38 U.S.C. 501(a), chs. 30, 36, unless otherwise noted. 2.Section 21.7136 is amended by: a.Removing paragraphs (b)(4) through (b)(9), and (c)(4) through (c)(9). b.Revising paragraphs (b)(1), (b)(2), (b)(3), (c)(1), (c)(2), and (c)(3). The revisions read as follows: § 21.7136
  
 (b) 
                            *Rates*. (1) Except as elsewhere provided in this section or in § 21.7139, the monthly rate of basic educational assistance payable for training that occurs after September 30, 2004, to a veteran whose service is described in paragraph (a) of this section, is the rate stated in the following table: Training
Monthly rateFull time
$1004.003/4
                                     time
753.001/2
                                     time
502.00Less than 
                                    1/2
                                     but more than 
                                    1/4
502.001/4
                                     time
251.00
 38 U.S.C. 3015 (2) If a veteran's service is described in paragraph (a) of this section, the monthly rate of basic educational assistance payable to the veteran for pursuit of apprenticeship or other on-the-job training that occurs after September 30, 2004, is the rate stated in the following table: Training period
Monthly rateFirst six months of training
$753.00Second six months of training
552.20Remaining pursuit of training
351.40
 38 U.S.C. 3015 3032(c) (3) If a veteran's service is described in paragraph (a) of this section, the monthly rate of basic educational assistance payable to the veteran for pursuit of a cooperative course is $1004.00 for training that occurs after September 30, 2004. (Authority: 38 U.S.C. 3015.) (c) * * * (1) Except as elsewhere provided in this section or in § 21.7139, the monthly rate of basic educational assistance payable to a veteran for training that occurs after September 30, 2004 is the rate stated in the following table: Training
Monthly rateFull time
$816.003/4
                                     time
612.001/2
                                     time
408.00Less than 
                                    1/2
                                     but more than 
                                    1/4
408.001/4
                                     time or less
204.00
 38 U.S.C. 3015 (2) The monthly rate of basic educational assistance payable to a veteran for pursuit of apprenticeship or other on-the-job training that occurs after September 30, 2004 is the rate stated in the following table: Training period
Monthly rateFirst six months of training
$612.00Second six months of training
448.80Remaining pursuit of training
285.60
 38 U.S.C. 3015 3032(c) (3) The monthly rate of basic educational assistance payable to a veteran for pursuit of a cooperative course is $816.00 for training that occurs after September 30, 2004. 38 U.S.C. 3015
 3.Section 21.7137 is amended by: a.Removing paragraphs (a)(4) through (a)(9). b.Revising paragraphs (a)(1), (a)(2), (a)(3), and (c). The revisions read as follows: § 21.7137
 38 U.S.C. chapter 34
 (a) Minimum rates. (1) Except as elsewhere provided in this section, the monthly rate of basic educational assistance for training that occurs after September 30, 2004 is the rate stated in the following table: 
                            ( print page 74979) Training
Monthly rateNo dependents
One 
                                     dependent
Two 
                                     dependents
Additional for each additional dependentFull time
$1,192.00
$1,228.00
$1,259.00
$16.003/4
                                     time
894.50
921.00
944.50
12.001/2
                                     time
596.00
614.00
629.50
8.50Less than 
                                    1/2
                                     but more than 
                                    1/4
                                     time
596.00
596.00
596.00
01/4
                                     time or less
298.00
298.00
298.00
0
 38 U.S.C. 3015 (2) For veterans pursuing apprenticeship or other on-the-job training, the monthly rate of basic educational assistance for training that occurs after September 30, 2004 is the rate stated in the following table: Training
Monthly rateNo dependents
One 
                                     dependent
Two 
                                     dependents
Additional for each additional dependent1st six months of pursuit of program
$855.75
$868.13
$879.00
$5.252nd six months of pursuit of program
608.58
617.93
625.63
3.853rd six months of pursuit of program
375.20
381.33
386.05
2.45Remaining pursuit of program
363.30
369.08
374.33
2.45
 38 U.S.C. 3015 (3) The monthly rate of basic educational assistance payable to a veteran who is pursuing a cooperative course after September 30, 2004, is the rate stated in the following table: Monthly rateNo dependents
One dependent
Two dependents
Additional for each additional dependent$1192.00
$1228.00
$1259.00
$16.00
 38 U.S.C. 3015 
 (c) 
                            *Rates for servicemembers*. The monthly rate of basic educational assistance for a servicemember may not exceed the lesser of the following rates (except as provided in paragraph (d) of this section): (1) The monthly pro-rated cost of the course. (2) The following monthly rates for training that occurs after September 30, 2004— (i) $1,192.00 for full-time training; (ii) $894.50 for three-quarter-time training; (iii) $596.00 for one-half-time training and training that is less than one-half-time training but more than one-quarter-time training; and (iv) $298.00 for one-quarter-time training. 38 U.S.C. 3015


[FR Doc. 04-27474 Filed 12-14-04; 8:45 am] BILLING CODE 8320-01-P