`[Federal Register Volume 90, Number 10 (Thursday, January 16, 2025)]
[Rules and Regulations]
[Pages 5324-5358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29907]



[[Page 5323]]

Vol. 90

Thursday,

No. 10

January 16, 2025

Part IX





 Department of Veterans Affairs





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38 CFR Part 21





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

  Federal Register / Vol. 90 , No. 10 / Thursday, January 16, 2025 / 
Rules and Regulations  

[[Page 5324]]



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: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
regulations that govern VA's administration of educational assistance 
programs 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; 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.

DATES: This rule is effective March 17, 2025.

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: Under chapter 5 of title 38, United States 
Code (U.S.C.), the Secretary has the authority to prescribe rules and 
regulations which are appropriate and necessary to carry out the laws 
administered by VA. Accordingly, on May 24, 2023, VA published a 
proposed rule at 88 FR 33672 to amend its regulations to implement 
section 1002 of the Supplemental Appropriations Act, 2009 (Pub. L. 111-
32), which amended 38 U.S.C. chapter 33 to allow surviving children of 
active duty Servicemembers who died on or after September 11, 2001, to 
receive educational assistance under the Post-9/11 GI Bill (chapter 
33); the Post-9/11 Veterans Educational Assistance Improvements Act of 
2010 (Pub. L. 111-377), which amended the Post-9/11 GI Bill; six 
sections of the Harry W. Colmery Veterans Educational Assistance Act of 
2017, or Forever GI Bill (Pub. L. 115-48); and a policy change to 
address how VA manages overpayments and discontinuance dates. VA 
provided a 60-day comment period, which ended on July 24, 2023, and 
received six comments on the proposed amendments. The comments are 
addressed below.

Eligibility for Post-9/11 GI Bill Benefits and Time Limit for Transfer 
of Entitlement

    One commenter expressed the belief that all veterans--no matter the 
length of their service--should be entitled to Post-9/11 GI Bill 
benefits if they were not discharged early for disciplinary reasons. 
The commenter stated that individuals who served honorably but with 
less time in service than others are not afforded the same entitlement. 
The commenter also indicated that the rulemaking should expand the 
period individuals can transfer entitlement to their children.
    Requirements for payment of benefits are explicitly set by statute 
in 38 U.S.C. 3311 and 3313. Payment of educational assistance is based 
on the length of an individual's service as prescribed in sections 
3311(b) and 3313(c). Generally, the greater the length of service, the 
greater the payment. Additionally, the time period for transferring 
benefits is explicitly set by statute in 38 U.S.C. 3319. Under section 
3319(f) an individual may transfer entitlement only while serving in 
the Armed Forces. VA does not have authority to change statutory 
requirements through regulatory action.
    Accordingly, VA makes no changes to the rule based on these 
comments.

Expansion of Eligibility for Post-9/11 GI Bill Benefits for Individuals

    Two commenters recommended that the final rulemaking include 
revisions to allow more individuals the opportunity to obtain Post-9/11 
GI Bill educational assistance benefits. One commenter suggested that 
VA should make the process to obtain these benefits easier and another 
suggested that individuals should be eligible for Post-9/11 GI Bill 
benefits regardless of when they attend school. This rulemaking 
implements the Post-9/11 Veterans Educational Assistance Improvements 
Act of 2010, which among other things, greatly expanded the types of 
programs students may pursue under the Post-9/11 GI Bill and 
eligibility for these programs. The provisions also refine and enhance 
VA's administration of Post-9/11 GI Bill educational assistance, 
improving the efficiency to deliver these benefits to claimants. 
Implementation of these provisions, as reflected in this rulemaking, 
will make provision of benefits easier and more efficient.
    Furthermore, under current law, individuals who were discharged on 
or after January 1, 2013, may use Post 9/11 GI Bill benefits to attend 
school any time after discharge. Individuals who were discharged prior 
to that date have 15 years from the date of discharge to use their 
benefits. 38 U.S.C. 3321(a). We have been implementing this law and 
will incorporate it into our regulations in a future rulemaking.
    As such, VA makes no changes to this rule based on these comments.

Enhancement of the Definition of ``In-Residence Course'' and of an 
Attendance and Participation Requirement

    One commenter suggested strengthening the definition of what 
constitutes an ``on-site course,'' stating that educational 
institutions offering ``hybrid'' programs with only one residential 
class are actually distance-learning courses and that individuals 
enrolled in these hybrid programs should not be eligible for the 
payment of a full housing allowance when the majority of classes would 
be online and not ``on-site.'' (The commenter used the term ``on-site 
course'' to refer to what VA's regulations define as an ``in-residence 
course.'')
    According to 38 U.S.C. 3313(c)(1)(B)(i)(I), an individual who 
``pursues a [degree] program of education on more than a half-time 
basis'' is entitled to a monthly housing allowance based on ``the 
campus of the institution of where the individual physically 
participates in a majority of classes.'' However, 38 U.S.C. 
3313(c)(1)(B)(iii) expressly authorizes payment of a monthly housing 
allowance at half 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 (which we will refer to as ``the 
national average'') for ``an individual pursuing a [degree] program of 
education solely through distance learning on more than a half-time 
basis.'' (Emphasis added.) Similarly, for an individual pursuing a non-
degree program of education on a more than half-time basis, 38 U.S.C. 
3313(g)(3)(A)(ii)(I)(aa) provides a monthly housing allowance based on 
``the campus of the institution of where the individual physically 
participates in a majority of classes.'' But 38 U.S.C. 
3313(g)(3)(A)(ii)(I)(bb) authorizes payment of a monthly housing 
allowance at half that amount for ``an individual pursuing a [non-
degree] program of education through distance

[[Page 5325]]

learning'' on more than a half-time basis without specifically 
requiring that pursuit be ``solely through distance learning.'' 
(Emphasis added.)
    VA faces several challenges in interpreting these statutory 
provisions. First, aspects of the statutory language at 38 U.S.C. 
3313(g)(3)(A)(ii)(I)(bb) are unworkable as literally drafted. That 
provision calculates the monthly housing allowance for individuals 
pursuing non-degree distance-learning programs by reference to 38 
U.S.C. 3313(g)(3)(A)(ii)(I)(aa), which is based on a locality (``campus 
of the institution of where the individual physically participates in a 
majority of classes''). However, it would be impossible to apply 38 
U.S.C. 3313(g)(3)(A)(ii)(I)(bb) according to its literal terms because, 
for students in distance learning programs, there is no campus where 
the individual ``physically participates in a majority of classes.''
    Second, although 38 U.S.C. 3313(c)(1)(B)(iii) refers to ``an 
individual pursuing a program of education solely through distance 
learning'' (emphasis added) and 38 U.S.C. 3313(g)(3)(A)(ii)(I)(bb) 
refers to ``an individual pursuing a program of education through 
distance learning'' (omitting the word ``solely''), VA does not believe 
that Congress intended to attribute any significance to this omission 
because a strictly literal reading would have absurd and inequitable 
results. With respect to the specific scenario raised by the commenter, 
VA is concerned that it would be absurd and inequitable to pay the full 
housing allowance for an individual who is taking one on-site course as 
part of a degree program (and thus not ``solely'' through distance 
learning) but to pay only half the housing allowance for an individual 
who is taking one on-site course as part of a non-degree program (and 
thus also not ``solely'' through distance learning). To avoid this 
absurd and inequitable result, we have interpreted the language in 
section 3313(g)(3)(A)(ii)(I)(bb) as referring to an individual pursuing 
a non-degree program solely through distance learning, which is still 
consistent with the plain language of the statute, which refers to ``an 
individual pursuing a [non-degree] program of education through 
distance learning.''
    Taking into account both of these interpretive challenges, the VA 
has concluded that the best reading of the statute is reflected in 
Sec.  21.9641(c)(4), which provides that ``[a]fter September 30, 2011, 
an individual . . . , 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 . . . equal to 50 percent of the 
[national average].'' The interpretation reflected in this regulatory 
language best avoids absurd and illogically inequitable results. See 
Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575 (1982) 
(``interpretations of a statute which would produce absurd results are 
to be avoided if alterative interpretations consistent with the 
legislative purpose are available''). Consequently, all classes an 
individual takes must be online or otherwise characterized as distance 
learning for the individual to receive a monthly housing allowance at 
the rate of half the national average; otherwise, the individual would 
receive the full monthly housing allowance. In other words, if an 
individual takes only one ``on-site'' class, that individual could 
still be eligible for the full monthly housing allowance. Because this 
regulation reflects the best reading of the statute, it would be beyond 
our authority to pay less than the full monthly housing allowance for 
programs that include as little as one online course as it would 
require statutory rather than regulatory action.
    We recognize that Sec.  21.9641(c)(4) provides for a monthly 
housing allowance based on the national average, regardless of whether 
an individual is pursuing a degree or non-degree program. As noted 
above, Congress provided elsewhere in section 3313 for payment of the 
monthly housing allowance for distance learning based upon the national 
average. Thus, we are calculating the rate for all distance-learning 
programs in a manner that is administratively feasible and consistent 
with the statutory scheme. Also, we plan to define ``resident 
learning'' in a separate rulemaking. As such, VA makes no change based 
on this comment.
    As for the commenter's suggestion that the school attendance and 
participation requirements be enhanced, this rule makes changes that 
would ensure that an educational institution is not unjustly enriched 
by receiving payments when a student fails to attend or participate in 
class for which he or she is certified. 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. 
Revised Sec.  21.9695(b)(3) will add that an educational institution is 
also liable for an overpayment of educational assistance paid on behalf 
of an individual when a student never attends classes for which he or 
she was certified (regardless of the reason for non-attendance), or 
completely withdraws from all courses on or before the first day of the 
certified period of enrollment. These added provisions will help ensure 
VA is not paying for education that is not provided. Thus, an 
``enhanced attendance and participation requirement'' is not necessary. 
Consequently, VA makes no changes based on this comment.

Personal Claim

    One commenter referenced a personal claim and proceedings unrelated 
to this rulemaking. This comment is outside of the scope of this 
rulemaking, and VA makes no changes based on this comment.

Terminology Correction

    A commenter noted that, in proposed Sec.  21.9676(d), the usage of 
the term ``veteran-nonveteran'' is not accurate for purposes of the 85 
percent requirement in 38 CFR 21.4201(a) or 38 U.S.C. 3680A(d)(1), 
otherwise known as the ``85/15 rule.'' The commenter pointed out that 
the 85/15 rule measures the number of students using VA or 
institutional funds versus those students who do not receive assistance 
from VA or the institution; and, therefore, the correct terminology is 
``supported students versus nonsupported students'' rather than 
``veteran-nonveteran.'' VA concurs with this comment and replaces the 
term ``veteran-nonveteran'' with ``supported students versus 
nonsupported students'' in Sec.  21.9675(d)(5) and includes the term 
``supported students versus nonsupported students'' in new Sec.  
21.9676(d)(5).

Executive Orders 12866, 13563 and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
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. Executive Order 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and

[[Page 5326]]

definitions governing contemporary regulatory review established in 
Executive Order 12866 and Executive Order 13563. The Office of 
Information and Regulatory Affairs has determined that this rulemaking 
is a significant regulatory action 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 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. 601-612. Although this final rule will affect 
some small entities, such as testing organizations or educational 
institutions that qualify as ``small'' using the most recent official 
revenue standards, the economic impact on them is 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 final rule 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 final 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 Public Law 115-48, sec. 304, which increased 
the reporting fee payable to testing organizations and educational 
institutions for carrying out reporting requirements, as provided in 38 
U.S.C. 3684(c)(2), consequently further minimizing the economic impact 
on smaller educational and testing organizations. On this basis, the 
Secretary 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. 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 final rule will have no such effect 
on State, local, and Tribal governments, or on the private sector.

Paperwork Reduction Act of 1995

    This final rule includes provisions constituting a revision to 
current/valid collections of information under the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3521). The revisions also 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. VA received no comments on the revised 
collections of information.
    OMB has received the revised collections of information. OMB's 
receipt of the revised collections of information is not an approval to 
conduct or sponsor an information collection under the Paperwork 
Reduction Act of 1995. In accordance with 5 CFR part 1320, the revised 
collections of information associated with this rulemaking are not 
approved by OMB at this time. OMB's approval of the revised collections 
of information will occur within 30 days after the Final rulemaking 
publishes. If OMB does not approve the new collections of information 
as requested, VA will immediately remove the provision containing the 
related new collection of information or take such other action as is 
directed by OMB.
    The collections of information associated with this rulemaking are 
described immediately following this paragraph, under its respective 
title.

    Title: Application for Approval of an Institution of Higher 
Learning Facility; Institution of Higher Learning--Program Submission 
List; Application for Approval of Org Other Than Inst of Higher 
Learning.
    OMB Control No: 2900-0932.
    CFR Provision: 38 CFR 21.4259(b).
     Summary of collection of information: Public Law 117-333 
section 11, enacted January 5, 2023, amended 38 U.S.C. 3672, ``Approval 
of Courses''. This law required VA to create and design two new uniform 
applications and any accompanying documentation for approval of courses 
of educational programs, and for those forms to be available for use by 
October 1, 2023. These forms are completed by educational institutions, 
training establishments, and other organizations seeking approval of 
one or more programs of study for the payment of VA education benefits 
rendered to eligible beneficiaries. The institutions submit the forms 
to the State Approving Agencies (SAAs) of jurisdiction for their 
review. By law, each SAA has the authority to make such approvals in 
their respective state. VA contracts with SAAs in each state for this 
approval assessment work. There is some duplication of collection 
information found in the discontinued OMB 2900-0051 ``State Approving 
Agency Reports and Notices'' as required by 38 CFR 21.4154, 4250(b), 
21.4258 and 21.4259. However, there wasn't an official uniform 
application available for use by all stakeholders; educational 
institutions, training establishments and SAAs to ensure the 
information collected was the same based on the type of educational 
institution seeking program and course approval.
     Description of need for information and proposed use of 
information: The collection of information is necessary to ensure all 
entities have access to the same collection of information, thus making 
the approval assessment and enrollment certification process more 
efficient.
     Description of likely respondents: SAAs, educational 
institutions, and training establishments.
     Estimated total number of respondents: 8,800.
     Estimated total number of responses: 8,800.
     Estimated frequency of responses: Once.
     Estimated average burden per response: 8 total hours.
     Estimated total annual reporting and recordkeeping burden: 
VA estimates the total annual reporting and recordkeeping burden to be 
70,400 burden hours. Using the annual number of responses 8,800, VA 
estimates a total annual reporting and recordkeeping burden of 70,400 
for respondents.
     Estimated cost to respondents per year: VA estimates the 
annual cost to respondents to be $2,216,192 (70,400 respondents x 
$31.48 *)
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    Title: Dependents' Application for VA Education Benefits.

[[Page 5327]]

    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 new 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: 83,972.
     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 
48,983 burden hours. Using the annual number of responses 83,972, VA 
estimates a total annual reporting and recordkeeping burden of 48,983 
hours for respondents.
     Estimated cost to respondents per year: VA estimates the 
annual cost to respondents to be $1,982,578.92 (83,972 respondents per 
year x 45 minutes per application)/60 x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    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 new 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 
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.
     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 $2,440 (310 respondents per year x 15 
minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    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 new 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.
     Estimated total number of responses: 12,630.
     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 $99,398 (12,630 responses per year x 
15 minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    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 new 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.
     Estimated total number of responses: 23,400.
     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 $368,316 (23,400 responses per year x 
30 minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the

[[Page 5328]]

Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    Title: Certification of Lessons Completed.
    OMB Control No: 2900-0353.
    CFR Provision: 38 CFR 21.9641(b)(6).
     Summary of collection of information: The new collection 
of information in proposed 38 CFR 21.9641(b)(6) would 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.
     Estimated total number of responses: 616.
     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 $3,232 (616 responses per year x 10 
minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    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 new 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.
     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 $118 (75 responses per year x 3 
minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    Title: VA Enrollment Certification.
    OMB Control No: 2900-0073.
    CFR Provision: 38 CFR 21.9681(b)(1) and 21.9721.
     Summary of collection of information: The new 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: 1,266,616.
     Estimated total number of responses: 3,799,847.
     Estimated frequency of responses: On occasion. (3 
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 
633,307 burden hours. Using the annual number of responses 3,799,847, 
VA estimates a total annual reporting and recordkeeping burden of 
633,307 hours for respondents.
     Estimated cost to respondents per year: VA estimates the 
annual cost to respondents to be $19,936,530 (3,799,847 responses per 
year x 10 minutes per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

    Title: Yellow Ribbon Program Agreement.
    OMB Control No: 2900-0718.
    CFR Provision: 38 CFR 21.9700(b).
     Summary of collection of information: The new 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.
     Estimated frequency of responses: Once.
     Estimated average burden per response: 14 hours.
     Estimated total annual reporting and recordkeeping burden: 
VA

[[Page 5329]]

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 $2,468,032 (5,600 responses per year x 
14 hours per application x $31.48 *).
    * To estimate the total information collection burden cost, VA used 
the Bureau of Labor Statistics (BLS) median hourly wage for ``all 
occupations'' of $31.48 per hour. This information is available at: 
https://www.bls.gov/oes/current/oes_nat.htm.

Severability

    The purpose of this section is to clarify the agencies' intent with 
respect to the severability of provisions of this final rule. Each 
provision that the agency is promulgating 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.

Congressional Review Act

    Under the Congressional Review Act, this regulatory action may 
result in ``an annual effect on the economy of $100,000,000 or more,'' 
5 U.S.C. 804(2), and so is subject to the 60-day delay in effective 
date under 5 U.S.C. 801(a)(3). In accordance with 5 U.S.C. 801(a)(1), 
VA will submit to the Comptroller General and to Congress a copy of 
this Regulation and the Regulatory Impact Analysis (RIA) associated 
with the Regulation.

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, signed and approved 
this document on December 12, 2024, 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 amends 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 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 ``; and'' in its 
place; and
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 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 (d), adding a semicolon at the end of the paragraph;
0
b. In paragraph (k), removing the period and adding ``; and'' in its 
place; and
0
c. 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. Removing the parenthetical authority citation at the end of 
paragraphs (a), (b), and (e);
0
b. Revising the heading for paragraph (f) introductory text;
0
c. Removing the parenthetical authority citation at the end of 
paragraphs (f)(4)(ii), (f)(5)(ii), and (f)(6)(ii)(B); and
0
d. Adding paragraphs (g) and (h).
    The revision and additions 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 (g)(2) of this section, 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) of 
this section, 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

[[Page 5330]]

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.
    (h) Authority. (1) Paragraph (a) of this section issued under the 
authority of 10 U.S.C. 16136(b); 38 U.S.C. 3034, 3680(d);
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3034(c), 3680(f);
    (3) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 5113, 3680(b), 3680(c), 3680(g);
    (4) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 3680;
    (5) Paragraph (f)(5) of this section issued under the authority of 
38 U.S.C. 3680(a);
    (6) Paragraph (f)(6) of this section issued under the authority of 
38 U.S.C. 512, 3680(a); and
    (7) Paragraph (g) of this section issued under the authority of 38 
U.S.C. 512, 3680(a).
* * * * *

0
7. Amend Sec.  21.4150 by:
0
a. Revising paragraph (c)(2) and removing the parenthetical authority 
citation at the end of the paragraph;
0
b. Removing the parenthetical authority citation at the end of 
paragraphs (d) and (e);
0
c. Revising paragraph (f) and removing the parenthetical authority 
citation at the end of the paragraph;
0
d. Removing the parenthetical authority citation at the end of 
paragraph (g); and
0
e. Adding paragraph (h).
    The revisions and addition read as follows:


Sec.  21.4150  Designation.

* * * * *
    (c) * * *
    (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 Sec. Sec.  21.4201, 
21.4203, 21.4251, 21.4252, and 21.4253(d)(2) and (3), 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.
    (ii) [Reserved]
    (h)(1) Paragraph (c)(2) of this section issued under the authority 
of 38 U.S.C. 3671(b)(1);
    (2) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 512(a), 3561(b);
    (3) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3672(c);
    (4) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 3672(b); and
    (5) Paragraph (g) of this section issued under the authority of 38 
U.S.C. 3689.
* * * * *

0
8. Amend Sec.  21.4151 by:
0
a. Removing the parenthetical authority citation at the end of 
paragraphs (a) and (b);
0
b. In paragraph (b)(5), removing ``and'' at the end of the paragraph;
0
c. Redesignating paragraph (b)(6) as paragraph (b)(7);
0
d. Adding new paragraph (b)(6);
0
e. Removing the parenthetical authority citation at the end of 
paragraph (c); and
0
f. Adding paragraph (d).
    The additions read 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
* * * * *
    (d)(1) Paragraph (a) of this section issued under the authority of 
38 U.S.C. 3673(a);
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3672, 3673, 3674, 3689; and
    (3) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3673(b).

0
9. Amend Sec.  21.4200 by adding paragraphs (mm) through (oo) following 
the parenthetical authority citation at the end of the section to read 
as follows:


Sec.  21.4200  Definitions.

* * * * *
    (mm) National test for admission. (1) 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: https://inquiry.vba.va.gov/weamspub/buildSearchNE.do.
    (2) This paragraph (mm) issued under the authority of 38 U.S.C. 
3452(b), 3315A, 3501(a)(5).
    (nn) National test for credit. (1) 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: https://inquiry.vba.va.gov/weamspub/buildSearchNE.do.
    (2) This paragraph (nn) issued under the authority of 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:
0
a. Revising the introductory text;
0
b. Removing the parenthetical authority citation at the end of 
paragraph (a);
0
c. Revising paragraph (b) and removing the parenthetical authority 
citation at the end of the paragraph;
0
d. Removing the parenthetical authority citation at the end of 
paragraphs (c) and (d);
0
e. Revising paragraph (e) and removing the parenthetical authority 
citation at the end of the paragraph; and
0
f. Adding paragraph (f).
    The revisions and addition read as follows:

[[Page 5331]]

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.
    (f)(1) Paragraph (a) of this section issued under the authority of 
10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3323(a), 3684(c);
    (2) Paragraph (b) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3323(a), 3684(c);
    (3) Paragraph (c) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3323(a), 3684(c);
    (4) Paragraph (d) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3323(a), 3684(c); and
    (5) Paragraph (e) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3323(a), 3684(c).
* * * * *

0
11. Revise Sec.  21.4235 to read as follows:


Sec.  21.4235   Programs of education that include flight training.

    VA will use the provisions of this section to determine whether an 
individual may be paid educational assistance for pursuit of flight 
training. See Sec.  21.4263 for approval of flight courses for VA 
training.
    (a) Eligibility. 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 (a). Except when enrolled in a ground 
instructor certification course or when pursuing flight training under 
paragraph (e) of this section, the individual must--
    (1) Possess a valid private pilot certificate or higher pilot 
certificate such as a commercial pilot certificate;
    (2) If enrolled in a course other than an Airline Transport Pilot 
(ATP) course, hold a second-class medical certificate on the first day 
of training and, if that course began before October 1, 1998, hold that 
certificate continuously during training; and
    (3) If enrolled in an ATP certification course, hold a first-class 
medical certificate on the first day of training and, if that course 
began before October 1, 1998, hold that certificate continuously during 
training.
    (b) Pursuit of flight courses. (1) VA will pay educational 
assistance to an eligible individual for an enrollment in a commercial 
pilot certification course leading to Federal Aviation Administration 
certification for a particular category even if the individual has a 
commercial pilot certificate issued by the Federal Aviation 
Administration for a different category, since each category represents 
a different vocational objective.
    (2) VA will pay educational assistance to an eligible individual 
for an enrollment in an instrument rating course only if the individual 
simultaneously enrolls in a course required for a commercial pilot 
certificate for the category for which the instrument rating course is 
pursued or if, at the time of enrollment in the instrument rating 
course, the individual has a commercial pilot certificate issued by the 
Federal Aviation Administration for such category. The enrollment in an 
instrument rating course alone does not establish that the individual 
is pursuing a vocational objective, as required for VA purposes, since 
that rating equally may be applied to an individual's private pilot 
certificate, only evidencing an intent to pursue a non-vocational 
objective.
    (3) VA will pay educational assistance to an eligible individual 
for an enrollment in a flight course other than an instrument rating 
course or a ground instructor course, including courses leading to an 
aircraft type rating, only if the individual has a commercial pilot 
certificate issued by the Federal Aviation Administration for the 
category to which the particular course applies.
    (4) VA will pay educational assistance to an eligible individual 
for an enrollment in a ground instructor certificate course, even 
though the individual does not have any other flight certificate issued 
by the Federal Aviation Administration, since the Federal Aviation 
Administration does not require a flight certificate as a prerequisite 
to ground instructor certification and ground instructor is a 
recognized vocational objective.
    (5) VA will not pay an eligible individual for simultaneous 
enrollment in more than one flight course, except as provided in 
paragraph (b)(2) of this section.
    (c) Some individuals are already qualified for a flight course 
objective. (1) The provisions of Sec. Sec.  21.5230(a)(4), 
21.7110(b)(4), and 21.7610(b)(4), prohibiting payment of educational 
assistance for enrollment in a course for whose objective the 
individual is already qualified, apply to enrollments in flight 
courses.
    (2) A former military pilot with the equivalent of a commercial 
pilot certificate and an instrument rating may obtain a commercial 
pilot certificate and instrument rating from the Federal Aviation 
Administration without a flight exam within 12 months of release from 
active duty. Therefore, VA will consider such a veteran to be already 
qualified for the objectives of a commercial pilot certification course 
and an instrument rating course if begun within 12 months of the 
individual's release from active duty.
    (d) Some flight courses are refresher training. The provisions of 
Sec. Sec.  21.5230(c), 21.7020(b)(26), 21.7122(b), 21.7520(b)(20), and 
21.7610(b)(4) that provide limitations on payment for refresher 
training that is needed to update an individual's knowledge and skill 
in order to cope with technological advances while he or she was on 
active duty service apply to flight training.
    (1) An individual who held a Federal Aviation Administration 
certificate before or during active duty service may have surrendered 
that certificate or the Federal Aviation Administration may

[[Page 5332]]

have canceled it. The individual may receive the equivalent of the 
number of months of educational assistance necessary to complete the 
course that will qualify him or her for the same grade certificate.
    (2) A reservist is not eligible for refresher training unless he or 
she has had prior active duty.
    (e) Flight training at an institution of higher learning. (1) An 
individual who is eligible for educational assistance under 10 U.S.C. 
chapter 1606 or 1607 or 38 U.S.C. chapter 30, 32, 33, or 35 is exempt 
from the provisions of paragraphs (a)(2) through (c) of this section 
when his or her courses include flight training that is part of a 
program of education that leads to a standard college degree.
    (2) An individual described in paragraph (e)(1) of this section may 
pursue courses that may result in the individual eventually receiving 
recreational pilot certification or private pilot certification, 
provided that the courses also lead to a standard college degree.
    (f) Authority. (1) Paragraph (a) of this section issued under the 
authority of 10 U.S.C. 16136(c); 38 U.S.C. 3034(d), 3241(b);
    (2) Paragraph (b) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3002(3)(A), 3034(a), 3202(2)(A), 3241(a), 
3241(b), 3452(b), 3680A(a)(3);
    (3) Paragraph (c) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241(a), 3241(b), 3471(4);
    (4) Paragraph (d) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3002(3)(A), 3034(a)(3), 3202(2)(A), 3241(a), 
3241(b)); and
    (5) Paragraph (e) of this section issued under the authority of 10 
U.S.C. 16136(b); 38 U.S.C. 3002(3)(A), 3034(a)(3), 3202(2)(A), 3241(a), 
3241(b).

0
12. Amend Sec.  21.4253 by:
0
a. Removing the parenthetical authority citation at the end of 
paragraph (a); b. Revising paragraph (a) introductory text;
0
c. Removing the parenthetical authority citation at the end of 
paragraphs (d)(1)(iv), (d)(3), (5), and (8), (d)(10)(ii), and (e)(1); 
and
0
c. Adding paragraph (g).
    The revision and addition 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:
* * * * *
    (g) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3675(a);
    (2) Paragraphs (b) through (d)(1) of this section issued under the 
authority of 38 U.S.C. 3675(a), 3676(b);
    (3) Paragraphs (d)(2) and (3) of this section issued under the 
authority of 38 U.S.C. 3675(b);
    (4) Paragraphs (d)(4) and (5) of this section issued under the 
authority of 38 U.S.C. 3474, 3675);
    (5) Paragraphs (d)(6) through (8) of this section issued under the 
authority of 38 U.S.C. 3675(b), 3676(c)(1), (2), (3);
    (6) Paragraph (d)(9) of this section issued under the authority of 
38 U.S.C. 3675(b)(3), 3676(c), (f); and
    (7) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3675.
* * * * *

0
13. Amend Sec.  21.4259 by:
0
a. Revising paragraphs (a) and (b);
0
b. Removing the parenthetical authority citation at the end of 
paragraph (e);
0
c. Adding paragraph (f); and
0
d. Removing the parenthetical authority citation under parenthetical 
``(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0051)''.
    The revision and addition 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)(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.
* * * * *
    (f) Paragraphs (a) through (e) of this section issued under the 
authority of 38 U.S.C. 3679(d).

0
14. Amend Sec.  21.4263 by revising paragraph (a) and removing the 
parenthetical authority citation at the end of the paragraph 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 paragraphs (b)(2) and (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

[[Page 5333]]

approving agency may not approve a flight course if an individual 
instructor offers it.
    (3) This paragraph (a) issued under the authority of 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:
0
a. Revising paragraph (a) and removing the parenthetical authority 
citation at the end of the paragraph;
0
b. Removing the parenthetical authority citation at the end of 
paragraphs (b) through (e);
0
c. Adding paragraph (g); and
0
d. Removing the parenthetical authority citation below the 
parenthetical ``(The Office of Management and Budget has approved the 
information collection provisions in this section under control number 
2900-0051)''; and
    The revision and addition 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 paragraphs (a)(1) and (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).
* * * * *
    (g) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 512(a), 3689(a)(2);
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3689;
    (3) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3689(c);
    (4) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 3689(c);
    (5) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3689(d);
    (6) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 3689.

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

0
16. The authority citation for 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. Removing the parenthetical authority citation at the end of 
paragraph (a)(1);
0
b. In paragraph (a)(1)(ix), removing ``or'';
0
c. In paragraph (a)(1)(x), removing the period and adding ``; or'' in 
its place;
0
d. Adding paragraph (a)(1)(xi);
0
e. Removing the parenthetical authority citation at the end of 
paragraphs (a)(2) and (b); and
0
f. Adding paragraph (c).
    The additions read 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).
* * * * *
    (c) Authority. (1) Paragraph (a)(1) of this section issued under 
the authority of 38 U.S.C. 3322(a), 3681(b), 3695;
    (2) Paragraph (a)(2) of this section issued under the authority of 
38 U.S.C. 3033(a), 3322(a); and
    (3) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3034(a), 3231, 3323(a).

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

0
18. The authority citation for 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 ``; and'' in 
its place;
0
c. Adding paragraph (a)(1)(xi);
0
d. Adding reserved paragraph (a)(2);
0
e. Removing the parenthetical authority citation at the end of 
paragraphs (b) and (c); and
0
f. Adding paragraph (d).
    The additions read as follows:


Sec.  21.7143   Nonduplication of educational assistance.

    (a) * * *
    (1) * * *
    (xi) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
    (2) [Reserved]
* * * * *
    (d) Authority. (1) Paragraphs (a) and (b) of this section issued 
under the authority of 10 U.S.C. 16136(b); 38 U.S.C. 3033(a), 3681(b); 
and
    (2) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3034, 3681.

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

0
20. The authority citation for 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. Removing the parenthetical authority citation at the end of 
paragraph (a);
0
b. In paragraph (a)(9), removing ``or'';
0
c. In paragraph (a)(10), removing the period and adding ``; and'' in 
its place;
0
d. Adding paragraph (a)(11);
0
e. Removing the parenthetical authority citation at the end of 
paragraphs (c) through (e); and
0
e. Adding paragraph (f).
    The additions read as follows:


 Sec.  21.7642  Nonduplication of educational assistance.

    (a) * * *
    (11) Effective August 1, 2011, 10 U.S.C. 510 (National Call to 
Service).
* * * * *
    (f) Authority. (1) Paragraph (a) of this section issued under the 
authority of 10 U.S.C. 16136(b); 38 U.S.C. 3033(a), 3241(a), 3322(a), 
3681);
    (2) Paragraphs (b) and (c) of this section issued under the 
authority of 10 U.S.C. 16134; Pub. L. 98-525);
    (3) Paragraph (d) of this section issued under the authority of 10 
U.S.C. 16136(b), 38 U.S.C. 3681; Public Law 98-525; and
    (4) Paragraph (e) of this section issued under the authority of 
Sec. 4492(a), Public Law 102-484, 106 Stat. 2765-2766.

Subpart P--Post-9/11 GI Bill

0
22. The authority citation for 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.'';

[[Page 5334]]

0
c. Revising the definition for ``Active duty'' and removing the 
parenthetical authority citation at the end of the definition;
0
d. Adding in alphabetical order the definition for ``Educational 
institution'';
0
e. Revising the definition for ``Entry level and skill training'' and 
removing the parenthetical authority citation at the end of the 
definition;
0
f. Adding in alphabetical order the definition for ``Fugitive felon'';
0
g. Adding a parenthetical with the OMB control number for the approval 
of the information collection immediately following the parenthetical 
authority citation at the end of the section.
    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) of this definition, 
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 
14 U.S.C. 1925.
    (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.
    (3) This definition issued under the authority of 38 U.S.C. 
101(21)(A), 3301(1), 3311(d), 3322(b), (c); Public Law 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.
    (1) This definition issued under the authority of 38. U.S.C. 
3323(a).
    (2) [Reserved]
* * * * *
    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.
    (6) This definition issued under the authority of 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.
    (4) This definition issued under the authority of 38 U.S.C. 
3323(c), 5313B.
* * * * *
(The Office of Management and Budget has approved the information 
collection provisions in this section under control number 2900-
0154.)


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


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

    (a) 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.
    Active duty means--
    (i) Full-time duty:
    (B) In the regular components of the Armed Forces; orc
    (C) Under a call or order to active duty under 10 U.S.C. 688, 
12301(a), 12301(d), 12301(g), 12302, or 12304.
    (ii) 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 (i)(B) of this definition, 
full time service--
    (A) In the National Guard of a State for the purpose of organizing, 
administering, recruiting, instructing, or training the National Guard; 
or
    (B) 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.
    (iii) Active duty does not include--
    (A) Any period during which the individual--
    (1) 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
    (2) Served as a cadet or midshipman at one of the service 
academies; or
    (3) 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.
    (B) A period of service--
    (1) Required by an officer pursuant to an agreement under 10 U.S.C. 
2107(b); or
    (2)(i) Required by an officer pursuant to an agreement under 10 
U.S.C. 4348, 6959, or 9348; or

[[Page 5335]]

    (ii) Effective for individuals entering into agreements after 
January 3, 2011, required by an officer pursuant to an agreement under 
14 U.S.C. 1925.
    (3) That was terminated because the individual is considered a 
minor by the Armed Forces, was erroneously enlisted, or received a 
defective enlistment agreement; or
    (4) Counted for purposes of repayment of an education loan under 10 
U.S.C. chapter 109.
    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.
    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.
    Distance learning means the pursuit of a program of education via 
distance education as defined in 20 U.S.C. 1003(7).
    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
    Educational institution has the same meaning as the term 
institution of higher learning as defined in Sec.  21.4200(h).
    Enrollment period means a term, quarter, or semester during which 
the educational institution offers instruction.
    Entry level and skill training means--
    (i) For members of the Army--
    (A) Basic Combat Training,
    (B) Advanced Individual Training, and
    (C) Effective January 4, 2011, One Station Unit Training.
    (ii) For members of the Navy, Recruit Training (Boot Camp) and 
Skill Training (``A'' School).
    (iii) For members of the Air Force, Basic Military Training and 
Technical Training.
    (iv) For members of the Marine Corps, Recruit Training and Marine 
Corps Training (School of Infantry Training).
    (v) For members of the Coast Guard--
    (A) Basic Training; and
    (B) For individuals entering service on or after January 4, 2011, 
Skill Training (or so-called ``A'' School).
    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.
    Fugitive felon means an individual identified as such by Federal, 
State, or local law enforcement officials and who is a fugitive by 
reason of--
    (i) 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;
    (ii) 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
    (iii) Violating a condition of probation or parole imposed for 
commission of a felony under Federal or State law.
    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.
    Lump sum payment means an amount of educational assistance paid for 
the entire term, quarter, or semester.
    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.
    (i) An illness or mental illness of the individual;
    (ii) An illness or death in the individual's family;
    (iii) An unavoidable change in the individual's conditions of 
employment;
    (iv) An unavoidable geographical transfer resulting from the 
individual's employment;
    (v) Immediate family or financial obligations beyond the control of 
the individual that require him or her to suspend pursuit of the 
program of education to obtain employment;
    (vi) Discontinuance of the course by the educational institution;
    (vii) Unanticipated active duty for training; or
    (viii) Unanticipated difficulties in caring for the individual's 
child or children.
    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--
    (i) Waiver of, or reduction in, tuition and fees; and
    (ii) 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.
    Non-public institution means a proprietary institution as defined 
in Sec.  21.4200(z).
    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).
    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 of the U.S.

[[Page 5336]]

Code, and must be necessary to reach the program's objective.
    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. 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.
    (b)(1)The Academic year definition in this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(a);
    (2) The Active Duty definition in this section issued under the 
authority of 38 U.S.C. 101(21)(A), 3301(1), 3311(d), 3322(b), (c); 
Public Law 111-377, 124 Stat. 4107-4108;
    (3) The Advance payment definition in this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(d);
    (4) The Course definition in this section issued under the 
authority of 38 U.S.C. 3323(c);
    (5) The Distance learning definition in this section issued under 
the authority of 20 U.S.C. 1003(7); 38 U.S.C. 3323(c);
    (6) The Educational assistance definition in this section issued 
under the authority of 38 U.S.C. 3313;
    (7) The Educational institution definition in this section issued 
under the authority of 38. U.S.C. 3323(a);
    (8) The Enrollment period definition in this section issued under 
the authority of 38 U.S.C. 3034(a), 3323(a), 3680(g);
    (9) The Entry level and skill training definition in this section 
issued under the authority of 38 U.S.C. 3301(2);
    (10) The Fees definition in this section issued under the authority 
of 38 U.S.C. 501(a), 3323(c);
    (11) The Fugitive felon definition in this section issued under the 
authority of 38 U.S.C. 3323(c), 5313B;
    (12) The Institution of higher learning (IHL) definition in this 
section issued under the authority of 38 U.S.C. 3034(a), 3313(b), 
3323(a), 3452(f);
    (13) The Lump sum payment definition in this section issued under 
the authority of 38 U.S.C. 3323(c);
    (14) The Mitigating circumstances definition in this section issued 
under the authority of 38 U.S.C. 3034(a), 3323(a), 3680(a)(1);
    (15) The Net cost definition in this section issued under the 
authority of 38 U.S.C. 3313, 3323(c);
    (16) The Non-public institution definition in this section issued 
under the authority of 38 U.S.C. 3323(c);
    (17) The Program of education definition in this section issued 
under the authority of 38 U.S.C. 3034(a), 3301, 3323(a), 3452(b);
    (18) The Pursuit definition in this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(g);
    (19) The Rate of pursuit definition in this section issued under 
the authority of 38 U.S.C. 3323, 3680;
    (20) The Transferor definition in this section issued under the 
authority of 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 reads 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 38 U.S.C. 
chapter 33 in lieu of benefits under one of the applicable chapters 
listed in paragraph (c)(1)(i) of this section (e.g., ``I elect to

[[Page 5337]]

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
    (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 (d), 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.
    (e) Paragraphs (a) through (d) of this section issued under the 
authority of 38 U.S.C. 3311; Public Law 110-252, 111-32, Stat. 1859, 
2375-2376.

(The Office of Management and Budget has approved the information 
collection provision in this section under control numbers 2900-0154 
and 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)'' wherever it appears and adding in its 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)''; b. Removing the parenthetical authority citation at 
the end of paragraphs (c) through (e);
0
c. Adding paragraphs (f) and (g); and
0
d. Adding at the end of the section a parenthetical with the OMB 
control number for the approval of the information collection.
    The additions read as follows:


Sec.  21.9530   Eligibility time limit.

* * * * *
    (f) Time limit for child eligible under Sec.  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 Sec.  
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 Sec.  21.9520(d) on or after January 1, 
2013, the period during which the child may use his or her entitlement 
never expires.
    (g) Authority. (1) Paragraphs (a) through (c) of this section 
issued under the authority of 38 U.S.C. 3311(c), 3321;
    (2) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 3319;
    (3) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3319; and
    (4) Paragraph (f) of this section issued under the authority of 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''); and
    (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

[[Page 5338]]

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 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.
    (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
    (2) For the rural relocation benefit as provided under Sec.  
21.9660; or
    (3) For receipt of a work-study allowance as provided under Sec.  
21.4145.
    (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.
    (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.
    (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 5339]]

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.
    (j) Authority. (1) Paragraphs (a) through (f) of this section 
issued under the authority of 38 U.S.C. 3315, 3315A;
    (2) Paragraph (g)(1) of this section issued under the authority of 
38 U.S.C. 3314;
    (3) Paragraph (g)(2) of this section issued under the authority of 
38 U.S.C. 3318;
    (4) Paragraph (g)(3) of this section issued under the authority of 
38 U.S.C. 3485;
    (5) Paragraph (g)(4) of this section issued under the authority of 
38 U.S.C. 3312(c);
    (6) Paragraph (h) of this section issued under the authority of 38 
U.S.C. 3323(c); and
    (7) Paragraph (i) of this section issued under the authority of 38 
U.S.C. 3034(a), 38 U.S.C. 3323(a), 3685.

0
31. Amend Sec.  21.9570 by:
0
a. Revising the section heading;
0
b. In the introductory text, removing ``An individual'' and adding in 
its place ``For training that occurs before August 1, 2011, an 
individual'';
0
c. Adding a parenthetical with the OMB control number for the approval 
of the information collection at the end of the section.
    The revision and addition read as follows:


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

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

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.
    (2) Claims and applications. Section 21.9510--Claims, VA's duty to 
assist, and time limits.
    (3) Eligibility. (i) Section 21.9530--Eligibility time limit, 
paragraphs (d) and (e) of this section 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.
    (4) Entitlement. (i) Section 21.9550--Entitlement;
    (ii) Section 21.9561--Entitlement charges--for provisions effective 
after July 31, 2011.
    (5) Counseling. (i) Section 21.9580--Counseling;
    (ii) Section 21.9585--Travel expenses.
    (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.
    (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) 
of this section;
    (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) of 
this section;
    (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
    (xiv) Section 21.9700--Yellow Ribbon Program.
    (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.
    (9) Course assessment. Section 21.9750--Course measurement.
    (10) Administrative. Section 21.9770--Administrative.
    (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 paragraph(d)(1) of this section 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.
    (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.
    (d) Designating dependents; designating the amount to transfer; and 
period of transfer. (1) An individual transferring entitlement under 
this section must:

[[Page 5340]]

    (i) Designate the dependent or dependents to whom such entitlement 
is being transferred;
    (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 (iii) of this section.
    (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.
    (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.
    (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.
    (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.
    (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.
    (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).
    (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.
    (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 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

[[Page 5341]]

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.
    (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.
    (n) Authority. (1) Paragraph (a)(1) through (a)(7)(xiii) of this 
section issued under the authority of 38 U.S.C. 3319;
    (2) Paragraph (a)(7)(xiv) of this section issued under the 
authority of 38 U.S.C. 3317;
    (3) Paragraph (a)(8) through (10) of this section issued under the 
authority of 38 U.S.C. 3319;
    (4) Paragraphs (b) through (k) of this section issued under the 
authority of 38 U.S.C. 3319;
    (5) Paragraph (l) of this section issued under the authority of 38 
U.S.C. 3034(a), 3311(c)(4), 3319); and
    (6) Paragraph (m) of this section issued under the authority of 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) Basis for education assistance payments. 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.
    (b) Approval of the selected program of education. Subject to 
paragraph (a) of this section, 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.
    (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.
    (d) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3313, 3315, 3315A, 3323(a), 3689; and
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3471, 3689.

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.
    (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.
    (c) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3690(a); and
    (2) Paragraph (b) of this section issued under the authority of 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.

(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

[[Page 5342]]

place ``For a claim submitted during the period beginning August 1, 
2009, and ending July 31, 2011, VA will determine''; and.
0
c. Adding paragraph (m).
    The revision and addition read 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.
    (5) This paragraph (m) issued under the authorityof 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.
    (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.
    (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.
    (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) through (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.
    (c) Certification for program of education offered by a non-college 
degree educational institution. (1) Except as provided in paragraphs 
(c)(2) and (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.
    (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--
    (i) The first date of employment in the training position; or
    (ii) October 1, 2011.
    (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

[[Page 5343]]

found, but not earlier than the effective date of the act or 
administrative issue.
    (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.
    (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.
    (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.
    (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.
    (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.
    (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.
    (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 Sec.  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.
    (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 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.
    (p) Authority. (1) The introductory text of this section issued 
under the authority of 38 U.S.C. 3313, 3316, 3323(a), 5110, 5111, 5113;
    (2) Paragraphs (a) through (a)(1)(ii)(C) of this section issued 
under the authority of 38 U.S.C. 3034(a), 3313, 3316, 3323(a), 3672, 
5103;
    (3) Paragraphs (a)(2) and (a)(3) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3315A, 3323(a), 3452(b);
    (4) Paragraphs (b) and (c) of this section issued under the 
authority of 38 U.S.C. 3313, 3316, 3323);
    (5) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 3323(c), 5113);
    (6) Paragraph (e) of this section issued under the authority of 38 
U.S.C.3323(c);

[[Page 5344]]

    (7) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3482(g);
    (8) Paragraph (g) of this section issued under the authority of 10 
U.S.C. 16131(i); 38 U.S.C. 3015(d), 3316(a);
    (9) Paragraph (h) of this section issued under the authority of 38 
U.S.C. 3311, 3313;
    (10) Paragraphs (i) and (j) of this section issued under the 
authority of 38 U.S.C. 3319;
    (11) Paragraph (m) of this section issued under the authority of 38 
U.S.C. 3323(c), 5313B; and
    (12) Paragraph (o) of this section issued under the authority of 
Pub. L. 111-32, 123 Stat. 1859.

 (The Office of Management and Budget has approved the information 
collection provision in paragraph (a) of this section under control 
number 2900-0706 and the information collection provisions in 
paragraphs (b) and (c) of this section under control numbers 2900-
0154, 2900-0178, 2900-0162, 2900-0353, and 2900-0576.)

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 paragraph (c) and removing the parenthetical authority 
citation at the end of the paragraph;
0
d. Revising paragraph (d) and removing the parenthetical authority 
citation at the end of the paragraph;
0
e. Revising paragraph (w) and removing the parenthetical authority 
citation at the end of the paragraph;
0
f. Removing the parenthetical authority citation at the end of 
paragraph (bb);
0
g. Redesignating paragraph (bb) as paragraph (cc);
0
h. Adding new paragraph (bb); and
0
g. Revising newly-redesignated paragraph (cc).
    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.
    (4) This paragraph (c) issued under the authority of 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 
(d).
    (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.
    (3) This paragraph (d) issued under the authority of 38 U.S.C. 
3034(a), 3323(a), 3680(a).
* * * * *
    (w) Receipt of educational assistance allowance under another 
educational assistance program. (1) 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.
    (2) This paragraph (w) issued under the authority of 38 U.S.C. 
3322(a).
* * * * *
    (bb) Fugitive felons. (1) 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.
    (2) This paragraph (bb) issued under the authority of 38 U.S.C. 
3323(c), 5313B.
    (cc) Other reasons for discontinuance. (1) 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.
    (2) This paragraph (cc) issued under the authority of 38 U.S.C. 
3323(c), 5112(a), 5113.

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

[[Page 5345]]

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 dies while pursuing a 
program of education, the discontinuance date of educational assistance 
will be the date of death.
    (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 (b), VA will terminate or reduce educational assistance 
effective--
    (1) For withdrawals occurring before March 17, 2025 the end of the 
month during which the withdrawal occurred;
    (2) For withdrawals occurring on or after March 17, 2025, the last 
date of attendance.
    (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.
    (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 
(d).
    (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 March 17, 2025), or the last date of attendance (in the case of 
for reductions occurring on or after March 17, 2025), 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.
    (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.
    (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; or(iii) One year from

[[Page 5346]]

the date the incomplete grade was assigned.
    (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.
    (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--
    (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.
    (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.
    (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.
    (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. Sec.  21.4006 and 21.4007 in the same manner as they apply to 
veterans under 38 U.S.C. chapter 30.
    (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.
    (m) Incarceration in prison or other penal institution due to 
conviction of a felony. (1) The provisions of this paragraph (m)(1) 
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.
    (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 of the U.S. 
Code, 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 (n)(2) of this 
section; 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; and
    (B) For entry occurring on or after August 1, 2018, the date of 
entry onto active duty.
    (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.
    (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.
    (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

[[Page 5347]]

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.
    (r) Administrative or payee error. (1) When an administrative error 
or error in judgment by VA, the Department of 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.
    (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.
    (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.
    (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.
    (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'').
    (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.
    (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.
    (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.
    (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.
    (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).
    (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.
    (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.
    (dd) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(d), 3680(e);
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3680(a)(1);
    (3) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3323, 3680(a);
    (4) Paragraphs (d) and (e) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(a);
    (5) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3680;
    (6) Paragraph (g) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3690;
    (7) Paragraph (h) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3672(a), 3690;
    (8) Paragraph (i) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3671(b), 3672(b)(1), 3690;
    (9) Paragraph (j) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3474;
    (10) Paragraph (k) of this section issued under the authority of 38 
U.S.C 3034(a), 3323(a), 3690;
    (11) Paragraph (l) of this section issued under the authority of 38 
U.S.C.3034(a), 3323(a), 3683;

[[Page 5348]]

    (12) Paragraph (m) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3482(g);
    (13) Paragraph (n) of this section issued under the authority of 38 
U.S.C. 3313(j);
    (14) Paragraph (o) of this section issued under the authority of 38 
U.S.C. 3031(f), 3312, 3321;
    (15) Paragraph (p) of this section issued under the authority of 38 
U.S.C. 3321;
    (16) Paragraph (q) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3680;
    (17) Paragraph (r) of this section issued under the authority of 38 
U.S.C. 3323(c), 5112(b), 5113;
    (18) Paragraph (s) of this section issued under the authority of 38 
U.S.C. 3323(c), 5112, 6103;
    (19) Paragraph (t) of this section issued under the authority of 38 
U.S.C. 3323(c), 6104, 6105;
    (20) Paragraph (u) of this section issued under the authority of 38 
U.S.C. 3323(c), 5112, 5113;
    (21) Paragraph (v) of this section issued under the authority of 10 
U.S.C. 16131; 38 U.S.C. 3316(a);
    (22) Paragraph (w) of this section issued under the authority of 38 
U.S.C. 3322(a);
    (23) Paragraph (x) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3676, 3680A(a);
    (24) Paragraphs (y) through (aa) of this section issued under the 
authority of 38 U.S.C. 3319;
    (25) Paragraph (bb) of this section issued under the authority of 
38 U.S.C. 3323(c), 5313B; and
    (26) Paragraph (cc) of this section issued under the authority of 
38 U.S.C. 3323(c), 5112(a), 5113.
(The Office of Management and Budget has approved the information 
collection provision in Sec.  21.9636, paragraph (w) under control 
number 2900-0154.)

0
42. Amend Sec.  21.9640 by:
0
a. Revising the section heading and introductory text;
0
b. Revising paragraph (a) and removing the parenthetical authority 
citation at the end of the paragraph;
0
c. Revising paragraph (d) and removing the parenthetical authority 
citation at the end of the paragraph.
0
d. Removing the parenthetical citation at the end of paragraph (e); and
0
e. Adding paragraph (f).
    The revision and addtion 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 
table 1 to paragraph (a).

                        Table 1 to paragraph (a)
------------------------------------------------------------------------
                                                           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 1095
                                     days or more days.
At least 30 continuous days.......  ....................             100
(Must be discharged due to service-
 connected disability).
At least 30 months, but less than   If aggregate service              90
 36 months \1\.                      (including entry
                                     training) is from
                                     910 to 1094 days.
At least 24 months, but less than   If aggregate service          \3\ 80
 30 months 1 3.                      (including entry
                                     training) is from
                                     730 to 909 days.
At least 18 months, but less than   If aggregate service          \3\ 70
 24 months 2 3.                      (excluding entry
                                     training) is from
                                     545 to 729 days.
At least 12 months, but less than   If aggregate service              60
 18 months \2\.                      (excluding entry
                                     training) is from
                                     365 to 544 days.
At least 6 months, but less than    If aggregate service              50
 12 months \2\.                      (excluding entry
                                     training) is from
                                     180 to 364 days.
At least 90 days, but less than 6   If aggregate service              40
 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).
* * * * *
    (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

[[Page 5349]]

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; or
    (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).
    (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.
    (f) Authority. (1) Paragraph (a)(1) of this section issued under 
the authority of 38 U.S.C. 3311, 3313;
    (2) Paragraph (d)(2) of this section issued under the authority of 
38 U.S.C. 501(a), 3313(e); and
    (3) Paragraph (e) of this section issued under the authority of 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 table 1 
to paragraph (a).

                        Table 1 to paragraph (a)
------------------------------------------------------------------------
                                                           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 1095
                                     days or more days.
At least 30 continuous days.......  ....................             100
(Must be discharged due to service-
 connected disability).
At least 30 months, but less than   If aggregate service              90
 36 months \1\.                      (including entry
                                     training) is from
                                     910 to 1094 days.
At least 24 months, but less than   If aggregate service          \3\ 80
 30 months 1 3.                      (including entry
                                     training) is from
                                     730 to 909 days.
At least 18 months, but less than   If aggregate service          \3\ 70
 24 months 2 3.                      (excluding entry
                                     training) is from
                                     545 to 729 days.
At least 12 months, but less than   If aggregate service              60
 18 months \2\.                      (excluding entry
                                     training) is from
                                     365 to 544 days.
At least 6 months, but less than    If aggregate service              50
 12 months \2\.                      (excluding entry
                                     training) is from
                                     180 to 364 days.
At least 90 days, but less than 6   If aggregate service              40
 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).
    (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.
    (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

[[Page 5350]]

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

[[Page 5351]]

    (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 (c)(5)(i) of this section.
    (iii) During the third 6-month period of the program, 60 percent of 
the amount payable in paragraph (c)(5)(i) of this section.
    (iv) During the fourth 6-month period of the program, 40 percent of 
the amount payable in paragraph (c)(5)(i) of this section.
    (v) During any month after the first 24 months of training, 20 
percent of the amount payable in paragraph (c)(5)(i) of this section.
    (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 (c)(5)(i) through (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.
    (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.
    (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 (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.
    (8) Rate protection. The monthly housing allowance payable under 
paragraphs (c)(1) through (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.
    (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.
    (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.
    (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.
    (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 https://www.GIBill.va.gov.
    (f)(1) Paragraph (a) of this section issued under the authority of 
38 U.S.C. 3311(f);
    (2) Paragraph (b)(1) of this section issued under the authority of 
38 U.S.C. 3313(c)(1)(A)(i);
    (3) Paragraph (b)(2) of this section issued under the authority of 
38 U.S.C. 3313(c)(1)(A)(ii);
    (4) Paragraph (b)(3) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(A);
    (5) Paragraph (b)(4) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(B);
    (6) Paragraph (b)(5) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(C);
    (7) Paragraph (b)(6) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(D);
    (8) Paragraph (b)(7) of this section issued under the authority of 
38 U.S.C. 501(a), 3323(c);
    (9) Paragraph (c)(1) of this section issued under the authority of 
38 U.S.C. 3313(c)(1)(B)(i);
    (10) Paragraph (c)(2) of this section issued under the authority of 
38 U.S.C. 3313(c)(1)(B)(ii);
    (11) Paragraph (c)(3) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(A)(ii);
    (12) Paragraph (c)(4) of this section issued under the authority of 
38 U.S.C. 3313(c)(1)(B)(iii);
    (13) Paragraph (c)(5) of this section issued under the authority of 
38 U.S.C. 3313(g)(3)(B)(i);
    (14) Paragraph (c)(6) of this section issued under the authority of 
38 U.S.C. 3313(e), (f), (g)(3)(C), (g)(3)(D);
    (15) Paragraph (c)(7) of this section issued under the authority of 
38 U.S.C. 3313(i);
    (16) Paragraphs (c)(8) and (c)(9) of this section issued under the 
authority of 38 U.S.C. 501(a), 3323(c);

[[Page 5352]]

    (17) Paragraphs (d)(1) and (d)(2) of this section issued under the 
authority of 38 U.S.C. 3313(g)(3)(A), (B);
    (18) Paragraph (d)(3) of this section issued under the authority of 
38 U.S.C. 3313(c),(e),(f),(g)); and
    (19) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3313, 3323(c).

(The Office of Management and Budget has approved the information 
collection provisions in paragraphs (a) through (b)(7) of this 
section under control numbers 2900-0154, 2900-0178, 2900-0162, 2900-
0353, and 2900-0576.)

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:
0
a. Revising paragraph (a)(2) and removing the parenthetical authority 
citation at the end of the paragraph;
0
b. Revising paragraph (b)(2)(ii);
0
c. Revising paragraph (b)(3) and removing the parenthetical authority 
citation at the end of the paragraph;
0
d. Revising paragraph c)(2)(ii);
0
e. Revision paragraph (c)(3) and removing the parenthetical authority 
citation at the end of the paragraph; and
0
f. Adding paragraph (d).
    The revisions 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).
    (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.
    (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.
    (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.
    (d) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3015(d)(1), 3313(c), 3316(a);
    (2) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3015(d), 3316; Public Law 110-252, 122 Stat. 2378, Public Law 
111-377, 124 Stat. 4119; and
    (3) Paragraph (c) of this section issued under the authority of 10 
U.S.C. 16131(i); Public Law 110-252, Stat 2378).


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

[[Page 5353]]

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:
0
a. Revising the section heading and introductory text;
0
b. Removing the parenthetical authority citation at the end of 
paragraph (a);
0
c. Revising paragraph (c)(2) and removing the parenthetical citation at 
the end of the paragraph;
0
d. Removing the parenthetical citation at the end of paragraph (d);
0
e. In paragraph (d)(5), removing ``veteran-nonveteran'' and adding in 
its place ``supported students versus nonsupported students''; and
0
f. Adding paragraph (e).
    The revisions and addition 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 (c), 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).
* * * * *
    (e) Authority. (1) Paragraph (a) of this section issued under the 
authority of (a) 38 U.S.C. 3034(a), 3323(a), 3680(a);
    (2) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3482(g); and
    (3) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 501(a), 3034(a), 3323(a).

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 (a), 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.
    (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--
    (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).
    (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 supported 
students versus nonsupported students 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).
    (e) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3680(a);
    (2) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3482(g); and
    (3) Paragraph (d) of this section issued under the authority of 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--

[[Page 5354]]

    (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.
    (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 31 U.S.C 7701(c)(1).
    (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.
    (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.
    (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
    (iv) The cost of the test.
    (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.
    (7) 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.
    (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.

[[Page 5355]]

    (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.
    (d) Apportionments prohibited. VA will not apportion educational 
assistance.
    (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.
    (f) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3313(g), 3323(a), 3680, 5301;
    (2) Paragraph (b)(1) of this section issued under the authority of 
38 U.S.C. 3034(a), 3323(a), 3680(g), 3689; 31 U.S.C. 7701(c);
    (3) Paragraph (b)(2) of this section issued under the authority of 
38 U.S.C. 3034(a), 3323(a), 3689;
    (4) Paragraphs (b)(3) through (b)(5) of this section issued under 
the authority of 38 U.S.C. 3034(a), 3323(a), 3689;
    (5) Paragraph (b)(6) of this section issued under the authority of 
38 U.S.C. 3315A;
    (6) Paragraph (b)(7) of this section issued under the authority of 
38 U.S.C. 3680(a);
    (7) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3318;
    (8) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3680); and
    (9) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 5121.

(The Office of Management and Budget has approved the information 
collection provisions in paragraphs (a) through (b)(1) of this 
section under control number 2900-0073, the information collection 
provisions in paragraphs (b)(2) through (5) of this section under 
control numbers 2900-0695 and 2900-0706, and the information 
collection provisions in paragraph (b)(6) under control numbers 
2900-0695, 2900-0698, and 2900-0706.)


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) 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),
    (1) 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.
    (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.
    (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.
    (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--
    (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.
    (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.
    (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

[[Page 5356]]

pension paid on account of the eligible individual.
    (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.
    (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.
    (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 38 U.S.C. chapter 30, 32, 
or 33, and 10 U.S.C. chapter 1606 or 1607, 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 38 U.S.C. chapter 35, 
based on the parent's death must make an irrevocable election in 
writing specifying which benefit he or she wishes to receive.
    (i) Authority. (1) Paragraph (a)(1) of this section issued under 
the authority of 38 U.S.C. 3034(a), 3322, 3323(a), 3681; section 901, 
Pub. L. 96-342;
    (2) Paragraph (a)(2) of this section issued under the authority of 
38 U.S.C. 3034(a), 3322, 3323(a), 3681;
    (3) Paragraph (b) of this section issued under the authority of 38 
U.S.C. 3034(a), 3323(a), 3681;
    (4) Paragraph (c) of this section issued under the authority of 38 
U.S.C. 3322(e), 3323(c);
    (5) Paragraph (d) of this section issued under the authority of 38 
U.S.C. 3322(g), 3323(c);
    (6) Paragraph (e) of this section issued under the authority of 38 
U.S.C. 3322(f);
    (7) Paragraph (f) of this section issued under the authority of 38 
U.S.C. 501(a), 3323(c);
    (8) Paragraph (g) of this section issued under the authority of 38 
U.S.C. 501(a), 3323(c); and
    (9) Paragraph (h) of this section issued under the authority of 38 
U.S.C. 501(a), 3322(h);

(The Office of Management and Budget has approved the information 
collection provisions in paragraphs (a) through (e) of this section 
under control number 2900-0098, and the information collection 
provisions in paragraphs (f) through (h) of this section under 
control numbers 2900-0154 and 2900-0098.)

0
56. Amend Sec.  21.9695 by:
0
a. Removing the parenthetical authority citation at the end of 
paragraph (a);
0
b. In paragraph (a), removing ``institutions of higher learning'' and 
adding in its place ``educational institutions'';
0
c. In paragraph (b), removing ``institution of higher learning'' 
wherever it appears and adding in its place ``educational 
institution'';
0
d. Revising paragraph (b)(3) and removing the parenthetical authority 
citation at the end of the paragraph;
0
f. In paragraph (b)(4)(ii)(A), removing ``established charges'' and 
adding in its place ``tuition and fees'';
0
g. Removing the parenthetical authority citation at the end of 
paragraph (b)(4)(ii)(C); and
0
h. Adding paragraph (c).
    The revision and addition read 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 
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.
* * * * *
    (c) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3034(a), 3323(a), 3690(b);
    (2) Paragraphs (b) through (b)(3)(ii) of this section issued under 
the authority of 38 U.S.C. 3034(a), 3323(a), 3685; and
    (3) Paragraphs (b)(3)(iii) through (b)(4) of this section issued 
under the authority of 38 U.S.C. 3034(a), 3323, 3685, 5302.

0
57. Amend Sec.  21.9700 by:
0
a. Removing ``established charges'' wherever it appears and adding in 
its place ``tuition and fees'';

[[Page 5357]]

0
b. Removing ``38 U.S.C. chapter 3313(c)(1)(A)'' wherever it appears and 
adding in its place ``paragraphs (b) and (c) of Sec.  21.9640 and 
paragraphs (b)(1) and (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''; and
0
g. Adding at the end of the section a parenthetical with the OMB 
control number for the approval of the information collection.
    The revision and addition read 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.
* * * * *
(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0154 and 2900-0718.)

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. Removing ``the institution of higher learning'' wherever it appears 
and adding in its place ``the educational institution'';
0
b. 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
c. In paragraph (b)(1), removing ``an institution of higher learning'' 
and adding in its place ``the educational institution''; and
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.
    (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.
    (c) Authority. (1) Paragraph (a) of this section issued under the 
authority of 38 U.S.C. 3014(b), 3031, 3034(a), 3323(a), 3482(g), 3680, 
3687, 3689, 5101(a); and
    (2) Paragraph (b) of this section issued under the authority of 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:
0
a. Removing ``institution of higher learning'' wherever it appears and 
adding in its place ``educational institution''; and
0
b. In paragraph (b), 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:
0
a. Removing ``institution of higher learning'' wherever it appears and 
adding in its place ``educational institution''; and
0
b. Removing ``institution of higher learning's'' wherever it appears 
and adding in its 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 the heading to paragraph (b);
0
c. Removing paragraph (b) introductory text; and
0
d. Revising paragraph (b)(1).
    The revisions read as follows:


Sec.  21.9750  Course measurement.

* * * * *

[[Page 5358]]

    (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. 2024-29907 Filed 1-15-25; 8:45 am]
BILLING CODE 8320-01-P`