[Federal Register Volume 61, Number 102 (Friday, May 24, 1996)]
[Rules and Regulations]
[Pages 26107-26117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12548]



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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 21

RIN 2900-AH60


Veterans and Dependents Education: Miscellaneous

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the educational assistance regulations. 
It removes ``sunsetted'' provisions that had been authorized by the 
Vietnam Era GI Bill. Under the Vietnam Era GI Bill, no benefits can be 
authorized for training that occurred after December 31, 1989, and no 
educational loans can be authorized for training that occurred after 
December 31, 1991. Consequently, the provisions concerning such 
educational assistance are removed because they are no longer of any 
effect. This document also amends the educational assistance 
regulations by placing virtually all of the provisions relating solely 
to benefits under the Survivors' and Dependents' Educational Assistance 
program in one subpart, 38 CFR Part 21, Subpart C. Further, this 
document removes regulations in 38 CFR Part 21, Subpart E concerning 
civil rights matters since they are duplicative of provisions in 38 CFR 
Parts 18, 18a, and 18b. In addition, this document removes 38 CFR Part 
21, Subpart F-2 concerning special benefits for certain

[[Page 26108]]

former military officers since the deadline for applying for such 
benefits has expired and no further benefits can be paid. The 
educational assistance regulations are further amended by removing a 
number of other provisions that no longer apply or otherwise have no 
substantive effect and by making changes for purposes of clarification.

EFFECTIVE DATE: May 24, 1996.

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director 
for Policy and Program Administration, Education Service, Veterans 
Benefits Administration, 202-273-7187.

SUPPLEMENTARY INFORMATION: This document affects 38 CFR part 21, 
subparts B, C, D, E, F, F-2, and K. It removes provisions that are 
obsolete, duplicative, or without substantive effect; moves provisions 
from one subpart to another; and makes changes for clarification. This 
document makes no substantive changes. Accordingly, there is a basis 
for dispensing with prior notice and comment and delayed effective date 
provisions of 5 U.S.C. 552 and 553.
    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. This final rule makes no substantive 
changes. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is 
exempt from the initial and final regulatory flexibility analyses 
requirements of sections 603 and 604.
    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by these regulations are 64.117 and 64.124.

List of Subjects in 38 CFR Part 21

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

    Approved: May 13, 1996.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR part 21 is amended 
as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart B--Claims and Applications for Educational Assistance

    1. The authority citation for subpart B is revised to read as 
follows:

    Authority: 38 U.S.C. 501(a), ch. 51, unless otherwise noted.

    2. The heading for subpart B is revised to read as set forth above.
    3. The undesignated center heading preceding Sec. 21.1020, 
Secs. 21.1020 through 21.1022, Sec. 21.1025, the undesignated center 
heading preceding Sec. 21.1040, and Secs. 21.1040 through 21.1045 are 
removed.

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

    4. The authority citation for subpart C is revised to read as 
follows:

    Authority: 38 U.S.C. 501(a), 512, 3500-3566, unless otherwise 
noted.

    5. Sections 21.3001 and 21.3002 are added, to read as follows:


Sec. 21.3001  Delegation of authority.

    Except as otherwise provided, authority is delegated to the Under 
Secretary for Benefits and to supervisory or administrative personnel 
within the jurisdiction of the Education Service, Veterans Benefits 
Administration, designated by him or her to make findings and decisions 
under 38 U.S.C. chapter 35 and the applicable regulations, precedents 
and instructions, as to the program authorized by this subpart.

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


Sec. 21.3002  Administration of Survivors' and Dependents' Educational 
Assistance Program.

    Subpart D of this part applies to the Survivors' and Dependents' 
Educational Assistance Program, unless the provisions of a section in 
that subpart are explicitly limited to one or more of the other 
educational assistance programs VA administers.

(Authority: 38 U.S.C. 501, 3501-3566)

    6. In Sec. 21.3021, paragraphs (h), (i), (j), and (k) are added 
prior to the cross references, to read as follows:


Sec. 21.3021  Definitions.

* * * * *
    (h) Program of education. The term program of education means any 
curriculum or any combination of unit courses or subjects pursued at an 
educational institution which is generally accepted as necessary to 
fulfill the requirements for the attainment of a predetermined and 
identified educational, professional, or vocational objective.

(Authority: 38 U.S.C. 3501(a)(5))

    (i) Educational objective. An educational objective is one that 
leads to the awarding of a diploma, degree, or certificate which 
reflects educational attainment.

(Authority: 38 U.S.C. 3501(a)(5))

    (j) Professional or vocational objective. A professional or 
vocational objective is one that leads to an occupation. It may include 
educational objectives essential to prepare for the chosen occupation. 
When a program consists of a series of courses not leading to an 
educational objective, such courses must be directed toward attainment 
of a designated professional or vocational objective.

(Authority: 38 U.S.C. 3501(a)(5))

    (k) Additional definitions. The definitions in Sec. 21.4200 apply 
to subpart C of this part.

(Authority: 38 U.S.C. 501, 3501)
* * * * *
    7. Section 21.3025 is revised to read as follows:


Sec. 21.3025  Nonduplication; Federal programs.

    Payment of subsistence allowance and special training allowance is 
prohibited to an otherwise eligible person--
    (a) Who is on active duty and is pursuing a course of education 
which is being paid for by the Armed Forces (or by the Department of 
Health and Human Services in the case of the Public Health Service); or
    (b) For a unit course or courses which are being paid for under 5 
U.S.C. chapter 41.

(Authority: 38 U.S.C. 3681(a))


Sec. 21.3032  [Amended]

    8. In Sec. 21.3032, paragraph (a)(2) is amended by removing 
``Sec. 21.4105'' and adding, in its place, ``Sec. 21.3104''.
    9. In Sec. 21.3040, an authority citation is added following 
paragraph (d), to read as follows:


Sec. 21.3040  Eligibility; child.

* * * * *
    (d) * * *

(Authority: 38 U.S.C. 3512(a))


Sec. 21.3041  [Amended]

    10. In Sec. 21.3041, paragraph (d)(9)(iii) is amended by removing 
``eligibility'' and adding, in its place ``eligibility'' and by 
removing ``Sec. 21.4135(z)'' and adding, in its place, 
``Sec. 21.3135(g)''.

[[Page 26109]]

    11. In Sec. 21.3042, paragraph (d) is removed; and paragraph (a) is 
revised to read as follows:


Sec. 21.3042  Service with Armed Forces.

    (a) No educational assistance under 38 U.S.C. chapter 35 may be 
provided an otherwise eligible person during any period he or she is on 
duty with the Armed Forces. See Sec. 21.3021 (e) and (f). This does not 
apply to brief periods of active duty for training. See 
Sec. 21.3135(f).

(Authority: 38 U.S.C. 3501(d))
* * * * *


Sec. 21.3044  [Amended]

    12. In Sec. 21.3044, paragraph (c)(1) is amended by removing 
``Sec. 21.4237(d)'' and adding, in its place, ``Sec. 21.3344(d)''.


Sec. 21.3045  [Amended]

    13. In Sec. 21.3045, the introductory text of paragraph (b)(1) and 
the introductory text of paragraph (b)(2) are amended by removing 
``21.4235 of this part'' each time it appears and adding, in its place, 
``21.3344''; and paragraph (b)(2)(i) is amended by removing 
``21.4137(a)'' and adding, in its place, ``21.3131(a)''.
    14. An undesignated center heading and Secs. 21.3100, 21.3102, 
21.3103, 21.3104, and 21.3105 are added to read as follows:

Counseling


Sec. 21.3100  Counseling.

    (a) Purpose of counseling. The purpose of counseling is to assist:
    (1) In selecting an educational or training objective;

(Authority: 38 U.S.C. 3520)
    (2) In developing a suitable program of education or training;

(Authority: 38 U.S.C. 3520)

    (3) In selecting an educational institution or training 
establishment appropriate for the attainment of the educational or 
training objective;

(Authority: 38 U.S.C. 3561(a))

    (4) In resolving any personal problems which are likely to 
interfere with successful pursuit of a program;

(Authority: 38 U.S.C. 3561(a))

    (5) In selecting an employment objective for the eligible person 
that would be likely to provide the eligible person with satisfactory 
employment opportunities in light of his or her circumstances.

(Authority: 38 U.S.C. 3520, 3561(a))

    (b) Availability of counseling. Counseling assistance is available 
for--
    (1) Identifying and removing reasons for academic difficulties 
which may result in interruption or discontinuance of training; or
    (2) In considering changes in career plans, and making sound 
decisions about the changes.

(Authority: 38 U.S.C. 3520, 3561(a))

    (c) Provision of counseling. VA shall provide counseling as needed 
for the purposes identified in paragraphs (a) and (b) of this section 
upon the request of the eligible person.

(Authority: 38 U.S.C. 3520, 3561(a))


Sec. 21.3102  Required counseling.

    (a) Child. The VA counseling psychologist will provide counseling 
and assist in preparing the educational plan only if the eligible child 
or his or her parent or guardian requests assistance, except that 
counseling is required for an eligible child if--
    (1) The eligible child may require specialized vocational training 
or special restorative training; or
    (2) The eligible child has reached the compulsory school attendance 
age under State law, but has neither reached his or her 18th birthday, 
nor completed secondary schooling. See Sec. 21.3040(a).
    (b) Spouse or surviving spouse. Counseling is required for a spouse 
or surviving spouse only if he or she desires specialized vocational 
training.

(Authority: 38 U.S.C. 3520, 3536, 3541, 3561)


Sec. 21.3103  Failure to cooperate.

    VA will not act further on an eligible person's application for 
assistance under 38 U.S.C. chapter 35 when counseling is required for 
him or her and the eligible person--
    (a) Fails to report;
    (b) Fails to cooperate in the counseling process; or
    (c) Does not complete counseling to the extent required under 
Sec. 21.3102.

(Authority: 38 U.S.C. 3536, 3541, 3561(a))


Sec. 21.3104  Special training.

    (a) Initial counseling. A counseling psychologist in the Vocational 
Rehabilitation and Counseling Division will counsel a disabled child, 
spouse, or surviving spouse before referring the case to the Vocational 
Rehabilitation Panel (established under Sec. 21.60) for consideration 
as to the child's, spouse's or surviving spouse's need for a course of 
specialized vocational training or the child's need for special 
restorative training. After consulting with the panel, and considering 
the panel's report, the counseling psychologist will determine if the 
disabled child, spouse, or surviving spouse needs a course of 
specialized vocational training or the disabled child needs special 
restorative training, and where need is found to exist will prescribe a 
course which is suitable to accomplish the goals of 38 U.S.C. chapter 
35.

(Authority: 38 U.S.C. 3536, 3540-3543, 3561(a))

    (b) Counseling after special restorative training. When an eligible 
child completes or discontinues a course of special restorative 
training without having selected an objective and a program of 
education, a counseling psychologist in the Vocational Rehabilitation 
and Counseling Division will provide additional counseling to assist 
the child in selecting a program of education suitable to accomplish 
the purposes of 38 U.S.C. chapter 35.

(Authority: 38 U.S.C. 3561)


Sec. 21.3105  Travel expenses.

    (a) General. VA shall determine and pay the necessary expense of 
travel to and from the place of counseling for an eligible person who 
is required to receive counseling as provided under 38 U.S.C. 111 (a), 
(d), (e), and (g).

(Authority: 38 U.S.C. 111 (a), (d), (e), and (g))

    (b) Restriction. VA will not pay the necessary cost of travel to 
and from the place of counseling when counseling is not required, but 
is provided as a result of a voluntary request by the eligible person.

(Authority: 38 U.S.C. 111)

    15. Sections 21.3130 and 21.3131 are added following the 
undesignated center heading that precedes Sec. 21.3145, to read as 
follows:


Sec. 21.3130  Educational assistance.

    (a) Approval of a program of education. VA will approve a program 
of education selected by an eligible person if:
    (1) The program is described in Sec. 21.3021 (h) and (i) or (j);
    (2) The individual is not already qualified for the objective of 
the program of education;
    (3) The proposed educational institution or training establishment 
is in compliance with all the requirements of 38 U.S.C. chapters 35 and 
36; and
    (4) It does not appear that the enrollment in or pursuit of such 
person's program of education would violate any provision of 38 U.S.C. 
chapters 35 and 36.

(Authority: 38 U.S.C. 3521)
    (b) Payments. VA will pay educational assistance at the rate 
specified in Sec. 21.3131 (subject to the reductions required by 
Sec. 21.3132) while the eligible person is pursuing an approved program 
of education or training.

(Authority: 38 U.S.C. 3521, 3532)


[[Page 26110]]


    (c) No payment for excessive training. (1) VA will make no payment 
for:
    (i) Training in an apprenticeship or other on-job training program 
in excess of the number of hours approved by the State approving agency 
or VA; or
    (ii) Lessons completed in a correspondence course in excess of the 
number approved by the State approving agency.
    (2) A school's standards of progress may permit a student to repeat 
a course or portion of a course in which he or she has done poorly. VA 
considers the repeated courses to be part of the program of education. 
VA will make no payment for courses or training if the courses or 
training are not part of the eligible person's program of education.

(Authority: 38 U.S.C. 3501(a)(5), 3521)

    (d) Courses precluded. VA may not pay educational assistance:
    (1) For pursuit of a course if approval of the enrollment in the 
course is precluded by Sec. 21.4252;
    (2) For training in a foreign country unless the training is in the 
Philippines or is approved pursuant to the provisions of Sec. 21.4260; 
or
    (3) For pursuit of a course offered by open-circuit television, 
unless the eligible person's pursuit meets the requirements of 
Sec. 21.4233(c).

(Authority: 38 U.S.C. 3523)

    (e) Commencing date. In determining the commencing date of an award 
of educational assistance, VA will apply the provisions of 
Sec. 21.4131.

(Authority: 38 U.S.C. 5113)


Sec. 21.3131  Rates--educational assistance allowance--38 U.S.C. 
chapter 35.

    (a) Rates. Except as provided in Sec. 21.3132, educational 
assistance allowance is payable at the following rates effective 
January 1, 1990:

------------------------------------------------------------------------
              Type of courses                       Monthly rate        
------------------------------------------------------------------------
Institutional:                                                          
  Full time...............................  $404                        
  \3/4\ time..............................  304                         
  \1/2\ time..............................  202                         
  Less than \1/2\ but more than \1/4\ time  202                         
   \3\.                                                                 
  \1/4\ time or less \3\..................  101                         
  Cooperative (other than farm              $327                        
   cooperative) (Full time only).                                       
  Apprentice or On-Job (full time only,                                 
   but see footnote \1\)                                                
  First six months........................  $294                        
  Second six months.......................  220                         
  Third six months........................  146                         
  Fourth six months and thereafter........  73                          
Farm Cooperative:                                                       
  Full time...............................  $327                        
  \3/4\ time..............................  245                         
  \1/2\ time..............................  163                         
Correspondence............................  55 percent of the           
                                             established charge for the 
                                             number of lessons completed
                                             by the eligible spouse or  
                                             surviving spouse and       
                                             serviced by the school--   
                                             Allowance paid             
                                             quarterly.\2\              
------------------------------------------------------------------------
\1\ See footnote 5 of Sec.  21.4270(c) for measurement of full time and 
  Sec.  21.3132(c) for proportionate reduction in award for completion  
  of less than 120 hours per month.                                     
\2\ Established charge means the charge for the course or courses       
  determined on the basis of the lowest extended time payment plan      
  offered by the institution and approved by the appropriate State      
  approving agency or the actual cost to the eligible spouse or         
  surviving spouse, whichever is the lesser. VA considers the continuity
  of an enrollment broken when there are more than 6 months between the 
  servicing of the lessons.                                             
\3\ If an eligible person under chapter 35 pursuing independent study on
  a less than one-half-time basis completes his or her program before   
  the designated completion time, his or her award will be recomputed to
  permit payment of tuition and fees not to exceed $202 or $101 as      
  appropriate, per month, if the maximum allowance is not initially     
  authorized.                                                           

(Authority: 38 U.S.C. 3532, 3686)

    (b) Less than half time. The monthly rate for an eligible person 
who is pursuing an institutional course on less than one-half time 
basis may not exceed the monthly rate of the cost of the course 
computed on basis of the total cost for tuition and fees which the 
school requires similarly circumstanced individuals enrolled in the 
same course to pay. ``Cost of the course'' does not include the cost of 
books or supplies which the student is required to purchase at his or 
her own expense.

(Authority: 38 U.S.C. 3532(a)(2))

    (c) Courses leading to a secondary school diploma or equivalency 
certificate. The monthly rate of Survivors' and Dependents' Educational 
Assistance payable for an eligible person enrolled in a course leading 
to a secondary school diploma or equivalency certificate shall be the 
rate for institutional training stated in paragraph (a) of this 
section.

(Authority: 38 U.S.C. 3532(d), 3533)

    (d) Payments made to eligible persons in the Republic of the 
Philippines or to certain Filipinos. When the eligible person is 
pursuing training at an institution located in the Republic of the 
Philippines or when an eligible child's entitlement is based on the 
service of a veteran in the Philippine Commonwealth Army, or as a 
Philippine Scout as defined in Sec. 3.8 (b), (c), or (d) of this 
chapter, payments of educational assistance allowance made after 
December 31, 1994, will be made at the rate of 50 cents for each dollar 
authorized.

(Authority: 38 U.S.C. 3532(d), 3565)


Sec. 21.4137  [Redesignated as Sec. 21.3132]


Sec. 21.3132  [Amended]

    16. Section 21.4137 is redesignated as Sec. 21.3132; paragraphs (d) 
through (g) are removed; paragraph (h) is redesignated as paragraph 
(d); newly redesignated paragraph (d)(4) is amended by removing ``106'' 
and adding, in its place, ``1606''; newly redesignated paragraphs 
(d)(4) and (d)(5) are amended by removing ``(h)(1)(ii)'' in each place 
it appears and adding, in its place, ``(d)(1)(ii)''; paragraphs (i) 
through (o) are removed; and the section heading is revised, 
introductory text is added, and paragraphs (a) through (c) are revised, 
to read as follows:


Sec. 21.3132  Reductions in Survivors' and Dependents' Educational 
Assistance.

    The monthly rates established in Sec. 21.3131 shall be reduced as 
stated in this section whenever the circumstances described in this 
section arise.
    (a) No educational assistance allowance for some incarcerated 
eligible persons. VA will pay no educational assistance allowance to an 
eligible person who:
    (1) Is incarcerated in a Federal, State, or local penal institution 
for conviction of a felony; and
    (2) Is enrolled in a course:
    (i) For which there are no tuition or fees, or charges for books, 
supplies, and equipment; or
    (ii) For which tuition and fees are being paid by a Federal program 
(other than one administered by VA) or by a State or local program, and 
the eligible person is incurring no charge for the books, supplies, and 
equipment necessary for the course.

(Authority: 38 U.S.C. 3532(e))

    (b) Reduced educational assistance allowance for some incarcerated 
eligible persons--felony conviction. (1) VA will pay a reduced 
educational assistance allowance to an eligible person who:
    (i) Is incarcerated in a Federal, State, or local penal institution 
for conviction of a felony; and
    (ii) Is enrolled in a course:
    (A) For which the eligible person pays some (but not all) of the 
charges for tuition and fees; or
    (B) For which a Federal program (other than one administered by VA) 
or a State or local program pays all the

[[Page 26111]]

charges for tuition and fees, but which requires the eligible person to 
pay for books, supplies, and equipment.
    (2) The monthly rate of educational assistance allowance payable to 
such an eligible person who is pursuing a course on a half-time or 
greater basis shall be the lesser of the following:
    (i) The monthly rate of the portion of the tuition and fees that 
the eligible person must pay plus the monthly rate of the charge to the 
eligible person for the cost of necessary supplies, books, and 
equipment; or
    (ii) The monthly rate stated in Sec. 21.3131.
    (3) The monthly rate of educational assistance payable to such an 
eligible person who is pursuing the course on a less than half-time 
basis or on a one quarter-time basis shall be the lowest of the 
following:
    (i) The monthly rate of the tuition and fees charged for the 
course;
    (ii) The monthly rate of tuition and fees which the eligible person 
must pay plus the monthly rate of the charge to the eligible person for 
the cost of necessary supplies, books, and equipment; or
    (iii) The monthly rate stated in Sec. 21.3131.

(Authority: 38 U.S.C. 3482(g))

    (c) Reduction in training assistance allowance. (1) For any month 
in which an eligible person pursuing an apprenticeship or on-job 
training program fails to complete 120 hours of training, VA shall 
reduce the rate specified in Sec. 21.3131(a) proportionally. In this 
computation VA shall round the number of hours worked to the nearest 
multiple of eight.
    (2) For the purpose of this paragraph hours worked include only:
    (i) The training hours the eligible person worked; and
    (ii) All hours of the eligible person's related training which 
occurred during the standard workweek and for which the eligible person 
received wages.

(Authority: 38 U.S.C. 3687(b)(3))
* * * * *
    17. Section 21.3133 is added to read as follows:


Sec. 21.3133  Payment procedures.

    (a) Release of payments and payment procedures. In determining 
whether payments of educational assistance allowance may be made in a 
lump sum, in advance, for an interval or if a certification is required 
from an eligible person before a payment may be made, VA will apply the 
provisions of Sec. 21.4138.

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

    (b) Payee. (1) VA will pay an educational assistance allowance to 
the eligible person if he or she has attained majority and has no known 
legal disability.
    (2) If an eligible person has not attained majority, VA will pay an 
educational assistance allowance directly to an eligible person, a 
relative, or some other person for the use and benefit of the eligible 
person notwithstanding a legal disability on the part of the eligible 
person when VA determines:
    (i) The best interest of the eligible person would be served;
    (ii) Undue delay in payment would be avoided; or
    (iii) Payment would otherwise not be feasible.

(Authority: 38 U.S.C. 3501(a)(4), 3501(c), 3531(a), 5502)

    (c) Payment of accrued benefits. Educational assistance remaining 
due and unpaid at the date of the eligible person's death is payable 
under the provisions of Sec. 3.1000 of this chapter.

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

    (d) Tutorial assistance. An individual who is otherwise eligible to 
receive benefits under the Survivors' and Dependents' Educational 
Assistance program may receive supplemental monetary assistance to 
provide tutorial services. In determining whether VA will pay the 
individual this assistance, VA will apply the provisions of 
Sec. 21.4236.

(Authority: 38 U.S.C. 3492, 3533(b))

    (e) Offsets: 38 U.S.C. chapter 35, compensation, pension and 
dependency and indemnity compensation. Payment of dependents' 
educational assistance will be subject to offset of amounts of pension, 
compensation or dependency and indemnity compensation paid over the 
same period on behalf of a child based on school attendance.

(Authority: 38 U.S.C. 3562)

    (f) Final payment. VA may withhold final payment until VA receives 
proof of continued enrollment and adjusts the eligible person's 
account.

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

    18. Section 21.3135 is added to read as follows:


Sec. 21.3135  Reduction or discontinuance dates for awards of 
educational assistance allowance.

    The reduction or discontinuance date of an award of educational 
assistance will be as stated in this section. If more than one basis 
for reduction or discontinuance is involved, the earliest date will 
control.
    (a) Ending date of course. Educational assistance allowance will be 
discontinued on the ending date of the course or period of enrollment 
as certified by the school.

(Authority: 38 U.S.C. 3531, 3680(a))

    (b) Ending date of eligibility. Educational assistance allowance 
will be discontinued on the ending date of the eligible person's 
eligibility as determined by Sec. 21.3041, Sec. 21.3042, Sec. 21.3043, 
or Sec. 21.3046.

(Authority: 38 U.S.C. 3512)

    (c) General reduction or discontinuance dates. Educational 
assistance allowance will be reduced or discontinued on the date 
specified in Sec. 21.4135.

(Authority: 38 U.S.C. 3482(g), 3531, 3671(g), 3672(a), 3680, 3683, 
3690, 5112, 5113, 6103, 6104, 6105)

    (d) Divorce. If the veteran and eligible spouse divorce, the 
discontinuance date for the eligible spouse's award of educational 
assistance will be:
    (1) The end of the quarter or semester if the school is operated on 
a quarter or semester system, and the divorce was without fault on the 
eligible spouse's part;
    (2) The end of the course or a 12-week period, whichever is 
earlier, if the school does not operate on a quarter or semester 
system, and the divorce was without fault on the eligible spouse's 
part; or
    (3) In all other instances, the date the divorce decree becomes 
final.

(Authority: 38 U.S.C. 3501(a)(1)(D), 3511(b))

    (e) Remarriage or other relationship of spouse or surviving spouse. 
(1) If an eligible surviving spouse remarries, the date of 
discontinuance of his or her award of educational assistance allowance 
will be the last date of attendance before remarriage.
    (2) If a spouse or surviving spouse begins a relationship by living 
with another person and holding himself or herself out openly to the 
public to be the spouse of the other person, the date of discontinuance 
of his or her award of educational assistance allowance will be the 
last date of the month before the spouse's or surviving spouse's 
relationship began.

(Authority: 38 U.S.C. 101(3), 3501(a)(1)(B))

    (f) Entrance on active duty (Sec. 21.3042). If an eligible person 
enters on active duty, VA will terminate his or her educational 
assistance allowance on the day before the day of entrance on active 
duty. Brief periods of active duty for training, if the school permits 
such an absence without interruption of

[[Page 26112]]

training, will not result in termination of the allowance under this 
paragraph.

(Authority: 38 U.S.C. 3501(d))

    (g) Eligible child ceases to be a stepchild. When an eligible child 
loses eligibility because he or she ceases to be the stepchild of the 
veteran, VA will discontinue the dependent's educational assistance 
allowance on the last day of the child's eligibility as determined by 
Sec. 21.3041(d)(9).

(Authority: 38 U.S.C. 101(4)(A), 3501)

    (h) Veteran no longer rated permanently and totally disabled. (1) 
If the veteran on whose service an eligible person's eligibility is 
based is no longer permanently and totally disabled, VA will 
discontinue the educational assistance allowance--
    (i) On the last date of the quarter or semester during which VA 
rated the veteran as no longer permanently and totally disabled if the 
eligible person's educational institution is organized on a quarter or 
semester basis; or
    (ii) On the earlier of the following dates when the eligible 
person's educational institution is not organized on a quarter or 
semester basis:
    (A) The last date of the course;
    (B) The end of a 12-week period beginning on the date VA rated the 
veteran as being no longer permanently and totally disabled.

(Authority: 38 U.S.C. 3511(b), 3512(a)(6)(A))

    (i) Serviceperson is removed from ``missing status'' listing. (1) 
If the serviceperson on whose service an eligible person's eligibility 
is based is removed from the ``missing status'' listing, VA will 
discontinue the educational assistance allowance--
    (i) On the last date of the quarter or semester during which the 
serviceperson was removed from the ``missing status'' listing if the 
eligible person's educational institution is organized on a quarter or 
semester basis; or
    (ii) On the earlier of the following dates when the eligible 
person's educational institution is not organized on a quarter or 
semester basis:
    (A) The last date of the course;
    (B) The end of a 12-week period beginning on the date the 
serviceperson was removed from the ``missing status'' listing.

(Authority: 38 U.S.C. 3512(a)(6)(A))


Sec. 21.3145  [Removed]

    19. Section 21.3145 is removed.
    20. In Sec. 21.3330, paragraph (a) is amended by removing 
``Sec. 21.4139'' and adding, in its place, ``Sec. 21.3133(b)''; and 
paragraph (c) is revised to read as follows:


Sec. 21.3330  Payments.

* * * * *
    (c) The provisions of Sec. 21.3133(e) apply to the payment of 
special restorative training allowance.

(Authority: 38 U.S.C. 3562)


Sec. 21.3331  [Amended]

    21. Section 21.3331 is amended by removing ``Sec. 21.4131'', and 
adding, in its place, ``Sec. 21.3130(c)''.


Sec. 21.3332  [Amended]

    22. Section 21.3332 is amended by removing ``Sec. 21.4135'', and 
adding, in its place, ``Sec. 21.3130(d)''.
    23. An undesignated center heading and Sec. 21.3344 are added to 
read as follows:

Special Assistance and Training


Sec. 21.3344  Special assistance for the educationally disadvantaged.

    (a) Enrollment. VA may approve the enrollment of an eligible person 
in an appropriate course or courses at the secondary school level. This 
approval may be made only if the eligible person--
    (1) Has not received a secondary school diploma (or an equivalency 
certificate);
    (2) Needs additional secondary school education, remedial, 
refresher, or deficiency courses, to qualify for admission to an 
appropriate educational institution in a State in order to pursue a 
program of education; and
    (3) Is to pursue the course or courses in a State.

(Authority: 38 U.S.C. 3491(a), 3533)

    (b) Measurement. VA will measure remedial, deficiency, or refresher 
courses offered at the secondary school level as provided in 
Secs. 21.4270(a)(2) and 21.4272(k).

(Authority: 38 U.S.C. 3533)

    (c) Educational assistance. VA will authorize educational 
assistance at the monthly rates specified in Sec. 21.3131.

(Authority: 38 U.S.C. 3491(a), 3533)

    (d) Entitlement charge. The provisions of Sec. 21.3045 will 
determine whether VA will make a charge against the period of the 
entitlement of the eligible person because of enrollment in a course 
under the provisions of this section.

(Authority: 38 U.S.C. 3533)

    (e) Certifications. (1) Certifications of the eligible person's 
need for deficiency or remedial courses in basic English language 
skills and mathematics skills may be made by:
    (i) A VA counseling psychologist in the Vocational Rehabilitation 
and Counseling Division;
    (ii) The educational institution administering the course; or
    (iii) The educational institution where the student has applied for 
admission.
    (2) Certification of need for other refresher, remedial or 
deficiency course requirements are to be made by the educational 
institution--
    (i) Administering the course which the eligible person is planning 
to enter; or
    (ii) Where the eligible person has applied for admission.

(Authority: 38 U.S.C. 3533)

    (f) Basic skills. Basic English language courses or mathematics 
courses will be authorized when it is found by accepted testing methods 
that the eligible person is lacking in basic reading, writing, 
speaking, or essential mathematics.

(Authority: 38 U.S.C. 3533)

Subpart D--Administration of Educational Assistance Programs

    24. The authority citation for subpart D is revised to read as 
follows:

    Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 
34, 35, 36, unless otherwise noted.

    25. The heading for subpart D is revised to read as set forth 
above.


Sec. 21.4001  [Amended]

    26. In Sec. 21.4001, paragraph (a) is amended by removing ``Chief 
Benefits Director'' and adding, in its place, ``Under Secretary for 
Benefits''; by removing ``Vocational Rehabilitation and''; and by 
removing ``34, 35,'' and adding, in its place, ``34''; paragraph (b) is 
amended by removing ``Chief, Benefits Director'' and adding, in its 
place, ``Under Secretary for Benefits''; and by removing ``Vocational 
Rehabilitation and''; paragraph (c) introductory text is amended by 
removing ``Vocational Rehabilitation and''; paragraph (d) is amended by 
removing ``Chief Benefits Director'' and adding, in its place, ``Under 
Secretary for Benefits'', and by adding ``his or her'' immediately 
preceding ``designee''; paragraph (e) is amended by removing ``Chief 
Benefits Director'' and adding, in its place, ``Under Secretary for 
Benefits''; paragraph (f) is amended by removing ``Chief Benefits 
Director'' and adding, in its place, ``Under Secretary for Benefits''; 
and paragraph (g) is amended by removing ``Education'' and adding, in 
its place, ``Counseling''.


Sec. 21.4009  [Amended]

    27. In Sec. 21.4009, paragraph (a)(2)(i) is amended by removing 
``excessive absences from a course or''; and by removing ``veteran'' 
and adding, in its place, ``veteran, reservist''.

[[Page 26113]]

Sec. 21.4022  [Amended]

    28. In Sec. 21.4022, the heading for paragraph (a) is removed; 
paragraph (b) is removed; and paragraph (a) introductory text and 
paragraphs (a)(1), (a)(2), (a)(3), (a)(4), (a)(5), (a)(6), (a)(7), 
(a)(8), and (a)(9) are redesignated as introductory text and paragraphs 
(a), (b), (c), (d), (e), (f), (g), (h), and (i), respectively.


Sec. 21.4025  [Removed]

    29. Section 21.4025 is removed.


Secs. 21.4100 through 21.4105 and 21.4130  [Removed]

    30. The undesignated center heading which precedes Sec. 21.4100, 
and Secs. 21.4100 through 21.4105 and Sec. 21.4130 are removed.


Sec. 21.4131  [Amended]

    31. In Sec. 21.4131, paragraphs (e) and (j) are removed and 
reserved; the heading for paragraph (g) is amended by removing 
``(Secs. 21.1042(b), 21.3042(b))''; paragraph (g) is amended by 
removing ``veteran'' and adding, in its place, ``veteran or eligible 
person''; the authority citation for paragraph (g) is amended by 
removing ``3462(b)'' and adding, in its place, ``3462(b), 3501(d)''; 
and paragraph (h), introductory text, is amended by removing 
``Sec. 21.4136 (n), (o), (p), or (r) Sec. 21.4137 (j) or (l)'' and 
adding, in its place, ``Sec. 21.3132(a) or (b) or Sec. 21.5139''.


Sec. 21.4132  [Removed]

    32. Section 21.4132 is removed.
    33. In Sec. 21.4135, paragraphs (b), (c), (d), (n), (o), (v), and 
(z) are removed and reserved; paragraph (e)(2) introductory text is 
amended by removing ``as provided in Sec. 21.4136(k) or 21.4137(h),''; 
paragraph (m)(1) is amended by removing ``Sec. 21.4136(n), (o), (p), or 
(r) or Sec. 21.4137(j) or (l)'' and adding, in its place, 
``Sec. 21.3132(a) or (b) or Sec. 21.5139''; and in paragraph (e), the 
heading and paragraph (e)(1) are revised, to read as follows:


Sec. 21.4135  Discontinuance dates.

* * * * *
    (e) Course discontinued; course interrupted; course terminated; 
course not satisfactorily completed or withdrawn from. (1) If the 
individual receives all nonpunitive grades, or withdraws from all 
courses other than because of being ordered to active duty, and no 
mitigating circumstances are found, VA will terminate the individual's 
educational assistance allowance effective the first date of the term 
in which the withdrawal occurs.
* * * * *
    34. In Sec. 21.4136, paragraphs (a) through (j) are removed; 
paragraph (k) heading, paragraph (k)(1) introductory text, paragraphs 
(k)(1)(i), (k)(1)(ii) introductory text, (k)(1)(ii)(A), (k)(1)(ii)(B), 
(k)(1)(ii)(C), and (k)(2) through (k)(5) are redesignated as paragraph 
(a) heading, paragraph (a) introductory text, paragraphs (a)(1), (a)(2) 
introductory text, (a)(2)(i), (a)(2)(ii), (a)(2)(iii), and (b) through 
(e), respectively; newly redesignated paragraphs (a)(2)(ii) and 
(a)(2)(iii) are amended by removing ``veteran'' wherever it appears and 
adding, in its place, ``individual''; paragraphs (l) through (t) and 
the cross reference at the end of the section are removed; and the 
section heading, the heading and introductory text of newly 
redesignated paragraph (a), the authority citation at the end of newly 
redesignated paragraph (a), and newly redesignated paragraph (a)(1) and 
paragraphs (b) through (e) are revised to read as follows:


Sec. 21.4136  Withdrawals or nonpunitive grades may result in 
nonpayment.

    (a) General. VA will not pay benefits to an individual for a course 
from which the individual withdraws or receives a nonpunitive grade 
which is not used in computing the requirements for graduation unless:
    (1) The individual withdraws because he or she is ordered to active 
duty; or
* * * * *
(Authority: 38 U.S.C. 3680(a))

    (b) Representative mitigating circumstances. The following 
circumstances, which are not all inclusive, are representative of those 
that VA considers to be mitigating provided they prevent the individual 
from pursuing the program of education continuously:
    (1) An illness of the individual;
    (2) An illness or death in the individual's family;
    (3) An unavoidable geographical transfer resulting from the 
individual's employment;
    (4) An unavoidable change in the individual's conditions of 
employment;
    (5) 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;
    (6) Discontinuance of the course by the school;
    (7) Unanticipated active duty for training;
    (8) Unanticipated difficulties in caring for the individual's child 
or children.

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

    (c) Failure to complete a course for the educationally 
disadvantaged. If the individual fails to satisfactorily complete a 
course under 38 U.S.C. 3491(a) without fault, VA will consider the 
circumstances that caused the failure to be mitigating. This will be 
the case even if the circumstances were not so severe as to preclude 
continuous pursuit of a program of education.
    (d) Withdrawals after May 31, 1989. In the first instance of a 
withdrawal after May 31, 1989, from a course or courses for which the 
individual received educational assistance under 38 U.S.C. chapter 32, 
VA will consider that mitigating circumstances exist with respect to 
courses totaling not more than six semester hours or the equivalent, 
and paragraphs (a)(2)(ii) and (a)(2)(iii) of this section will not 
apply.

(Authority: 38 U.S.C. 3680(a)(3))

    (e) Withdrawals during a drop-add period. If the individual 
withdraws from a course during a drop-add period, VA will consider the 
circumstances that caused the withdrawal to be mitigating, and 
paragraphs (a)(2)(ii) and (a)(2)(iii) of this section will not apply.

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


Secs. 21.4139 through 21.4141  [Removed]

    35. Sections 21.4139 through 21.4141 are removed.
    36. In Sec. 21.4145, paragraph (b) is amended by removing 
``veteran'' wherever it appears, and adding, in its place, ``veteran, 
reservist, or eligible person'', and by removing ``veteran's'' and 
adding, in its place, ``veteran's, reservist's, or eligible person's''; 
paragraph (c) introductory text is amended by removing ``Veteran-
student'' and adding, in its place, ``Work-study''; the heading of 
paragraph (g) is amended by removing ``Veteran'' and adding, in its 
place, ``Veteran, reservist, or eligible person''; paragraphs (g) and 
(h) are amended by removing ``veteran'' wherever it appears, and 
adding, in its place, ``veteran, reservist, or eligible person''; 
paragraph (i) is amended by removing ``veterans'' and adding, in its 
place, ``veterans, reservists, or eligible persons''; and the section 
heading and paragraphs (a), (c)(3), (c)(4), (d), (e), and (f) are 
revised, and paragraph (c)(5) is added, to read as follows:


Sec. 21.4145  Work-study allowance.

    (a) Eligibility. (1) A veteran or reservist pursuing a program of 
education under either 38 U.S.C. chapter 30 or 32 or 10 U.S.C. chapter 
1606 at a rate of three-quarter time or full time is eligible to 
receive a work-study allowance.
    (2) An eligible person is eligible to receive a work-study 
allowance when-

[[Page 26114]]

    (i) The eligible person is pursuing a program of education under 38 
U.S.C. chapter 35 on at least a three-quarter-time basis;
    (ii) The eligible person is pursuing a program of education in a 
State; and
    (iii) The eligible person is not pursuing a program of special 
restorative training.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)
* * * * *
    (c) * * *
    (3) Hospital and domiciliary care and medical treatment at VA 
facilities;
    (4) For a reservist training under 10 U.S.C. chapter 1606, 
activities relating to the administration of 10 U.S.C. chapter 1606 at 
Department of Defense facilities, Coast Guard facilities, or National 
Guard facilities; and
    (5) Any other appropriate activity of VA.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

    (d) Rate of payment. In return for the veteran's, reservist's, or 
eligible person's agreement to perform services for VA totaling not 
more than 25 hours times the number of weeks contained in an enrollment 
period, VA will pay an allowance in an amount equal to the higher of:
    (1) The hourly minimum wage in effect under section 6(a) of the 
Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)) times the number of 
hours the veteran, reservist, or eligible person has agreed to work; or
    (2) The hourly minimum wage under comparable law of the State in 
which the services are to be performed times the number of hours the 
veteran, reservist, or eligible person has agreed to work.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

    (e) Payment in advance. VA will pay in advance an amount equal to 
the lesser of the following:
    (1) 40 percent of the total amount payable under the contract; or
    (2) An amount equal to 50 times the applicable minimum hourly wage 
in effect on the date the contract is signed.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

    (f) Veteran, reservist, or eligible person reduces rate of 
training. In the event the veteran, reservist, or eligible person 
reduces his or her training to less than three-quarter-time before 
completing an agreement, the veteran, reservist, or eligible person, 
with the approval of the Director of the VA field station, or designee, 
may be permitted to complete the portions of an agreement in the same 
or immediately following term, quarter, or semester in which the 
veteran, reservist, or eligible person ceases to be a three-quarter-
time student.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)
* * * * *


Sec. 21.4146  [Amended]

    37. In Sec. 21.4146, paragraph (a) is amended by removing 
``Chapters 34, 35 and 36, Title 38, U.S.C.'' and adding, in its place, 
``38 U.S.C. chapters 30, 32, 35, or 36, or 10 U.S.C. chapter 1606''; 
and paragraph (f) is removed.
    38. In Sec. 21.4153, paragraph (b) is amended by removing ``Chief 
Benefits Director'' and adding, in its place, ``Under Secretary for 
Benefits''; and by removing ``Vocational Rehabilitation and''; 
paragraph (c)(2)(i)(B) is amended by removing ``Vocational 
Rehabilitation and''; and paragraph (c)(3) is revised, to read as 
follows:


Sec. 21.4153  Reimbursement of expenses.

* * * * *
    (c) Reimbursable expenses. * * *
    (3) Administrative expenses. In determining the allowance for 
administrative expenses for which payment may be authorized, VA will 
apply the provisions of 38 U.S.C. 3674(b). In making that application, 
VA will determine reimbursable salary cost pursuant to paragraph (c)(1) 
of this section.
* * * * *
    39. In Sec. 21.4200, paragraph (v) is revised to read as follows:


Sec. 21.4200  Definitions.

* * * * *
    (v) Reservist. The term reservist means a member of the Selected 
Reserve of the Ready Reserve of any of the reserve components 
(including the Army National Guard of the United States and the Air 
National Guard of the United States) of the Armed Forces who is 
eligible to receive educational assistance under 38 U.S.C. chapter 30 
or 10 U.S.C. chapter 1606.

(Authority: 38 U.S.C. 3002)


Sec. 21.4201  [Amended]

    40. In Sec. 21.4201, paragraph (g)(6) is amended by removing ``in a 
course either before December 1, 1976 or after November 30, 1976,''.


Sec. 21.4204  [Amended]

    41. In Sec. 21.4204, paragraph (b)(2) is removed; and paragraphs 
(b)(3), (b)(4), (b)(5), and (b)(6) are redesignated as paragraphs 
(b)(2), (b)(3), (b)(4), and (b)(5), respectively.


Sec. 21.4205  [Removed]

    42. Section 21.4205 is removed.


Sec. 21.4209  [Amended]

    43. Section 21.4209 is amended in the heading of paragraph (c) by 
removing ``Below college level'' and adding, in its place, ``Noncollege 
degree''; in paragraph (c) by removing ``veterans or'' and adding, in 
its place, ``veterans, servicemembers, reservists, and/or''; by 
removing ``or courses which do'' and adding, in its place, ``that 
does''; and by removing ``which has enrolled veterans under Chapter 34 
or eligible persons under Chapter 35'' and adding, in its place, ``that 
has enrolled veterans under 38 U.S.C. chapter 30 or 32, reservists 
under 10 U.S.C. chapter 1606, or eligible persons under 38 U.S.C. 
chapter 35''; and, immediately after paragraph (c), by adding an 
authority citation to read

``(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3690(c))''.


Sec. 21.4230  [Removed]

    44. Section 21.4230 is removed.


Sec. 21.4235  [Removed]

    45. Section 21.4235 is removed.
    46. In Sec. 21.4236, the section heading, the authority citation 
following paragraph (b), and paragraphs (c) and (d) are revised, to 
read as follows:


Sec. 21.4236  Tutorial assistance.

* * * * *
    (b) * * *

(Authority: 10 U.S.C. 16131(h); 38 U.S.C. 3019, 3234, 3492, 3533(b))

    (c) Limits on tutorial assistance. (1) VA will authorize the cost 
of tutorial assistance in an amount not to exceed $100 per month.
    (2) The total amount of all tutorial assistance provided under this 
section will not exceed $1200.

(Authority: 38 U.S.C. 3019, 3492, 3533(b))

    (d) Entitlement charge. VA will make no charge against the 
veteran's or eligible person's entitlement to educational assistance 
for any amount of tutorial assistance authorized.

(Authority: 38 U.S.C. 3019, 3492, 3533(b))


Sec. 21.4237  [Removed]

    47. Section 21.4237 is removed.


Sec. 21.4252  [Amended]

    48. In Sec. 21.4252, the authority citation for paragraph (b)(3) is 
amended by removing ``3473(a), 3523(a)'' and adding, in its place, 
``3523(a), 3680A(b)''; paragraph (c)(1) is amended by removing 
``training under Chapter 34.'' and adding, in its place, ``training; 
or''; paragraph (c)(2) is removed; paragraph (c)(3) is redesignated as

[[Page 26115]]

paragraph (c)(2); and the authority citation for paragraph (c) is 
amended by removing ``Sec. 2003, Pub. L. 97-35'' and adding, in its 
place, ``10 U.S.C. 16131(g); 38 U.S.C. 3034(d), 3241(b), 3523(b), 
3680A(b)''.
Sec. 21.4260  [Amended]
    49. In Sec. 21.4260, paragraph (c)(1)(i) is amended by removing 
``Secs. 21.1040 through 21.1045,'' and paragraph (c)(1)(ii) is amended 
by removing ``21.4230 or Sec. 21.5230'' and adding, in its place, 
``21.3021(h) or Sec. 21.5021(q)''.
Sec. 21.4264  [Amended]
    50. In Sec. 21.4264, paragraph (b) is amended by removing ``a 
veteran or'' and adding, in its place, ``an''; and paragraph (d)(1) 
introductory text is amended by removing ``veterans,''.
Sec. 21.4266  [Amended]

    51. In Sec. 21.4266, paragraph (c)(1)(iii) is amended by removing 
``21.4203, 21.4204 and 21.4205''; and adding, in its place, ``21.4203 
and 21.4204''.
Sec. 21.4276  [Removed]

    52. Section 21.4276 is removed.
Subpart E--[Removed]
    53. Subpart E is removed.
Subpart F--Education Loans
    54. The authority citation for subpart F is revised to read as 
follows:

    Authority: 38 U.S.C. 501, 3537, 3698, 3699, unless otherwise 
noted.

    55. In Sec. 21.4500, paragraph (b) is amended by removing ``Veteran 
or person'' and adding, in its place, ``spouse or surviving spouse'', 
and by removing ``section 3698, Title 38, U.S.C.'' and adding, in its 
place, ``38 U.S.C. 3512(f) and 3698.''; paragraph (d)(2) introductory 
text is amended by removing ``a veteran or eligible person'' and 
adding, in its place, ``an eligible spouse or surviving spouse''; the 
authority citation following paragraph (d)(2) introductory text is 
amended by removing ``3698'' and adding, in its place, ``3512(f), 
3698''; paragraph (d)(2)(ii) is amended by removing ``Vocational 
Rehabilitation and'' in each place it appears; the authority citation 
for paragraph (d) is amended by removing ``3698(c)'' and adding, in its 
place, ``3512(f), 3698(c)''; paragraph (e)(1) is amended by removing 
``the veteran or other eligible person'' and adding, in its place, 
``the eligible spouse or surviving spouse''; paragraph (e)(2) is 
amended by removing ``the veteran or other eligible person'' and 
adding, in its place, ``the eligible spouse or surviving spouse''; 
paragraph (e)(3) is amended by removing ``the veteran or other eligible 
person'' and adding, in its place, ``the eligible spouse or surviving 
spouse''; paragraph (e)(4) is amended by removing ``the veteran or 
other eligible person under section 3231, 3461, or subchapter II of 
Chapter 35, Title 38 U.S.C., which applies solely to the veteran or 
eligible person'' and adding, in its place, ``the eligible spouse or 
surviving spouse under 38 U.S.C. chapter 35''; paragraph (e)(5) is 
amended by removing ``veteran or other eligible person'' and adding, in 
its place, ``eligible spouse or surviving spouse''; paragraph (e)(6) is 
amended by removing ``veteran under section 3485, Title 38 U.S.C.'' and 
adding, in its place, ``eligible spouse or surviving spouse under 38 
U.S.C. 3537''; paragraph (g) is amended by removing ``a veteran or 
eligible person'' and adding, in its place, ``an eligible spouse or 
surviving spouse''; and by removing ``Effective January 1, 1975, the'' 
and adding, in its place, ``The''; the authority citation following 
paragraph (h) is amended by removing ``3698(b)'' and adding, in its 
place, ``3512(f), 3698(b)''; and paragraph (f) is revised to read as 
follows:
Sec. 21.4500  Definitions.

* * * * *
    (f) Actual cost of attendance. The term actual cost of attendance 
means:
    (1) The actual charge per student for tuition, fees, and books;
    (2) An allowance for commuting (this allowance will be based on 
22.5 cents per mile for distances not exceeding normal commuting 
distance);
    (3) An allowance for other expenses reasonably related to 
attendance at the institution at which the eligible spouse or surviving 
spouse is enrolled; and
    (4) A room and board allowance that shall be determined as follows:
    (i) If the educational institution actually provides the eligible 
spouse or surviving spouse with room and board, the allowance shall 
equal the actual charges to him or her for room and board;
    (ii) If the educational institution provides some students with 
room and board, but does not provide room and board for the eligible 
spouse or surviving spouse, the room and board allowance shall equal 
either the actual expenses incurred by the eligible spouse or surviving 
spouse for room and board, or the amount for room and board that the 
educational institution would have charged the eligible spouse or 
surviving spouse, had the educational institution provided him or her 
with room and board, whichever is less; and
    (iii) If the educational institution does not provide any students 
with room and board, the room and board allowance shall equal either 
the actual expenses incurred by the eligible spouse or surviving spouse 
for room and board or the amount the eligible spouse or surviving 
spouse would have been charged for room and board had he or she been 
provided room and board by the nearest State college or State 
university that provides room and board, whichever is less.
* * * * *
    56. Section 21.4501 is revised to read as follows:


Sec. 21.4501  Eligibility.

    (a) General. Any eligible spouse or surviving spouse shall be 
eligible to receive an education loan if he or she meets the criteria 
of this section.

(Authority: 38 U.S.C. 3512(f), 3698)

    (b) Eligibility criteria. To qualify for an education loan--
    (1) The eligible spouse's or surviving spouse's delimiting period 
as determined by Sec. 21.3046 (a), (b), or (d) must have expired;
    (2) The eligible spouse or surviving spouse must--
    (i) Have financial resources that may reasonably be expected to be 
expended for education needs and which are insufficient to meet the 
actual costs of attendance;
    (ii) Execute a promissory note payable to the Department of 
Veterans Affairs, as provided by Sec. 21.4504;
    (iii) Have unused entitlement provided under 38 U.S.C. 3511;
    (iv) During the term, quarter, or semester for which the loan is 
granted, be enrolled on a full-time basis in pursuit of the approved 
program of education in which he or she was enrolled on the date his or 
her eligibility expired under Sec. 21.3046 (a), (b), or (d); and
    (v) Have been enrolled in a program of education on a full-time 
basis--
    (A) On the date his or her period of eligibility expired under 
Sec. 21.3046 (a), (b), or (d); or
    (B) On the last date of the ordinary term, semester or quarter 
preceding the date his or her eligibility expired under Sec. 21.3046 
(a), (b), or (d), if the delimiting date fell during a school break or 
summer term.

(Authority: 38 U.S.C. 3512(f), 3698)

    (c) Limitations. The period for which a loan may be granted shall 
not extend beyond the earliest of the following dates:
    (1) Two years after the expiration of the period of eligibility as 
determined by Sec. 21.3046(a), (b), or (d);
    (2) The date on which the eligible spouse's or surviving spouse's 
entitlement is exhausted; or

[[Page 26116]]

    (3) The date on which the eligible spouse or surviving spouse 
completes the approved program of education which he or she was 
pursuing on the date the delimiting period determined by Sec. 21.3046 
(a), (b), or (d) expired.

(Authority: 38 U.S.C. 3512(f), 3698)

    (d) Exclusions. No eligible spouse or surviving spouse shall be 
authorized an education loan if he or she has defaulted on a previous 
education loan and there is a remaining unliquidated payment due VA.

(Authority: 38 U.S.C. 3512(f), 3698)


Sec. 21.4502   [Amended]

    57. In Sec. 21.4502, paragraph (a) is amended by removing ``veteran 
or other eligible person'' and adding, in its place, ``spouse or 
surviving spouse''; paragraph (b)(2) is amended by removing ``veteran 
or other eligible person'' and adding, in its place, ``eligible spouse 
or surviving spouse''; paragraph (b)(3) is amended by removing 
``veteran or other eligible person'' and adding, in its place, 
``eligible spouse or surviving spouse''; and paragraph (b)(4) is 
amended by removing ``veteran or other eligible person'' wherever it 
appears, and adding, in its place, ``eligible spouse or surviving 
spouse''.
    58. In Sec. 21.4503, paragraph (a)(1) is amended by removing 
``veteran or other eligible person'' and adding, in its place, 
``eligible spouse or surviving spouse''; paragraphs (b)(4), (b)(5), 
(b)(10), and (b)(11) are removed; paragraphs (b)(6), (b)(7), (b)(8), 
and (b)(9) are redesignated as paragraphs (b)(4), (b)(5), (b)(6), and 
(b)(7), respectively; the authority citation following newly 
redesignated paragraph (b)(4) is amended by removing ``3698(b)'' and 
adding, in its place, ``3512(f), 3698(b)''; newly redesignated 
paragraph (b)(5) is amended by removing ``veteran or other eligible 
person'' and adding, in its place, ``eligible spouse or surviving 
spouse''; newly redesignated paragraph (b)(7) is amended by removing 
``veteran or other eligible person'' and adding, in its place, ``spouse 
or surviving spouse''; and paragraph (b)(2) and newly redesignated 
paragraph (b)(6) are revised to read as follows:


Sec. 21.4503   Determination of loan amount.

* * * * *
    (b) Amount. * * *
    (2) The aggregate of the amounts any eligible spouse or surviving 
spouse may borrow for an education loan may not exceed $2,500 in any 
one academic year. It also may not exceed an amount determined by 
multiplying the number of months of educational assistance to which the 
eligible spouse or surviving spouse would be entitled were it not for 
the expiration of his or her delimiting period under 38 U.S.C. 3511 
times $376.

(Authority: 38 U.S.C. 3512(f), 3698)
* * * * *
    (6) An eligible spouse or surviving spouse may receive more than 
one loan covering separate loan periods, subject to paragraphs (b)(3) 
and (b)(7) of this section.
* * * * *
    59. In Sec. 21.4504, paragraph (d) is amended by removing ``veteran 
or other eligible person'' each place it appears, and adding, in its 
place, ``spouse or surviving spouse'' and by removing ``veteran's or 
eligible person's'' and adding, in its place, ``eligible spouse's or 
surviving spouse's''; paragraph (e) is amended by removing ``veteran or 
eligible person'' and adding, in its place, ``spouse or surviving 
spouse''; paragraph (f) is amended by removing ``veteran or eligible 
person'' each place it appears, and adding, in its place, ``spouse or 
surviving spouse''; paragraph (g) is amended by removing ``A veteran or 
eligible person'' and adding, in its place, ``An eligible spouse or 
surviving spouse''; and paragraph (a) introductory text and paragraph 
(a)(3)(ii) are revised to read as follows:


Sec. 21.4504   Promissory note.

    (a) General. The agreement by VA to loan money pursuant to 38 
U.S.C. 3512(f) and 3698 to any eligible spouse or surviving spouse 
shall be in the form of a promissory note which shall include:
* * * * *
    (3) * * *
    (ii) For loans of less than $600, 1 year and 7 months after such 
date for the first $50 of the loan plus 1 additional month for each 
additional $5 of the loan.
* * * * *


Sec. 21.4505   [Amended]

    60. In Sec. 21.4505, paragraph (a) is amended by removing ``veteran 
or eligible person'' each place it appears, and adding, in its place, 
``eligible spouse or surviving spouse''; paragraph (b)(1) is amended by 
removing ``veteran or eligible person'' and adding, in its place, 
``eligible spouse or surviving spouse''; paragraph (b)(2) introductory 
text is amended by removing ``veterans and other eligible persons'',and 
adding, in its place, ``spouses or surviving spouses''; and the 
authority citation following paragraph (b) is amended by removing 
``3698'' and adding, in its place, ``3512(f), 3698''.


Sec. 21.4507   [Amended]

    61. In Sec. 21.4507, paragraph (a) is amended by removing 
``persons'' and adding, in its place, ``spouses and surviving 
spouses''; paragraph (b) is amended by removing ``veterans and other 
eligible persons'' and adding, in its place, ``spouses and surviving 
spouses''; and the authority citation is amended by removing ``3696'' 
and adding, in its place, ``3512(f), 3696''.

Subpart F-2--[Removed]

    62. Subpart F-2 is removed.

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

    63. The authority citation for subpart K continues to read as 
follows:

    Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise 
noted.

    64. The heading for subpart K is revised to read as set forth 
above.
    65. In Sec. 21.7000, paragraph (b) is revised to read as follows:


Sec. 21.7000  Establishment of educational assistance program.

* * * * *
    (b) Purpose. The purpose of this program is as stated in 38 U.S.C. 
3001.

(Authority: 38 U.S.C. 3001)

    66. In Sec. 21.7044, the section heading and paragraphs (a)(1) and 
(b)(1) are revised to read as follows:


Sec. 21.7044   Persons with eligibility under 38 U.S.C. chapter 34.

* * * * *
    (a) Eligibility based solely on active duty. * * *
    (1) The individual must have met the requirements of 38 U.S.C. 
chapter 34, as in effect on December 31, 1989, establishing eligibility 
for educational assistance allowance under that chapter;
* * * * *
    (b) Eligibility based on combined active duty service and service 
in the Selected Reserve. * * *
    (1) The individual must have met the requirements of 38 U.S.C. 
chapter 34, as in effect on December 31, 1989, establishing eligibility 
for educational assistance allowance under that chapter;
* * * * *


Sec. 21.7135   [Amended]

    67. In Sec. 21.7135, paragraph (f)(3) is amended by removing 
``21.7140(b) of this part'' and adding, in its place, ``21.7140(d)''; 
paragraph (i) is amended by removing ``of this part'' wherever it 
appears; paragraphs (j)(1), (k)(1), (n), and (o) are amended by 
removing ``of this part''; paragraph (p) is amended by

[[Page 26117]]

removing ``of this part'' each place it appears; paragraph (r) is 
amended by removing ``of this part'' each place it appears; and 
paragraph (t) is amended by removing ``of this part''.


Sec. 21.7140   [Amended]

    68. In Sec. 21.7140, paragraph (c)(1)(i) is amended by removing 
``of this part''; paragraph (c)(2) introductory text is amended by 
removing ``after-'' and adding, in its place, ``after--''; paragraph 
(c)(2)(i) is amended by removing ``of this part''; paragraph (c)(2)(ii) 
is amended by removing ``worked'' and adding, in its place, 
``worked.''; paragraph (d)(1) is amended by removing ``of this part'' 
wherever it appears; paragraphs (d)(2)(i) and (d)(2)(ii) are amended by 
removing ``Vocational Rehabilitation and'' wherever it appears; and 
paragraph (e)(2) is amended by removing ``of this part''.
    69. Section 21.7141 is revised to read as follows:


Sec. 21.7141   Tutorial assistance.

    An individual who is otherwise eligible to receive benefits under 
the Montgomery GI Bill - Active Duty may receive supplemental monetary 
assistance to provide tutorial services. In determining whether VA will 
pay the individual this assistance, VA will apply the provisions of 
Sec. 21.4236.

(Authority: 38 U.S.C. 3019, 3492)


Sec. 21.7145   [Removed]

    70. Section 21.7145 is removed.


Sec. 21.7154   [Amended]

    71. In Sec. 21.7154, paragraph (b) is removed, and paragraph (c) is 
redesignated as paragraph (b).


Sec. 21.7158   [Amended]

    72. In Sec. 21.7158, paragraph (b)(1) is amended by removing 
``21.744(b)'' and adding, in its place, ``21.7144(b)''.

[FR Doc. 96-12548 Filed 5-23-96; 8:45 am]
BILLING CODE 8320-01-P