Armed Forces, who, with the support of their fami-
lies and loved ones, develop into professional, dedi-
cated, and experienced officers, noncommissioned of-
ficers, and petty officers. 
(6) The achievement of educational goals, in-
cluding obtaining the means to a college degree, has 
traditionally been a key reason for volunteering for 
service in the Armed Forces. For members who 
serve a career in the Armed Forces, this goal ex-
tends to their spouses and children and has resulted 
in requests for the option to transfer educational 
benefits under the GI Bill to spouses and children. 
(7) As in the aftermath of World War II, col-
leges and universities throughout the United States 
should demonstrate their and the Nation’s apprecia-
tion to veterans by dedicated programs providing fi-
nancial aid. 
(8) It is in that national interest for the United 
States— 
(A) to express the gratitude of the Amer-
ican people by assisting those who have honor-
ably served in the Armed Forces and returned 
to civilian life to achieve their educational goals; 
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(B) to provide significant educational bene-
fits to provide incentives for successful recruit-
ing; 
(C) to motivate continued service in the All 
Volunteer Force by those members with the po-
tential for military careers and their spouses 
and children; and 
(D) to assist those who serve and their 
families in achieving their personal goals, in-
cluding higher education, while progressing in a 
military career. 
SEC. 3. PLAN ON COORDINATION OF CURRENT EDU-
CATIONAL ASSISTANCE PROGRAMS AND DE-
VELOPMENT OF ADDITIONAL EDUCATIONAL 
ASSISTANCE 
PROGRAMS 
TO 
ENABLE 
CA-
REER-ORIENTED MEMBERS OF THE ARMED 
FORCES TO ATTAIN A BACHELOR’S DEGREE. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the outstanding men and women who volun-
teer for service in the Armed Forces and dem-
onstrate through their service the ability, motivation, 
and commitment to serve as career commissioned of-
ficers, noncommissioned officers, petty officers, and 
warrant officers should be given the opportunities 
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and resources needed to obtain a bachelor’s degree 
before they complete active duty and retire from the 
Armed Forces; and 
(2) every effort should be made by the leaders 
of the Army, Navy, Marine Corps, Air Force, and 
Coast Guard to demonstrate to members of the 
Armed Forces who are willing to serve and study 
that the dual goals of attaining a bachelor’s degree 
and a distinguished military career are achievable 
and not mutually exclusive. 
(b) PLAN TO COORDINATE
AND DEVELOP EDU-
CATIONAL ASSISTANCE PROGRAMS.— 
(1) PLAN
REQUIRED.—The Secretary of De-
fense, in consultation with the Secretary of Veterans 
Affairs, shall develop a plan to make the attainment 
of a bachelor’s degree an achievable goal for mem-
bers of the Armed Forces who are motivated to-
wards careers in the Armed Forces and who are able 
and willing to accept the challenges of military duty 
and pursuit of college level studies. 
(2) ADVICE
OF
THE
SERVICE
CHIEFS.—The 
Secretary of Defense shall develop the plan required 
by paragraph (1) with the advice of the Chief of 
Staff of the Army, the Chief of Naval Operations, 
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the Chief of Staff of the Air Force, and the Com-
mandant of the Marine Corps. 
(3) ELEMENTS.—The plan required by para-
graph (1) shall include the following: 
(A) Appropriate elements of current pro-
grams to assist members of the Armed Forces 
in obtaining college-level education, including 
tuition assistance programs, distance learning 
programs, and technical training and education 
provided by the military departments, including 
programs currently administered by the Sec-
retary of Veterans Affairs. 
(B) Appropriate elements of current pro-
grams to provide members of the Armed Forces 
with assistance in obtaining college-level credit 
for the technical training and experience they 
undergo during their military career. 
(C) One or more additional education pro-
grams to assist members of the Armed Forces 
in obtaining a college-level education, including 
mechanisms for the provision by the military 
departments of guidance, mentoring, and re-
sources to assist members in achieving their 
professional military and personal educational 
goals. 
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(D) Such additional programs or mecha-
nisms, such as sabbaticals from the Armed 
Forces or college-level education provided or 
funded by the military departments, as the Sec-
retary of Defense considers appropriate to as-
sist members of the Armed Forces in making 
adequate progress towards a bachelor’s degree 
from an accredited institution of higher edu-
cation while continuing a successful military ca-
reer. 
(E) Such mechanisms for the application 
of the elements of the plan to members of the 
National Guard and Reserves as the Secretary 
of Defense considers appropriate to ensure that 
such members receive appropriate assistance in 
achieving their professional military and per-
sonal educational goals. 
(F) Such elements of current programs of 
the military departments for in-service edu-
cation of members of the Armed Forces as the 
Secretary of Defense considers appropriate to 
maintain and enhance the recruitment and re-
tention by the Armed Forces of highly trained 
and experienced military leaders. 
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(4) SUBMITTAL TO CONGRESS.—The Secretary 
of Defense shall submit to the Committees on Armed 
Services of the Senate and the House of Representa-
tives a report setting forth the plan required by 
paragraph (1) not later than August 1, 2009. 
SEC. 4. INCREASE IN RATES OF BASIC EDUCATIONAL AS-
SISTANCE 
UNDER 
THE 
MONTGOMERY 
GI 
BILL. 
(a) INCREASE IN GENERAL RATES AND AUGMENTED 
RATES FOR EXTENDED SERVICE.— 
(1) RATES BASED ON THREE YEARS OF OBLI-
GATED SERVICE.—Subsection (a)(1) of section 3015 
of title 38, United States Code, is amended by strik-
ing ‘‘on a full-time basis, at the monthly rate of’’ 
and all that follows and inserting ‘‘on a full-time 
basis— 
‘‘(A) in the case of an individual who 
served on active duty in the Armed Forces for 
12 or more years, at the monthly rate of— 
‘‘(i) for months occurring during fis-
cal year 2009, $1,650; 
‘‘(ii) for months occurring during fis-
cal year 2010, $1,800; 
‘‘(iii) for months occurring during fis-
cal year 2011, $2,000; and 
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by such mechanisms, as the Secretary shall prescribe for 
purposes of this section.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 30 of such title is 
amended by adding at the end of the items relating 
to subchapter II the following new item: 
‘‘3020A. Educational stipend.’’. 
(b) EFFECTIVE DATE.—Section 3020A of title 38, 
United States Code, as added by subsection (a), shall take 
effect on the date that is one year after the date of the 
enactment of this Act. 
SEC. 6. INCREASE IN RATES OF EDUCATIONAL ASSISTANCE 
FOR MEMBERS OF THE SELECTED RESERVE. 
(a) INCREASE IN RATES.—Section 16131(b)(1) of 
title 10, United States Code, is amended— 
(1) in subparagraph (A), by striking ‘‘$251’’ 
and inserting ‘‘$634’’; 
(2) in subparagraph (B), by striking ‘‘$188’’ 
and inserting ‘‘$474’’; and 
(3) in subparagraph (C), by striking ‘‘$125’’ 
and inserting ‘‘$314’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
subsection (a) shall take effect on October 1, 2008, 
and shall apply with respect to educational assist-
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ance payable for months beginning on or after that 
date. 
(2) NO COST-OF-LIVING ADJUSTMENT.—No ad-
justment under paragraph (2) of section 16131(b) of 
title 10, United States Code, shall be made in the 
rates of educational assistance payable under para-
graph (1) of such section for fiscal year 2009. 
SEC. 7. INCREASE IN RATES OF EDUCATIONAL ASSISTANCE 
FOR RESERVE COMPONENT MEMBERS SUP-
PORTING CONTINGENCY OPERATIONS AND 
OTHER OPERATIONS WITH EXTENDED SERV-
ICE IN THE SELECTED RESERVE. 
(a) INCREASE IN RATES FOR EXTENDED SERVICE.— 
Paragraph (2) of section 16162(c) of title 10, United 
States Code, is amended to read as follows: 
‘‘(2) The educational assistance allowance provided 
under this chapter shall be the amount as follows (as ad-
justed under paragraphs (3) and (4)): 
‘‘(A) In the case of a member who serves an ag-
gregate of 12 years or more in the Selected Reserve 
of the Ready Reserve, the amount provided under 
section 3015(a)(1)(A) of title 38 for the fiscal year 
concerned, except that if a member otherwise cov-
ered by this subparagraph ceases serving in the Se-
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lected Reserve the amount shall be the amount pro-
vided under subparagraph (B) of this paragraph. 
‘‘(B) In the case of any other member, the 
amount provided under section 3015(a)(1)(B) of 
title 38 for the fiscal year concerned.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on October 1, 2008, and 
shall apply with respect to educational assistance payable 
for months beginning on or after that date. 
SEC. 8. ENHANCEMENT OF TRANSFERABILITY OF ENTITLE-
MENT TO EDUCATIONAL ASSISTANCE. 
(a) MODIFICATION OF AUTHORITY TO TRANSFER 
ENTITLEMENT UNDER MONTGOMERY GI BILL.— 
(1) IN
GENERAL.—Subsection (a) of section 
3020 of title 38, United States Code, is amended to 
read as follows: 
‘‘(a) IN GENERAL.—Subject to the provisions of this 
section, the Secretary of Defense shall authorize each Sec-
retary concerned to permit an individual described in sub-
section (b) who is entitled to basic educational assistance 
under this subchapter to elect to transfer to one or more 
of the dependents specified in subsection (c) the unused 
portion of such individual’s entitlement to such assistance, 
subject to the limitation under subsection (d).’’. 
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(2) ELIGIBLE INDIVIDUALS.—Subsection (b) of 
such section is amended to read as follows: 
‘‘(b) ELIGIBLE
INDIVIDUALS.—An individual re-
ferred to in subsection (a) is any member of the Armed 
Forces serving on active duty or as a member of the Se-
lected Reserve who, at the time of the approval by the 
Secretary concerned of the member’s request to transfer 
entitlement to basic educational assistance under this sec-
tion— 
‘‘(1) has completed six years of service in the 
Armed Forces; and 
‘‘(2) meets such other requirements as the Sec-
retary of Defense may prescribe for purposes of this 
section.’’. 
(3) LIMITATIONS ON MONTHS OF TRANSFER.— 
Subsection (d) of such section is amended to read as 
follows: 
‘‘(d) NUMBER OF MONTHS TRANSFERRABLE.—(1) 
Except as provided in paragraphs (2) and (3), an indi-
vidual may transfer under this section any number of 
months of unused entitlement of the individual to basic 
educational assistance under this chapter. 
‘‘(2) In the case of an individual who has completed 
at least six but less than 12 years of service in the Armed 
Forces at the time of the approval by the Secretary con-
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cerned of the individual’s request to transfer entitlement 
under this section, the number of months that may be 
transferred by the individual under this section may not 
exceed the lesser of— 
‘‘(A) the number of months transferrable by the 
individual under paragraph (1); or 
‘‘(B) 18 months.’’. 
(4) TIMING, REVOCATION, AND MODIFICATION 
OF
TRANSFER.—Subsection (f) of such section is 
amended— 
(A) in paragraph (1), by striking ‘‘without 
regard’’ and all that follows and inserting 
‘‘while the individual is a member of the Armed 
Forces.’’; and 
(B) in paragraph (2)(A), by inserting 
‘‘while the individual is serving as a member of 
the Armed Forces or in the Selected Reserve’’ 
after ‘‘at any time’’. 
(5) EXCLUSION FROM MARITAL PROPERTY.— 
Subsection (f) of such section is further amended by 
adding at the end the following new paragraph: 
‘‘(3) Entitlement transferred under this section may 
not be treated as marital property, or the asset of a mar-
ital estate, subject to division in a divorce or other civil 
proceeding.’’. 
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(6) OVERPAYMENT.—Subsection (i) of such sec-
tion is amended— 
(A) by striking ‘‘(1)’’ before ‘‘In the 
event’’; and 
(B) by striking paragraphs (2) and (3). 
(7) REGULATIONS.—Subsection (k) of such sec-
tion is amended to read as follows: 
‘‘(k) REGULATIONS.—The Secretary of Defense shall, 
in coordination with the Secretary of Veterans Affairs, 
prescribe regulations for purposes of this section. Such 
regulations shall specify the following: 
‘‘(1) The circumstances under which the Secre-
taries concerned may permit and approve transfers 
of entitlement under this section. 
‘‘(2) Such requirements for eligibility for trans-
fer of entitlement under this section as the Secretary 
of Defense considers appropriate for purposes of 
subsection (b)(2). 
‘‘(3) The manner and effect of an election to 
modify or revoke a transfer of entitlement under 
subsection (f)(2).’’. 
(8) HEADING
AMENDMENT.—The heading of 
such section is amended to read as follows: 
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‘‘§ 3020. Transfer of entitlement to basic educational 
assistance’’. 
(9) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 30 of such title is 
amended by striking the item relating to section 
3020 and inserting the following: 
‘‘3020. Transfer of entitlement to basic educational assistance.’’. 
(b) AUTHORITY FOR TRANSFER OF ENTITLEMENT 
UNDER RESERVE COMPONENTS EDUCATIONAL ASSIST-
ANCE PROGRAMS.— 
(1) SELECTED RESERVE PROGRAM.— 
(A) IN GENERAL.—Chapter 1606 of title 
10, United States Code, is amended by insert-
ing after section 16131a the following new sec-
tion: 
‘‘§ 16131b. Transfer of entitlement to educational as-
sistance 
‘‘(a) IN GENERAL.—Subject to the provisions of this 
section, the Secretary concerned may permit a member of 
the Armed Forces described in subsection (b) who is enti-
tled to educational assistance under this chapter to elect 
to transfer to one or more of the dependents specified in 
subsection (c) a portion of such member’s entitlement to 
such assistance, subject to the limitations under sub-
section (d). 
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‘‘(b) ELIGIBLE MEMBERS.—A member described in 
this subsection is a member of the Selected Reserve of the 
Ready Reserve who, at the time of the approval of the 
member’s request to transfer entitlement to educational 
assistance under this section— 
‘‘(1) has completed at least six years of service 
in the Selected Reserve; and 
‘‘(2) meets such other requirements as the Sec-
retary of Defense may prescribe for purposes of this 
section. 
‘‘(c) ELIGIBLE DEPENDENTS.—A member approved 
to transfer an entitlement to educational assistance under 
this section may transfer the member’s entitlement as fol-
lows: 
‘‘(1) To the member’s spouse. 
‘‘(2) To one or more of the member’s children. 
‘‘(3) To a combination of the individuals re-
ferred to in paragraphs (1) and (2). 
‘‘(d) NUMBER OF MONTHS TRANSFERRABLE.—(1) 
Except as provided in paragraph (2), a member may 
transfer under this section any number of months of un-
used entitlement of the member to educational assistance 
under this chapter. 
‘‘(2) In the case of a member who has completed at 
least six but less than 12 years of service in the Selected 
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Reserve at the time of the approval by the Secretary con-
cerned of the member’s request to transfer entitlement 
under this section, the number of months that may be 
transferred by the member under this section may not ex-
ceed the lesser of— 
‘‘(A) the number of months transferrable by the 
individual under paragraph (1); or 
‘‘(B) 18 months. 
‘‘(e) DESIGNATION
OF TRANSFEREE.—A member 
transferring an entitlement to educational assistance 
under this section shall— 
‘‘(1) designate the dependent or dependents to 
whom such entitlement is being transferred; 
‘‘(2) designate the number of months of such 
entitlement to be transferred to each such depend-
ent; and 
‘‘(3) specify the period for which the transfer 
shall be effective for each dependent designated 
under paragraph (1). 
‘‘(f) TIME FOR TRANSFER; REVOCATION AND MODI-
FICATION.—(1) Subject to the time limitation for use of 
entitlement under section 16133 of this title, a member 
approved to transfer entitlement to educational assistance 
under this section may transfer such entitlement at any 
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time after the approval of the member’s request to trans-
fer such entitlement. 
‘‘(2)(A) A member transferring entitlement under 
this section may modify or revoke at any time the transfer 
of any unused portion of the entitlement so transferred. 
‘‘(B) The modification or revocation of the transfer 
of entitlement under this paragraph shall be made by the 
submittal of written notice of the action to both the Sec-
retary concerned and the Secretary of Veterans Affairs. 
‘‘(3) Entitlement transferred under this section may 
not be treated as marital property, or the asset of a mar-
ital estate, subject to division in a divorce or other civil 
proceeding. 
‘‘(g) COMMENCEMENT
OF USE.—A dependent to 
whom entitlement to educational assistance is transferred 
under this section may not commence the use of the trans-
ferred entitlement until— 
‘‘(1) in the case of entitlement transferred to a 
spouse, the completion by the member making the 
transfer of six years of service in the Selected Re-
serve; or 
‘‘(2) in the case of entitlement transferred to a 
child, both— 
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‘‘(A) the completion by the member mak-
ing the transfer of six years of service in the 
Selected Reserve; and 
‘‘(B) either— 
‘‘(i) the completion by the child of the 
requirements of a secondary school di-
ploma (or equivalency certificate); or 
‘‘(ii) the attainment by the child of 18 
years of age. 
‘‘(h) ADDITIONAL ADMINISTRATIVE MATTERS.—(1) 
The use of any entitlement to educational assistance 
transferred under this section shall be charged against the 
entitlement of the member making the transfer at the rate 
of one month for each month of transferred entitlement 
that is used. 
‘‘(2) Except as provided under subsection (e)(2) and 
subject to paragraphs (5) and (6), a dependent to whom 
entitlement is transferred under this section is entitled to 
educational assistance under this chapter in the same 
manner as the member from whom the entitlement was 
transferred. 
‘‘(3) The monthly rate of educational assistance pay-
able to a dependent to whom entitlement is transferred 
under this section shall be the monthly amount payable 
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to the member making the transfer under section 16131 
or 16132a of this title, as applicable. 
‘‘(4)(A) The death of a member transferring entitle-
ment under this section shall not affect the use of the enti-
tlement by the dependent to whom the entitlement is 
transferred. 
‘‘(B) The involuntary separation or retirement of a 
member transferring entitlement under this section be-
cause of a nondiscretionary provision of law for age or for 
years of service, as described in section 16133(b) of this 
title, or medical disqualification which is not the result of 
gross negligence or misconduct of the member shall not 
affect the use of entitlement by the dependent to whom 
the entitlement is transferred. 
‘‘(5) A child to whom entitlement is transferred under 
this section may not use any entitlement so transferred 
after attaining the age of 26 years. 
‘‘(6) The purposes for which a dependent to whom 
entitlement is transferred under this section may use such 
entitlement shall include the pursuit and completion of the 
requirements of a secondary school diploma (or equiva-
lency certificate). 
‘‘(7) The administrative provisions of this chapter 
shall apply to the use of entitlement transferred under this 
section, except that the dependent to whom the entitle-
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ment is transferred shall be treated as the eligible member 
for purposes of such provisions. 
‘‘(i) OVERPAYMENT.—(1) In the event of an overpay-
ment of educational assistance with respect to a dependent 
to whom entitlement is transferred under this section, the 
dependent and the member making the transfer shall be 
jointly and severally liable to the United States for the 
amount of the overpayment for purposes of section 3685 
of title 38. 
‘‘(2)(A) Except as provided in subparagraph (B), in 
the case of a member transferring entitlement under this 
section whose eligibility is terminated under section 
16134(2) of this title, the amount of any transferred enti-
tlement under this section that is used by a dependent 
of the member as of the date of the failure of the member 
to participate satisfactorily in training as specified in sec-
tion 16134(2) of this title shall be treated as an overpay-
ment of educational assistance under paragraph (1). 
‘‘(B) Subparagraph (A) shall not apply in the case 
of a member who fails to complete service agreed to by 
the member— 
‘‘(i) by reason of the death of the member; or 
‘‘(ii) for a reason referred to in section 
16133(b) of this title. 
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‘‘(j) APPROVALS OF TRANSFER SUBJECT TO AVAIL-
ABILITY OF APPROPRIATIONS.—The Secretary concerned 
may approve transfers of entitlement to educational assist-
ance under this section in a fiscal year only to the extent 
that appropriations for military personnel are available in 
that fiscal year for purposes of making deposits in the De-
partment of Defense Education Benefits Fund under sec-
tion 2006 of this title in that fiscal year to cover the 
present value of future benefits payable from the Fund 
for the Department of Defense portion of payments of 
educational assistance attributable to increased usage of 
benefits as a result of such transfers of entitlement in that 
fiscal year. 
‘‘(k) REGULATIONS.—The Secretary of Defense shall, 
in consultation with the Secretary of Veterans Affairs, 
prescribe regulations for purposes of this section. Such 
regulations shall specify the following: 
‘‘(1) The circumstances under which the Secre-
taries concerned may permit and approve transfers 
of entitlement under this section. 
‘‘(2) Such requirements for eligibility for trans-
fer of entitlement under this section as the Secretary 
of Defense considers appropriate for purposes of 
subsection (b)(2). 
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‘‘(3) The manner and effect of an election to 
modify or revoke a transfer of entitlement under 
subsection (f)(2).’’. 
(B) CLERICAL AMENDMENT.—The table of 
sections at the beginning of chapter 1606 of 
such title is amended by inserting after the 
item relating to section 16131a the following 
new item: 
‘‘16131b. Transfer of entitlement to educational assistance.’’. 
(2) PROGRAM FOR RESERVE COMPONENTS SUP-
PORTING CONTINGENCY AND OTHER OPERATIONS.— 
(A) IN GENERAL.—Chapter 1607 of title 
10, United States Code, is amended by insert-
ing after section 16162a the following new sec-
tion: 
‘‘§ 16162b. Transfer of entitlement to educational as-
sistance 
‘‘(a) IN GENERAL.—Subject to the provisions of this 
section, the Secretary concerned may permit a member of 
the Armed Forces described in subsection (b) who is enti-
tled to educational assistance under this chapter to elect 
to transfer to one or more of the dependents specified in 
subsection (c) a portion of such member’s entitlement to 
such assistance, subject to the limitations under sub-
section (d). 
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‘‘(b) ELIGIBLE MEMBERS.—A member referred to in 
subsection (a) is a member of the Armed Forces who, at 
the time of the approval of the member’s request to trans-
fer entitlement to educational assistance under this sec-
tion— 
‘‘(1) has completed at least six years of service 
in the Armed Forces; and 
‘‘(2) meets such other requirements as the Sec-
retary of Defense may prescribe for purposes of this 
section. 
‘‘(c) ELIGIBLE DEPENDENTS.—A member approved 
to transfer an entitlement to educational assistance under 
this section may transfer the member’s entitlement as fol-
lows: 
‘‘(1) To the member’s spouse. 
‘‘(2) To one or more of the member’s children. 
‘‘(3) To a combination of the individuals re-
ferred to in paragraphs (1) and (2). 
‘‘(d) NUMBER OF MONTHS TRANSFERRABLE.—(1) 
Except as provided in paragraph (2), a member may 
transfer under this section any number of months of un-
used entitlement of the member to educational assistance 
under this chapter. 
‘‘(2) In the case of a member who has completed at 
least six but less than 12 years of service in the Armed 
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Forces at the time of the approval by the Secretary con-
cerned of the member’s request to transfer entitlement 
under this section, the number of months that may be 
transferred by the member under this section may not ex-
ceed the lesser of— 
‘‘(A) the number of months transferrable by the 
individual under paragraph (1); or 
‘‘(B) 18 months. 
‘‘(e) DESIGNATION
OF TRANSFEREE.—A member 
transferring an entitlement to educational assistance 
under this section shall— 
‘‘(1) designate the dependent or dependents to 
whom such entitlement is being transferred; 
‘‘(2) designate the number of months of such 
entitlement to be transferred to each such depend-
ent; and 
‘‘(3) specify the period for which the transfer 
shall be effective for each dependent designated 
under paragraph (1). 
‘‘(f) TIME FOR TRANSFER; REVOCATION AND MODI-
FICATION.—(1) Subject to the time limitation for use of 
entitlement under section 16164 of this title, a member 
approved to transfer entitlement to educational assistance 
under this section may transfer such entitlement only 
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while serving as a member of the Armed Forces when the 
transfer is executed. 
‘‘(2)(A) A member transferring entitlement under 
this section may modify or revoke at any time the transfer 
of any unused portion of the entitlement so transferred. 
‘‘(B) The modification or revocation of the transfer 
of entitlement under this paragraph shall be made by the 
submittal of written notice of the action to both the Sec-
retary concerned and the Secretary of Veterans Affairs. 
‘‘(g) COMMENCEMENT
OF USE.—A dependent to 
whom entitlement to educational assistance as transferred 
under this section may not commence the use of the trans-
ferred entitlement until— 
‘‘(1) in the case of entitlement transferred to a 
spouse, the completion by the member making the 
transfer of the years of service in the Armed Forces 
applicable to the member under subsection (b); or 
‘‘(2) in the case of entitlement transferred to a 
child, both— 
‘‘(A) the completion by the member mak-
ing the transfer of the years of service in the 
Armed Forces applicable to the member under 
subsection; and 
‘‘(B) either— 
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‘‘(i) the completion by the child of the 
requirements of a secondary school di-
ploma (or equivalency certificate); or 
‘‘(ii) the attainment by the child of 18 
years of age. 
‘‘(h) ADDITIONAL ADMINISTRATIVE MATTERS.—(1) 
The use of any entitlement to educational assistance 
transferred under this section shall be charged against the 
entitlement of the member making the transfer at the rate 
of one month for each month of transferred entitlement 
that is used. 
‘‘(2) Except as provided under subsection (e)(2) and 
subject to paragraphs (5) and (6), a dependent to whom 
entitlement is transferred under this section is entitled to 
educational assistance under this chapter in the same 
manner as the member from whom the entitlement was 
transferred. 
‘‘(3) The monthly rate of educational assistance pay-
able to a dependent to whom entitlement is transferred 
under this section shall be the monthly amount payable 
to the member making the transfer under section 16162 
or 16162a of this title, as applicable. 
‘‘(4) The death of a member transferring an entitle-
ment under this section shall not affect the use of the enti-
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tlement by the dependent to whom the entitlement is 
transferred. 
‘‘(5) A child to whom entitlement is transferred under 
this section may not use any entitlement so transferred 
after attaining the age of 26 years. 
‘‘(6) The purposes for which a dependent to whom 
entitlement is transferred under this section may use such 
entitlement shall include the pursuit and completion of the 
requirements of a secondary school diploma (or equiva-
lency certificate). 
‘‘(7) The administrative provisions of this chapter 
shall apply to the use of entitlement transferred under this 
section, except that the dependent to whom the entitle-
ment is transferred shall be treated as the eligible member 
for purposes of such provisions. 
‘‘(i) OVERPAYMENT.—In the event of an overpayment 
of educational assistance with respect to a dependent to 
whom entitlement is transferred under this section, the de-
pendent and the member making the transfer shall be 
jointly and severally liable to the United States for the 
amount of the overpayment for purposes of section 3685 
of title 38. 
‘‘(j) APPROVALS OF TRANSFER SUBJECT TO AVAIL-
ABILITY OF APPROPRIATIONS.—The Secretary concerned 
may approve transfers of entitlement to educational assist-
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ance under this section in a fiscal year only to the extent 
that appropriations for military personnel are available in 
that fiscal year for purposes of making deposits in the De-
partment of Defense Education Benefits Fund under sec-
tion 2006 of this title in that fiscal year to cover the 
present value of future benefits payable from the Fund 
for the Department of Defense portion of payments of 
educational assistance attributable to increased usage of 
benefits as result of such transfers of entitlement in that 
fiscal year. 
‘‘(k) REGULATIONS.—The Secretary of Defense, in 
consultation with the Secretary of Veterans Affairs, shall 
prescribe regulations for purposes of this section. Such 
regulations shall specify the following: 
‘‘(1) The circumstances under which the Secre-
taries concerned may permit and approve transfers 
of entitlement under this section. 
‘‘(2) Such requirements for eligibility for trans-
fer of entitlement under this section as the Secretary 
of Defense considers appropriate for purposes of 
subsection (b)(2). 
‘‘(3) The manner and effect of an election to 
modify or revoke a transfer of entitlement under 
subsection (f)(2).’’. 
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(B) CLERICAL AMENDMENT.—The table of 
sections at the beginning of chapter 1607 of 
such title is amended by inserting after the 
item relating to section 16162a the following 
new item: 
‘‘16162b. Transfer of entitlement to educational assistance.’’. 
(3) FUNDING
UNDER
DEPARTMENT
OF
DE-
FENSE
EDUCATION
BENEFITS
FUND.—Section 
2006(b)(2)(D) of title 10, United States Code, is 
amended by inserting before the period at the end 
the following: ‘‘, including payments attributable to 
increased usage of benefits as a result of transfers 
of entitlement to educational assistance under sec-
tions 16131b and 16162b of this title’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this subsection shall take effect on October 1, 2009. 
SEC. 9. USE OF EDUCATIONAL ASSISTANCE TO REPAY FED-
ERAL STUDENT LOANS. 
(a) USE OF EDUCATIONAL ASSISTANCE TO REPAY 
FEDERAL STUDENT LOANS.— 
(1) IN GENERAL.—Subchapter II of chapter 30 
of title 38, United States Code, as amended by sec-
tion 5(a) of this Act, is further amended by insert-
ing after section 3020A the following new section: 
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‘‘§ 3020B. Use of basic educational assistance benefits 
for repayment of Federal student loans 
‘‘(a) IN GENERAL.—An individual entitled to basic 
educational assistance under this subchapter who is serv-
ing on active duty in the Armed Forces may elect to apply 
amounts of basic educational assistance otherwise avail-
able to the individual under this subchapter to repay all 
or a portion of the outstanding principal and interest on 
any Federal student loan owed by the individual for the 
individual’s pursuit of a course of education. 
‘‘(b) DESIGNATION OF LOANS AND AMOUNTS PAY-
ABLE.—An individual electing under this section to apply 
amounts of basic educational assistance to the payment 
of the outstanding principal and interest on Federal stu-
dent loans shall designate (in such form and manner as 
the Secretary shall prescribe for purposes of this section) 
the following: 
‘‘(1) Each Federal student loan of the indi-
vidual for which payment shall be made under this 
section. 
‘‘(2) For each Federal student loan designated 
under paragraph (1), the monthly amount to be paid 
under this section. 
‘‘(c) LIMITATION ON AMOUNT OF PAYMENTS.—(1) 
The monthly amount payable with respect to an individual 
under this section may not exceed the monthly rate of 
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basic educational assistance to which the individual is oth-
erwise entitled under this subchapter at the time of pay-
ment of such monthly amount. 
‘‘(2) The aggregate amount of basic educational as-
sistance payable with respect to an individual under this 
section for any 12-month period may not exceed $6,000. 
‘‘(d) FREQUENCY
OF
PAYMENTS.—Payment of 
amounts of principal and interest on Federal student loans 
of an individual under this section shall be made on a 
monthly basis. 
‘‘(e) CESSATION
OF PAYMENTS.—Payments made 
under this section with respect to an individual shall cease 
if the individual ceases serving on active duty in the 
Armed Forces, effective as of the first month that begins 
after the date on which the individual ceases serving on 
active duty in the Armed Forces. 
‘‘(f) CHARGE AGAINST ENTITLEMENT.—The period 
of entitlement to basic educational assistance under this 
subchapter of an individual for whom payments are made 
under this section shall be charged at the rate of one 
month for each payment or aggregate of payments under 
this section that are equivalent in amount to the monthly 
rate of basic educational assistance to which the individual 
is otherwise entitled under this subchapter. 
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‘‘(g) REGULATIONS.—The Secretary shall prescribe 
such regulations as the Secretary considers appropriate 
for purposes of the administration of this section. 
‘‘(h) FEDERAL STUDENT LOAN DEFINED.—In this 
section, the term ‘Federal student loan’ means any loan 
made under title IV of the Higher Education Act of 1965 
(20 U.S.C. 1070 et seq.).’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions of subchapter II of chapter 30 of such title, as 
so amended, is further amended by inserting after 
the item relating to section 3020A the following new 
item: 
‘‘3020B. Use of basic educational assistance benefits for repayment of Federal 
student loans.’’. 
(b) EFFECTIVE DATE.—Section 3020B of title 38, 
United States Code, as added by subsection (a), shall 
apply with respect to educational assistance payable for 
months that begin on or after the date that is one year 
after the date of the enactment of this Act. 
SEC. 10. EDUCATIONAL ASSISTANCE FOR GRADUATES OF 
THE SERVICE ACADEMIES AND RESERVE OF-
FICERS’ TRAINING CORPS PROGRAMS. 
(a) ACTIVE DUTY PROGRAM.— 
(1) IN GENERAL.—Subsection (a)(1) of section 
3011 of title 38, United States Code, is amended— 
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(A) in subparagraph (B), by striking ‘‘or’’ 
at the end; 
(B) in subparagraph (C), by adding ‘‘or’’ 
at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) after September 30, 2009— 
‘‘(i) receives a commission as an offi-
cer in the Armed Forces— 
‘‘(I) upon graduation from the 
United States Military Academy, the 
United States Naval Academy, the 
United States Air Force Academy, or 
the Coast Guard Academy; or 
‘‘(II) upon completion of a Senior 
Reserve Officers’ Training Corps pro-
gram under chapter 103 of title 10; 
and 
‘‘(ii) completes at least five years of 
continuous active duty in the Armed 
Forces (excluding any period of obligated 
service in connection with receipt of a com-
mission as an officer in the Armed Forces 
under clause (i) and excluding any other 
period of obligated service in connection 
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with education, training, or instruction 
provided or funded, whether in whole or in 
part, by the United States);’’. 
(2) CONFORMING AMENDMENTS.—Such section 
is further amended— 
(A) in subsection (b), by striking ‘‘sub-
section (c)(1)’’ and inserting ‘‘subsection (c)’’; 
(B) in subsection (c)— 
(i) by striking ‘‘(1)’’ after ‘‘(c)’’; and 
(ii) by striking paragraphs (2) and 
(3); and 
(C) in subsection (e)(1), by striking ‘‘sub-
section (c)(1)’’ and inserting ‘‘subsection (c)’’. 
(b) SELECTED RESERVE PROGRAM.— 
(1) IN GENERAL.—Subsection (a)(1) of section 
3012 of such title is amended— 
(A) in subparagraph (B), by striking ‘‘or’’ 
at the end; 
(B) in subparagraph (C), by adding ‘‘or’’ 
at the end; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(D) after September 30, 2009— 
‘‘(i) receives a commission as an offi-
cer in the Armed Forces— 
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(ii) by striking paragraphs (2) and 
(3); and 
(C) in subsection (f)(1), by striking ‘‘sub-
section (d)(1)’’ and inserting ‘‘subsection (d)’’. 
(c) AMOUNT
OF
BASIC
EDUCATIONAL
ASSIST-
ANCE.—Section 3015(c) of such title is amended— 
(1) in paragraph (1), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraphs (2) and (3)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(3) Paragraph (1) of this section also applies to the 
following: 
‘‘(A) An individual entitled to an educational 
assistance allowance under section 3011 of this title 
by reason of subsection (a)(1)(D) of such section. 
‘‘(B) An individual entitled to an educational 
assistance allowance under section 3012 of this title 
by reason of subsection (a)(1)(D) of such section.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on October 1, 2009. 
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SEC. 11. OPPORTUNITY FOR CURRENT AND CERTAIN RE-
TIRED VEAP-ERA PERSONNEL TO ENROLL IN 
BASIC EDUCATIONAL ASSISTANCE UNDER 
THE MONTGOMERY GI BILL. 
(a) OPPORTUNITY FOR CURRENT AND CERTAIN RE-
TIRED VEAP-ERA PERSONNEL TO ENROLL.— 
(1) IN
GENERAL.—Chapter 30 of title 38, 
United States Code, is amended by inserting after 
section 3018C the following new section: 
‘‘§ 3018D. Opportunity for current and certain retired 
VEAP-era personnel to enroll 
‘‘(a) IN GENERAL.—An individual described in sub-
section (b) who makes an election described in paragraph 
(5) of such subsection is entitled to basic educational as-
sistance under this chapter, subject to the provisions of 
subsection (d). 
‘‘(b) COVERED INDIVIDUALS.—An individual de-
scribed in this subsection is an individual who meets each 
of the following requirements: 
‘‘(1) The individual first became a member of 
the Armed Forces or first entered on active duty as 
a member of the Armed Forces on or after January 
1, 1977, but before July 1, 1985. 
‘‘(2) The individual, as of the date of the indi-
vidual’s election under paragraph (5)— 
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‘‘(A) is serving on active duty without a 
break in service (other than as described in sec-
tion 3202(1)(C) of this title) since the date the 
individual first became such a member or first 
entered on active duty as such a member; or 
‘‘(B) is retired from the Armed Forces 
after serving at least 20 years on active duty in 
the Armed Forces, which service included serv-
ice on active duty in the Armed Forces on or 
after September 11, 2001, and elected not to 
participate in the program of educational assist-
ance under chapter 32 of this title. 
‘‘(3) The individual, before applying for benefits 
under this section, has completed the requirements 
of a secondary school diploma (or equivalency certifi-
cate) or has successfully completed the equivalent of 
12 semester hours in a program of education leading 
to a standard college degree, but has not completed 
the requirements for nor been awarded a bachelor’s 
degree. 
‘‘(4) The individual— 
‘‘(A) in the case of an individual described 
by paragraph (2)(A), is discharged with an hon-
orable discharge or released with service charac-
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terized as honorable by the Secretary con-
cerned; or 
‘‘(B) in the case of an individual described 
by paragraph (2)(B), was discharged with an 
honorable discharge or released with service 
characterized as honorable by the Secretary 
concerned. 
‘‘(5) During the one-year period beginning on 
October 1, 2009, the individual makes an irrevocable 
election to receive benefits under this section pursu-
ant to procedures which the Secretary of each mili-
tary department shall provide in accordance with 
regulations prescribed by the Secretary of Defense 
for the purpose of carrying out this section or which 
the Secretary of Transportation shall provide for 
such purpose with respect to the Coast Guard when 
it is not operating as a service in the Navy. 
‘‘(c) REDUCTION OF PAY; COLLECTION AND PAY-
MENT OF AMOUNTS.—(1) In the case of an individual de-
scribed by subsection (b) who makes an election under this 
section to become entitled to basic educational assistance 
under this chapter— 
‘‘(A) the basic pay or retired or retainer pay, as 
applicable, of the individual shall be reduced (in a 
manner determined by the Secretary concerned) 
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until the total amount by which such pay is reduced 
is $2,700; or 
‘‘(B) to the extent that the basic pay of the in-
dividual is not so reduced before the individual’s dis-
charge or release from active duty as described in 
subsection (d)(4)(A), the Secretary concerned shall 
collect from the individual an amount equal to the 
difference between $2,700 and the total amount of 
reductions with respect to the individual under sub-
paragraph (A). 
‘‘(2) An individual covered by paragraph (1) may at 
any time pay the Secretary concerned an amount equal 
to the difference between the total of the reductions other-
wise required with respect to the individual under that 
paragraph and the total amount of the reductions with 
respect to the individual under that paragraph at the time 
of the payment. 
‘‘(3) Any amounts collected under paragraph (1)(B) 
or paid under paragraph (2) shall be paid into the Depart-
ment of Defense Education Benefits Fund under section 
2006 of title 10. 
‘‘(4) The total amount of reductions in pay, or of col-
lections or payments, required with respect to an indi-
vidual under paragraph (1) shall be achieved not later 
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(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 30 of such title is 
amended by inserting after the item relating to sec-
tion 3018C the following new item: 
‘‘3018D. Opportunity for current and certain retired VEAP-era personnel to en-
roll.’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
3017(b)(1) of such title is amended— 
(1) in subparagraphs (A) and (C), by striking 
‘‘or 
3018C(e)’’ 
and 
inserting 
‘‘3018C(e), 
or 
3018D(c)’’; and 
(2) in subparagraph (B), by striking ‘‘or 
3018C(e) of this title’’ after ‘‘section 3018C(e), or 
3018D(c) of this title or paid by the individual 
under section 3018D(c) of this title’’. 
SEC. 12. COLLEGE PATRIOTS GRANT PROGRAM. 
(a) PROGRAM AUTHORIZED.— 
(1) IN
GENERAL.—Chapter 36 of title 38, 
United States Code, is amended by adding at the 
end the following new subchapter: 
‘‘SUBCHAPTER IV—COLLEGE PATRIOTS 
GRANTS 
‘‘§ 3699A. College Patriots Grant Program 
‘‘(a) PURPOSE.—It is the purpose of this section to 
provide, through a partnership with the Department and 
institutions of higher education, supplemental educational 
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grants to assist in making available the benefits of post-
secondary education to qualified veterans by meeting such 
veterans’ unmet financial need. 
‘‘(b) ESTABLISHMENT OF PROGRAM.—The Secretary 
shall carry out a supplemental educational grant program 
under which— 
‘‘(1) an institution of higher education partici-
pating in the program voluntarily provides a covered 
individual enrolled in the institution with the non- 
Federal share of a percentage of the covered individ-
ual’s unmet financial need determined in accordance 
with subsection (e); and 
‘‘(2) the Secretary provides the Federal share 
of a percentage of the covered individual’s unmet fi-
nancial need determined in accordance with sub-
section (e). 
‘‘(c) DESIGNATION
OF PROGRAM.—The program 
under this section shall be known as the ‘College Patriots 
Grant Program’. 
‘‘(d) INSTITUTIONAL ELIGIBILITY CRITERIA.—As-
sistance may be made available under this section only to 
an institution of higher education that satisfies any cri-
teria specified by the Secretary. Such criteria shall include 
an agreement or other appropriate assurance from the in-
stitution of higher education that— 
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‘‘(1) the non-Federal share of a covered individ-
ual’s unmet financial need awarded under this sec-
tion shall be provided from non-Federal resources, 
including— 
‘‘(A) institutional grants and scholarships; 
‘‘(B) tuition or fee waivers; 
‘‘(C) State scholarships; and 
‘‘(D) foundation or other charitable organi-
zation funds; and 
‘‘(2) funds made available under this section 
shall be provided to a covered individual for whom 
the institution of higher education has made a deter-
mination that the covered individual has an unmet 
financial need, which determination shall be made 
before including Federal student loans under title IV 
of the Higher Education Act of 1965 in the covered 
individual’s financial aid package. 
‘‘(e) FEDERAL SHARE; NON-FEDERAL SHARE.— 
‘‘(1) IN GENERAL.—The Secretary shall not ap-
prove an institution of higher education for partici-
pation in the College Patriots Grant Program unless 
the institution of higher education has provided, in 
the manner required by the Secretary, the following: 
‘‘(A) An agreement or other assurance that 
the institution of higher education will provide 
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the non-Federal share in accordance with this 
subsection. 
‘‘(B) Information on the specific methods 
by which the non-Federal share shall be paid. 
‘‘(C) An acknowledgment that the non- 
Federal share provided under this subsection 
shall supplement and not supplant other Fed-
eral and non-Federal funds. 
‘‘(2) FEDERAL AND NON-FEDERAL SHARES.— 
Each institution of higher education participating in 
the program under this section shall select one of 
the three contribution percentage tiers described in 
paragraph (3) for purposes of meeting a percentage 
of the unmet financial needs of covered individuals 
enrolled in the institution. 
‘‘(3) PERCENTAGE CONTRIBUTION TIERS.— 
‘‘(A) 25 PERCENT TIER.—In the case of a 
covered individual enrolled in the institution 
who has an unmet financial need that is— 
‘‘(i) less than $8,000, the non-Federal 
share shall be 12.5 percent of the unmet 
financial need and the Federal share shall 
be 12.5 percent of the unmet financial 
need, except that the Federal share shall 
not exceed $1,000; and 
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‘‘(ii) equal to or greater than $8,000, 
the Federal share shall be $1,000 and the 
non-Federal share shall be 25 percent of 
the covered individual’s unmet financial 
need minus $1,000. 
‘‘(B) 50 PERCENT TIER.—In the case of a 
covered individual enrolled in the institution 
who has an unmet financial need that is— 
‘‘(i) less than $8,000, the non-Federal 
share shall be 25 percent of the unmet fi-
nancial need and the Federal share shall 
be 25 percent of the unmet financial need, 
except that the Federal share shall not ex-
ceed $2,000; and 
‘‘(ii) equal to or greater than $8,000, 
the Federal share shall be $2,000 and the 
non-Federal share shall be 50 percent of 
the covered individual’s unmet financial 
need minus $2,000. 
‘‘(C) 100 PERCENT TIER.—In the case of 
a covered individual enrolled in the institution 
who has an unmet financial need that is— 
‘‘(i) less than $6,000, the non-Federal 
share shall be 50 percent of the unmet fi-
nancial need and the Federal share shall 
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be 50 percent of the unmet financial need, 
except that the Federal share shall not ex-
ceed $3,000; and 
‘‘(ii) equal to or greater than $6,000, 
the Federal share shall be $3,000 and the 
non-Federal share shall be 100 percent of 
the covered individual’s unmet financial 
need minus $3,000. 
‘‘(f) REGULATIONS.—The Secretary shall prescribe 
regulations necessary to implement and administer the 
College Patriots Grant Program, including regulations es-
tablishing the procedures for determining eligibility for the 
program, applying for supplemental educational grants 
under the program, and distributing the Federal share 
provided by the Secretary under the program. 
‘‘(g) OUTREACH.—The Secretary of Veterans Affairs, 
in coordination with the Secretary of Defense and the Sec-
retary of Education, shall— 
‘‘(1) make available to the public on the Inter-
net website of the Department— 
‘‘(A) a current list of institutions of higher 
education participating in the College Patriots 
Grant Program; and 
‘‘(B) information on the extent of partici-
pation of each institution of higher education 
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participating in the College Patriots Grant Pro-
gram; 
‘‘(2) make available to the public on the Inter-
net website of the Department information about all 
Federal and State education benefits that members 
of the regular components of the Armed Forces, 
members of the reserve components of the Armed 
Forces, veterans, and their dependents may be eligi-
ble to receive; and 
‘‘(3) make available to institutions of higher 
education information about the College Patriots 
Grant Program and take appropriate actions to en-
courage broad participation of institutions of higher 
education in the program. 
‘‘(h) AWARDS FOR INSTITUTIONAL RECOGNITION.— 
The Secretary may establish and administer an awards 
program to recognize the extent of an institution of higher 
education’s participation in the College Patriots Grant 
Program. 
‘‘(i) DEFINITIONS.—In this section: 
‘‘(1) COST OF ATTENDANCE.—The term ‘cost of 
attendance’ has the meaning given the term in sec-
tion 472 of the Higher Education Act of 1965 (20 
U.S.C. 1087ll). 
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‘‘(2) COVERED
INDIVIDUAL.—The term ‘cov-
ered individual’ means an individual who— 
‘‘(A) is enrolled in an institution of higher 
education that is participating in the College 
Patriots Grant Program; 
‘‘(B) has such amount of remaining enti-
tlement to educational assistance under chapter 
30 or 32 of this title, or under chapter 1606 or 
1607 of title 10, as the Secretary may require 
for purposes of this section; and 
‘‘(C) after receipt of any of the educational 
assistance described in subparagraph (B), has 
an unmet financial need to attend the institu-
tion of higher education for which a supple-
mental educational grant is sought. 
‘‘(3) INSTITUTION OF HIGHER EDUCATION.— 
The term ‘institution of higher education’ has the 
meaning given the term in section 102 of the Higher 
Education Act of 1965 (20 U.S.C. 1002). 
‘‘(4) UNMET
FINANCIAL
NEED.—The term 
‘unmet financial need’ means, with respect to a cov-
ered individual, the cost of attendance for the cov-
ered individual to attend an institution of higher 
education participating in the College Patriots Grant 
Program, minus the sum of— 
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‘‘(A) grant and work assistance received by 
the covered individual under title IV of the 
Higher Education Act of 1965 (20 U.S.C. 1070 
et seq.); and 
‘‘(B) any educational assistance payments 
received by the covered individual through any 
programs administered by the Department of 
Veterans Affairs or the Department of De-
fense.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 36 of such title is 
amended by adding at the end the following new 
items: 
‘‘SUBCHAPTER IV—COLLEGE PATRIOTS GRANTS 
‘‘3699A. College Patriots Grant Program.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect one year after the date of 
the enactment of this Act, and shall apply to terms, quar-
ters, or semesters beginning on or after that date. 
Æ 
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