‘‘(2) The Secretary shall make the determination 
under paragraph (1) after consultation with the Secretary 
of Education. 
‘‘(3) A determination made under paragraph (1) in 
a year shall take effect on October 1 of that year and 
apply with respect to basic educational assistance allow-
ances payable under this section for the fiscal year begin-
ning in that year. 
‘‘(4) Not later than September 30 each year, the Sec-
retary shall publish in the Federal Register the average 
monthly costs of tuition and expenses as determined under 
paragraph (1) in that year.’’. 
(c) EFFECTIVE DATES.—(1) The amendments made 
by subsection (a) shall apply with respect to payments for 
months beginning after September 30, 2005. 
(2) The amendment made by subsection (b) shall 
apply with respect to payments for months beginning after 
September 30, 2006. No adjustment in rates of edu-
cational assistance shall be made under section 3015(h) 
of title 38, United States Code, for months occurring dur-
ing fiscal year 2006.
SEC. 4. REPEAL OF PAY REDUCTION AND HIGH SCHOOL 
GRADUATION REQUIREMENT FOR PARTICI-
PATION IN BASIC EDUCATIONAL ASSISTANCE 
UNDER THE MONTGOMERY GI BILL. 
(a) REPEAL OF PAY REDUCTION AND ELECTION OF 
BENEFITS.—(1) Section 3011 of title 38, United States 
Code, is amended— 
(A) by striking subsection (b); and 
(B) in subsection (c), by striking paragraph (1) 
and redesignating paragraphs (2) and (3) as para-
graphs (1) and (2), respectively. 
(2) Section 3012 of such title is amended— 
(A) by striking subsection (c); and 
(B) in subsection (d), by striking paragraph (1) 
and redesignating paragraphs (2) and (3) as para-
graphs (1) and (2), respectively. 
(3) Section 3016(a)(1) of such title is amended by 
striking ‘‘, and does not make an election under section 
3011(c)(1) or section 3012(d)(1)’’. 
(4) The amendments made by this subsection shall 
take effect on October 1, 2005, and apply to individuals 
whose initial obligated period of active duty under section 
3011 or 3012 of title 38, United States Code, as the case 
may be, begins on or after such date. 
(5) Any reduction in the basic pay of an individual 
referred to in subsection (b) of section 3011 of title 38,
United States Code, by reason of such subsection, or of 
any individual referred to in subsection (c) of section 3012 
of such title by reason of such subsection, shall cease com-
mencing with months beginning after September 30, 
2005, and any obligation of such individual under such 
subsections, as the case may be, as of September 30, 
2005, shall be deemed to be fully satisfied as of such date. 
(b) REPEAL OF HIGH SCHOOL GRADUATION RE-
QUIREMENT.—(1) Section 3011(a) of title 38, United 
States Code, is amended— 
(A) by striking paragraph (2); and 
(B) by redesignating paragraph (3) as para-
graph (2). 
(2) Section 3012(a) of such title is amended— 
(A) by striking paragraph (2); and 
(B) by redesignating paragraph (3) as para-
graph (2). 
(3) Section 3018(b) of such title is amended— 
(A) by striking paragraph (4); 
(B) by inserting ‘‘and’’ at the end of paragraph 
(3)(C); and 
(C) by redesignating paragraph (5) as para-
graph (4). 
(4) The amendments made by this subsection shall 
take effect on the date of the enactment of this Act and
apply with respect to individuals applying for basic edu-
cational assistance under chapter 30 of title 38, United 
States Code, on or after such date. 
(c) EXCLUSION FROM INCOME FOR ELIGIBILITY DE-
TERMINATIONS FOR FEDERAL EDUCATIONAL LOANS.— 
Section 3015 of such title is amended— 
(1) by redesignating subsection (h), as amended 
in section 3(b), as subsection (i); and 
(2) by inserting after subsection (g) the fol-
lowing new subsection: 
‘‘(h) EXCLUSION FROM INCOME FOR ELIGIBILITY 
DETERMINATIONS
FOR
FEDERAL
EDUCATIONAL 
LOANS.—Notwithstanding any other provision of law, 
amounts payable by the Secretary under this subchapter 
with respect to an eligible individual shall not be consid-
ered as income for purposes of determining eligibility of 
such individual for education grants or loans under any 
other provision of Federal law.’’. 
SEC. 5. REPEAL OF DELIMITING DATE FOR USE OF ENTI-
TLEMENT TO BASIC EDUCATIONAL ASSIST-
ANCE UNDER THE MONTGOMERY GI BILL. 
(a) REPEAL.—Section 3031 of title 38, United States 
Code, and section 16133 of title 10, United States Code, 
are repealed.