(1) in subparagraph (B), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (C), by adding ‘‘or’’ at the 
end; and 
(3) by inserting after subparagraph (C) the fol-
lowing new subparagraph (D): 
‘‘(D) while in the Selected Reserve— 
‘‘(i) is first ordered to serve on active 
duty in the Armed Forces under section 
12301(a), 12301(d), 12301(g), 12302, or 
12304 of title 10, during the period begin-
ning on September 11, 2001, and ending 
December 31, 2006; and 
‘‘(ii) serves on active duty in the 
Armed Forces for one or more periods 
(whether continuous or otherwise) aggre-
gating not less than two years of service on 
active duty during a five period beginning 
on the date the individual is first ordered 
to serve on active duty during the period 
referred to in clause (i);’’. 
(b) DURATION OF ASSISTANCE.—Subsection (b) of 
section 3013 of such title is amended by striking ‘‘is enti-
tled to’’ and all that follows and inserting the following: 
‘‘is entitled to—
‘‘(1) one month of educational assistance bene-
fits under this chapter— 
‘‘(A) in the case of an individual described 
in section 3012(a)(1)(A) of this title, for each 
month of continuous active duty served by such 
individual after June 30, 1985, as part of the 
obligated period of active duty on which such 
entitlement is based; 
‘‘(B) in the case of an individual described 
in 
section 
3012(a)(1)(B) 
or 
section 
3012(a)(1)(C) of this title, for each month of 
continuous active duty served by such individual 
after June 30, 1985; 
‘‘(C) in the case of an individual described 
in section 3012(a)(1)(D) of this title, for each 
month of active duty served by such individual 
after September 11, 2001, as part of the aggre-
gate period of active duty on which such entitle-
ment is based; and 
‘‘(2) one month of educational assistance bene-
fits under this chapter for each four months served 
by such individual in the Selected Reserve after the 
applicable date specified in paragraph (1) (other 
than any month in which the individual served on 
active duty).’’.
(c) AMOUNT OF ASSISTANCE.—Section 3015 of such 
title is amended by adding at the end the following new 
subsection: 
‘‘(i) In the case of an individual entitled to an edu-
cational assistance allowance under section 3012(a)(1)(D) 
of this title, the amount of the basic educational assistance 
allowance payable under this chapter is the amount deter-
mined under subsection (b).’’. 
(d) CONTRIBUTION.—Paragraph (1) of section 
3012(c) of such title is amended by inserting ‘‘or sub-
section (a)(1)(D)’’ after ‘‘subsection (a)(1)(A)’’. 
(e) ELECTION TO OPT OUT.—Paragraph (1) of sec-
tion 3012(d) of such title is amended— 
(1) by inserting ‘‘(A)’’ after ‘‘(d)(1)’’; 
(2) by designating the last sentence as subpara-
graph (C); 
(3) in subparagraph (C), as so designated, by 
striking ‘‘such an election’’ and inserting ‘‘an elec-
tion under this paragraph’’; and 
(4) by inserting before subparagraph (C), as so 
designated, the following new subparagraph (B): 
‘‘(B) An individual described in subsection (a)(1)(D) 
may make an election not to receive educational assistance 
under this chapter. Any such election shall be made at
the time the individual completes the aggregate period of 
active duty service required under such subsection.’’. 
(f) OUTREACH.—(1) The Secretaries concerned shall 
take actions to inform members of the Selected Reserve 
who are or may become entitled to basic educational as-
sistance benefits under chapter 30 of title 38, United 
States Code, as a result of section 3012(a)(1)(D) of such 
title (as amended by subsection (a) of this section) of the 
minimum service requirements for entitlement to such 
benefits under that chapter and of the scope and nature 
of such benefits. 
(2) In this subsection: 
(A) The term ‘‘Secretary concerned’’ has the 
meaning given such term in section 101(25) of title 
38, United States Code. 
(B) The term ‘‘Selected Reserve’’ has the 
meaning given such term in section 3002(4) of title 
38, United States Code. 
SEC. 203. INCREASE IN RATES OF EDUCATIONAL ASSIST-
ANCE UNDER THE RESERVE MONTGOMERY 
GI BILL. 
(a) IN GENERAL.—Section 16131(b) of title 10, 
United States Code, is amended to read as follows: 
‘‘(b) Except as provided in subsections (d) through 
(f), each educational assistance program established under
subsection (a) shall provide for payment by the Secretary 
concerned, through the Secretary of Veterans Affairs, to 
each person entitled to educational assistance under this 
chapter who is pursuing a program of education of an edu-
cational assistance allowance at the following monthly 
rates: 
‘‘(1) For such a program of education pursued 
on a full-time basis, at the monthly rate equal to 40 
percent of the rate that applies for the month under 
section 3015(a)(1) of title 38. 
‘‘(2)(A) Subject to subparagraph (B), for such 
a program of education pursued on a less than a 
full-time basis, at an appropriately reduced rate, as 
determined under regulations which the Secretaries 
concerned shall prescribe. 
‘‘(B) No payment may be made to a person for 
less than half-time pursuit of such a program of 
education if tuition assistance is otherwise available 
to the person for such pursuit from the military de-
partment concerned.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply with respect to educational as-
sistance allowances under section 16131(b) of such title 
paid for months occuring or or after the date of the enact-
ment of this Act.
(c) CONFORMING INCREASE TO EDUCATIONAL AS-
SISTANCE RATES UNDER CHAPTER 1607.—Paragraph 
(4) of section 16162(c) of title 10, United States Code, 
is amended— 
(1) by striking ‘‘40 percent’’ in subparagraph 
(A) and inserting ‘‘50 percent’’; and 
(2) by striking ‘‘60 percent’’ in subparagraph 
(B) and inserting ‘‘65 percent’’. 
TITLE III—SURVIVORS’ AND DE-
PENDENTS’ EDUCATIONAL AS-
SISTANCE 
SEC. 301. APPLICATION OF ANNUAL ADJUSTMENT TO 
RATES OF EDUCATIONAL ASSISTANCE BASED 
ON AVERAGE COSTS OF HIGHER LEARNING. 
(a) IN GENERAL.—Subsection (a) of section 3564 of 
title 38, United States Code, is amended to read as fol-
lows: 
‘‘(a) With respect to any fiscal year, the Secretary 
shall provide for the same percentage increase in the rates 
payable under sections 3532, 3534(b), and 3542(a) of this 
title as the Secretary applies under subsection (h)(1) of 
section 3015 of this title to the rates applicable under sub-
sections (a)(1) and (b)(1) of such section.’’.
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to payments for months begin-
ning after September 30, 2006. 
Æ