Increase in Rates Payable Under the Montgomery GI Bill-Active Duty

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

By statute, the monthly rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty program must be adjusted each fiscal year. In accordance with the statutory formula, the regulations governing rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty program for Fiscal Year 2005 (October 1, 2004, through September 30, 2005) are changed to show a 2% increase in these rates.

DATES:

Effective Date: This final rule is effective December 15, 2004.

Applicability Date: The changes in rates are applied retroactively to October 1, 2004 to conform to statutory requirements.

FOR FURTHER INFORMATION CONTACT:

Lynn M. Nelson, Education Adviser, Education Service (225C), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, telephone (202) 273-7294.

SUPPLEMENTARY INFORMATION:

Under the formula mandated by 38 U.S.C. 3015(h), the Secretary must increase the full-time rates of basic educational assistance payable under the Montgomery GI Bill—Active Duty (MGIB) program each fiscal year. For Fiscal Year (FY) 2005 the increase is 2%, which is the percentage by which the total of the monthly Consumer Price Index-W for July 1, 2003, through June 30, 2004, exceeds the total of the monthly Consumer Price Index-W for July 1, 2002, through June 30, 2003. The Veterans Benefits Act of 2003 amended 38 U.S.C. 3015(h) to provide that during FY 2005 through FY 2013, the Secretary must round down the increased rate to the next lower whole dollar. The full-time basic educational assistance rates in this document at 38 CFR 21.7136(b)(1), (c)(1), and 38 CFR 21.7137(a)(1) are rounded down to the nearest dollar.

It should be noted that 2% increase does not affect all educational assistance payable under the MGIB. The 2% increase applies only to the basic educational assistance rate. The increase does not apply to additional amounts payable by the Secretary of Defense to individuals with skills or a specialty in which there is a critical shortage of personnel (so-called “kickers”). Veterans who previously had eligibility under the Veterans’ Educational Assistance program (Vietnam Era GI Bill) receive monthly payments that are in part based upon basic educational assistance and in part based upon the rates payable under the Vietnam Era GI Bill. Only that portion attributable to basic educational assistance is increased. In addition, the increase does not apply to additional amounts payable for dependents.

38 U.S.C. 3015(a) and (b) require that the Department of Veterans Affairs (VA) pay part-time students at appropriately reduced rates. Since the first student became eligible for assistance under the MGIB in 1985, VA has paid three-quarter-time students and one-half-time students at 75% and 50% of the full-time institutional rate, respectively. Students pursuing a program of education at less than one-half but more than one-quarter time have had their payments limited to 50% or less of the full-time institutional rate. Similarly, students pursuing a program of education at one-quarter time or less have had their payments limited to 25% or less of the full-time institutional rate. Changes are made consistent with the authority and formula described in this paragraph.

In addition, since 38 U.S.C. 3032(c) requires that monthly rates payable to veterans in apprenticeship or other on-the-job training must be set at a given percentage of the full-time rate, the apprenticeship or on-the-job training rates have been accordingly increased effective October 1, 2004.

The changes set forth in this final rule are effective from the date of publication, but the changes in the rates are applied in accordance with the applicable statutory provisions discussed above. Thus, the Department of Veterans Affairs began paying the increased rates for training pursued after September 30, 2004.

Administrative Procedure Act

Changes made by this final rule merely reflect statutory requirements and adjustments made based on previously established formulas. 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.

Paperwork Reduction Act

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

The initial and final regulatory flexibility analyses requirements of sections 603 and 604 of the Regulatory Flexibility Act, 5 U.S.C. 601-612, are not applicable to this rule, because a notice of proposed rulemaking is not required for this rule. Even so 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. This final rule directly affects only individuals and does not directly affect small entities. Therefore, this final rule is also exempt pursuant to 5 U.S.C. 605(b) from the initial and final regulatory flexibility analyses requirements of sections 603 and 604.

Unfunded Mandates

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before developing any rule that may result in expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more (adjusted annually for inflation) in any given year. This rule would have no such effect on State, local, or tribal governments, or the private sector.

Catalog of Federal Domestic Assistance Program Numbers

The Catalog of Federal Domestic Assistance numbers for the program affected by this final rule is 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 programs
• Loan programs-education
• Loan programs-veterans
• Manpower training programs
• Reporting and recordkeeping requirements
• Schools
• Travel and transportation expenses
• Veterans
• Vocational education
• Vocational Rehabilitation

For the reasons set out above, 38 CFR part 21 (subpart K) is amended as follows:

PART 21—VOCATIONAL REHABILITATION AND EDUCATION

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

1. The authority citation for part 21, subpart K, continues to read as follows:

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

2. Section 21.7136 is amended by:

a. Removing paragraphs (b)(4) through (b)(9), and (c)(4) through (c)(9).

b. Revising paragraphs (b)(1), (b)(2), (b)(3), (c)(1), (c)(2), and (c)(3).

The revisions read as follows:

3. Section 21.7137 is amended by:

a. Removing paragraphs (a)(4) through (a)(9).

b. Revising paragraphs (a)(1), (a)(2), (a)(3), and (c).

The revisions read as follows: