Election of Education Benefits

DEPARTMENT OF DEFENSE

DEPARTMENT OF TRANSPORTATION

Coast Guard

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AH88

Election of Education Benefits

AGENCIES: Department of Defense, Department of Transportation (Coast

Guard), and Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Department of Veterans

Affairs (VA) educational assistance and educational benefits

regulations relating to certain elections between benefits. VA has

provided by regulation that after a veteran seeks to make an election

to have service in the Selected Reserve credited toward payment under

the Montgomery GI Bill--Selected Reserve (MGIB-SR) program or under the

Montgomery GI Bill--Active Duty (MGIB-AD) program, the election will

take effect when the individual has negotiated a check issued under the

program she or he has elected. In order to adapt the current rules to

the new system of electronic transfers, it is proposed to change these

election provisions to make the election effective either upon

negotiation of a check or electronic receipt of education benefits. VA

has provided by regulation that an election to receive benefits under

Survivors' and Dependents' Educational Assistance (DEA) for a program

of education rather than pension, compensation, or Dependency and

Indemnity Compensation (DIC) will take effect when the individual has

commenced a program of education and negotiated a check issued under

the program she or he has elected. In order to adapt the current rule

to the new system of electronic transfers and to ensure that decisions

are made with knowledge, it is proposed to change these election

provisions to require a written election to be submitted and to make

the election effective either upon negotiation of a check or electronic

receipt of education benefits. Nonsubstantive changes would also be

made for purposes of clarity and to reflect current statutory

codification and authority. The proposed requirements for individuals

to make elections before receiving certain benefit payments constitute

collections of information.

[[Page 62737]]

Accordingly, this document also requests comments under the Paperwork

Reduction Act on those proposed collections of information.

DATES: Comments must be received on or before January 26, 1998.

ADDRESSES: Mail or hand deliver written comments to: Director, Office

of Regulations Management (02D), Department of Veterans Affairs, 810

Vermont Ave., NW., Washington, DC 20420. Comments should indicate that

they are submitted in response to ``RIN 2900-AH88.'' All written

comments received will be available for public inspection in the Office

of Regulations Management, Room 1158, between the hours of 8:00 a.m.

and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director

for Policy and Program Administration, Education Service (225),

Veterans Benefits Administration, Department of Veterans Affairs, (202)

273-7187.

SUPPLEMENTARY INFORMATION: VA administers a number of benefit programs.

A veteran or other eligible person may be potentially eligible for

benefits under more than one of them. Often the law governing

eligibility requires that the individual elect the program under which

she or he is to receive benefits. This document proposes to amend the

VA educational assistance and educational benefits regulations relating

to certain elections between benefits.

VA is given broad statutory authority to prescribe the manner of

elections when a veteran must elect whether time served in the Selected

Reserve is to be applied toward establishing eligibility for the MGIB-

SR program or toward establishing entitlement to a greater monthly rate

of educational assistance under the MGIB-AD program. VA has provided by

regulation in 38 CFR 21.7042 and 21.7540 that after a veteran seeks to

make an election to have service in the Selected Reserve credited

toward payment under the MGIB-SR program or under the MGIB-AD program,

the election will take effect when the individual has negotiated a

check issued under the program she or he has elected. In order to adapt

the current rules to the new system of electronic transfers, it is

proposed to change these election provisions to make the election

effective either upon negotiation of a check or electronic receipt of

education benefits.

This document also proposes to amend Sec. 21.3023, which concerns

an election to receive DEA for a program of education rather than

pension, compensation, or DIC. That section currently provides that the

commencement of a program of education constitutes an election and,

with limited exceptions, that the election is final when the payee has

negotiated one check for the benefit. This section was issued pursuant

to 38 U.S.C. 3562, which provides that if a child of a veteran is

eligible for both DEA and DIC, commencement of a program of education

under DEA would bar the child from receiving pension, compensation, or

DIC in the future as a child. For the purposes of determining when

there is commencement of a program of education under DEA, it is

proposed that the ``commencement of a program'' will be deemed to have

occurred at the time of negotiation of the first DEA benefit payment

check or upon receipt of the first electronic transfer of a DEA benefit

payment. It also is proposed that such an election occur only after a

written election to receive DEA has been submitted to VA. These

proposed provisions are designed to ensure that elections are made with

knowledge and become effective at the time of commencement of a program

of education under DEA.

These changes are necessary because the Debt Collection Improvement

Act of 1996 (sec. 31001, Pub. L. 104-134) requires that the Federal

government make payments through electronic funds transfer. The

proposed provisions are intended to adapt the current rules to include

the new system of electronic transfer.

This document also proposes to make nonsubstantive amendments for

purposes of clarification and to reflect current statutory authority.

In addition, this document also seeks approval, as explained below, for

certain collections of information in Secs. 21.3023, 21.7042, and

21.7540.

The Department of Defense (DOD), the Department of Transportation

(Coast Guard), and VA are jointly issuing this proposal insofar as it

relates to the MGIB-SR program. This program is funded by DOD and the

Coast Guard, and is administered by VA. The remainder of this proposal

is issued solely by VA.

Paperwork Reduction Act of 1995

Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520),

the provisions of the proposed Secs. 21.3023, 21.7042, and 21.7540

include collections of information. Accordingly, as required by the Act

at Sec. 3507(d), VA has submitted a copy of this rulemaking action to

the Office of Management and Budget (OMB) for its review of the

proposed collections of information.

OMB assigns a control number for each collection of information it

approves. VA may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless it displays a

currently valid OMB control number.

Comments on the proposed collections of information should be

submitted to the Office of Management and Budget, Attention: Desk

Officer for the Department of Veterans Affairs, Office of Information

and Regulatory Affairs, Washington, DC 20503, with copies to the

Director, Office of Regulations Management (02D), Department of

Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420. Comments

should indicate that they are submitted in response to ``RIN 2900-

AH88.''

Title: Election to Receive Dependents' Educational Assistance

Instead of Dependency and Indemnity Compensation.

Summary of collection of information: The collection of information

in the proposed amendment to Sec. 21.3023 in this rulemaking proceeding

would implement a statutory provision that prevents an individual with

potential eligibility for DEA and compensation, pension, or DIC from

receiving more than one benefit for pursuing a program of education.

The proposed rule would require such an individual to make an election

if she or he wished to receive DEA.

Description of need for information and proposed use of

information: An eligible child may not receive educational assistance

under DEA and payments under DIC for the same school attendance. In

order for VA to know when the child wishes to receive DEA, it is

necessary for the child to state his or her desire for educational

assistance under DEA.

Description of likely respondents: Individuals with potential

eligibility for DEA.

Estimated number of respondents: 2,900 annually.

Estimated frequency of responses: Once per eligible claimant.

Estimated total annual reporting and recordkeeping burden: 580

hours of reporting burden. VA does not believe that there would be an

additional recordkeeping burden.

Estimated average burden per collection: .2 hour.

Title: Election to Apply Selected Reserve Service to Either the

Montgomery GI Bill--Active Duty or to the Montgomery GI Bill--Selected

Reserve.

Summary of collection of information: The collection of information

in the

[[Page 62738]]

proposed amendments to Secs. 21.7042 and 21.7540 in this rulemaking

proceeding would implement a statutory provision that prevents an

individual with potential eligibility for educational assistance under

both the Montgomery GI Bill--Active Duty or the Montgomery Bill--

Selected Reserve from using the same Selected Reserve service to

establish eligibility for assistance under the Montgomery GI Bill--

Selected Reserve, and to establish entitlement to educational

assistance at an increased monthly rate under the Montgomery GI Bill--

Active Duty.

Description of need for information and proposed use of

information: An individual who participates in the Montgomery GI Bill--

Active Duty and who serves on active duty for two years followed by six

years in the Selected Reserve must choose whether to apply the Selected

Reserve service toward the Montgomery GI Bill--Active Duty or to the

Montgomery GI Bill--Selected Reserve. If she or he decides to apply it

towards the Montgomery GI Bill--Selected Reserve, she or he would be

eligible for 36 months of educational assistance under the Montgomery

GI Bill--Active Duty at the rate of $347.65 per month for full-time

training and 12 months of educational assistance under the Montgomery

GI Bill--Selected Reserve. If she or he chooses to apply that service

towards the Montgomery GI Bill--Active Duty, she or he would be

eligible for 36 months of educational assistance under the Montgomery

GI Bill--Active Duty at the rate of $427.87 per month for full-time

training while remaining ineligible for educational assistance under

the Montgomery GI Bill--Selected Reserve. VA must know which benefit

the individual wants the Selected Reserve service credited to in order

to determine the proper payments to the individual.

Description of likely respondents: Members of the Selected Reserve.

Estimated number of respondents: 35 annually.

Estimated frequency of responses: Once per eligible claimant.

Estimated total annual reporting and recordkeeping burden: 11.67

hours of reporting burden. VA does not believe that there would be an

additional recordkeeping burden.

Estimated average burden per collection: .33 hour.

The Department considers comments by the public on proposed

collections of information in--

Evaluating whether the proposed collections of information

are necessary for the proper performance of the functions of the

Department, including whether the information will have practical

utility;

Evaluating the accuracy of the Department's estimate of

the burden of the proposed collections of information, including the

validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of the collections of information on

those who are to respond, including through the use of appropriate

automated, electronic, mechanical, or other technological collection

techniques or other forms of information technology, e.g., permitting

electronic submission of responses.

OMB is required to make a decision concerning the proposed

collections of information contained in this proposed rule between 30

and 60 days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication. This does not affect

the deadline for the public to comment on the proposed regulations.

Regulatory Flexibility Act

The signers of this document hereby certify that this proposed

rule, if promulgated, would not have 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 proposed rule would

directly affect only individuals and would not directly affect small

entities. Pursuant to 5 U.S.C. 605(b), the proposed 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 programs

affected by the proposed rule are 64.117 and 64.124. The proposed rule

also affects the Montgomery GI Bill--Selected Reserve for which there

is no Catalog of Federal Domestic Assistance number.

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,

Veterans, Vocational education, Vocational rehabilitation.

Approved: September 5, 1997.

Hershel W. Gober,

Acting Secretary of Veterans Affairs.

Approved: August 6, 1997.

G.R. Woolever,

Rear Admiral, U.S. Coast Guard, Assistant Commandant for Human

Resources.

Approved: August 5, 1997.

Normand G. Lezy,

Lieutenant General, USAF, Deputy Assistant Secretary (Military

Personnel Policy).

For the reasons set out in the preamble, 38 CFR part 21, subparts

C, K, and L are proposed to be amended as follows.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart C--Survivors' and Dependents' Educational Assistance Under

38 U.S.C. Chapter 35

1. The authority citation for part 21, subpart C, is revised to

read as follows:

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

noted.

2. In Sec. 21.3023, paragraph (c)(3) is amended by removing

``educational assistance'' and adding, in its place, ``education under

DEA''; the section heading, paragraph (c) introductory text, and

paragraph (c)(1) are revised, and an authority citation for the section

is added, to read as follows:

Sec. 21.3023 Nonduplication; pension, compensation, and dependency and

indemnity compensation.

* * * * *

(c) Child; election. An election by a child under this section must

be submitted to VA in writing.

(1) Except as provided in paragraph (c)(2) of this section, an

election to receive Survivors' and Dependents' Educational Assistance

(DEA) is final when the eligible child commences a program of education

under DEA (38 U.S.C. chapter 35). Commencement of a program of

education under DEA will be deemed to have occurred for VA purposes on

the date the first payment of DEA educational assistance is made, as

evidenced by negotiation of the first check or receipt of the first

payment by electronic funds transfer.

* * * * *

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

Subpart K--All Volunteer Force Educational Assistance Program

(Montgomery GI Bill--Active Duty)

3. 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.

[[Page 62739]]

4. In Sec. 21.7042, the section heading and paragraphs (d)(2), and

(d)(3) are revised, and paragraph (d)(4) is added, to read as follows:

Sec. 21.7042 Eligibility for basic educational assistance.

* * * * *

(d) * * *

(2) An individual must elect, in writing, whether he or she wishes

service in the Selected Reserve to be credited towards establishing

eligibility under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606

when:

(i) The individual:

(A) Is a veteran who has established eligibility for basic

educational assistance through meeting the provisions of paragraph (b)

of this section; and

(B) Also is a reservist who has established eligibility for

benefits under 10 U.S.C. chapter 1606 through meeting the requirements

of Sec. 21.7540; or

(ii) The individual is a member of the National Guard or Air

National Guard who has established eligibility for basic educational

assistance under 38 U.S.C. chapter 30 through activation under a

provision of law other than 32 U.S.C. 316, 502, 503, 504, or 505.

(3) An election under this paragraph (d) to have Selected Reserve

service credited towards eligibility for payment of educational

assistance under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606

is irrevocable when the veteran either negotiates the first check or

receives the first payment by electronic funds transfer of the

educational assistance elected.

(4) If a veteran is eligible to receive educational assistance

under both 38 U.S.C. chapter 30 and 10 U.S.C. chapter 1606, he or she

may receive educational assistance alternately or consecutively under

each of these chapters to the extent that the educational assistance is

based on service not irrevocably credited to one or the other chapter

as provided in paragraphs (d)(1) through (d)(3) of this section.

(Authority: 10 U.S.C. 16132; 38 U.S.C. 3033(c))

* * * * *

Subpart L--Educational Assistance for Members of the Selected

Reserve

5. The authority citation for part 21, subpart L, is revised to

read as follows:

Authority: 10 U.S.C. 1606; 38 U.S.C. 501, unless otherwise

noted.

6. In Sec. 21.7540, paragraph (c) and the authority citation for

paragraph (d) are revised, to read as follows:

Sec. 21.7540 Eligibility for educational assistance.

* * * * *

(c) Limitations on establishing eligibility. (1) An individual must

elect in writing whether he or she wishes service in the Selected

Reserve to be credited towards establishing eligibility under 38 U.S.C.

chapter 30 or under 10 U.S.C. chapter 1606 when:

(i) The individual is a reservist who is eligible for basic

educational assistance provided under 38 U.S.C. 3012 and has

established eligibility to that assistance partially through service in

the Selected Reserve; or

(ii) The individual is a member of the National Guard or Air

National Guard who has established eligibility for basic educational

assistance provided under 38 U.S.C. 3012 through activation under a

provision of law other than 32 U.S.C. 316, 502, 503, 504, or 505

followed by service in the Selected Reserve.

(2) An election under this paragraph (c) to have Selected Reserve

service credited towards eligibility for payment of educational

assistance under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606

is irrevocable when the reservist either negotiates the first check or

receives the first payment by electronic funds transfer of the

educational assistance elected.

(3) If a reservist is eligible to receive educational assistance

under both 38 U.S.C. chapter 30 and 10 U.S.C. chapter 1606, he or she

may receive educational assistance alternately or consecutively under

each of these chapters to the extent that the educational assistance is

based on service not irrevocably credited to one or the other chapter

as provided in paragraphs (c)(1) and (c)(2) of this section.

(Authority: 10 U.S.C. 16132; 38 U.S.C. 3033(c))

* * * * *

(d) * * *

(Authority: 10 U.S.C. 16132(d), 16134)

[FR Doc. 97-30872 Filed 11-24-97; 8:45 am]

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