03-14860. Accelerated Payments Under the Montgomery GI Bill-Active Duty Program

AGENCY:

Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document adopts as a final rule, with a minor non-substantive change, a proposed rule amending the regulations governing various aspects of the educational assistance programs the Department of Veterans Affairs (VA) administers. The final rule implements some of the provisions of the Veterans Education and Benefits Expansion Act of 2001. These provisions include accelerated payments to individuals under the Montgomery GI Bill—Active Duty program who are enrolled in approved training programs that lead to employment in high tech industries and whose charged tuition and fees exceed an amount equal to 200 percent of the monthly rate of basic educational assistance allowance otherwise payable. This rule also amends the regulation defining educational institution to include certain private technology entities.

DATES:

This final rule is effective June 12, 2003.

Applicability Dates: The revisions to the various sections of the Code of Federal Regulations amended in this final rule are applied retroactively to October 1, 2002, to conform to statutory requirements.

FOR FURTHER INFORMATION CONTACT:

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

SUPPLEMENTARY INFORMATION:

In a document published in the Federal Register on September 11, 2002 (67 FR 57543), VA published a proposed rule amending subparts D and K of 38 CFR part 21, regarding criteria for accelerated payment of Montgomery GI Bill benefits as stated in the SUMMARY portion of this document.

Interested persons were given 60 days to submit comments on the proposed rule and the proposed information collections. VA received one comment concerning the proposed rule. The comment came from a director of a company that has a financial interest in a construction trade school. He requested that VA include “Construction Trades” or “Construction Crafts” in the list of industries an individual must intend to seek employment in to qualify for the accelerated payment provisions. The Veterans Education and Benefits Expansion Act of 2001 (Public Law 107-103) allows an accelerated payment only for courses leading to employment in a “high technology” industry. Although the construction trade does offer jobs in technical fields, the construction trade industry did not appear as a “high technology” industry in the data we reviewed. The SUPPLEMENTARY INFORMATION section of the proposed rule shows the data we used in arriving at the list of “high technology” industries. Because the law specifically states the training must lead to employment in a “high technology” industry, VA cannot offer accelerated payment for courses leading to employment in other industries. Thus, we did not amend the proposed rule based on the comment received.

Based on the rationale set forth in the proposed rule and in this document, we are adopting the provisions of the proposed rule as a final rule, except as stated below.

We amended proposed § 21.7151(c) to include information inadvertently omitted. The amendment, located at § 21.7151(c)(1)(vi), applies when an individual who received an accelerated payment applies for a subsequent accelerated payment. This amendment states that an individual must make all certifications required in § 21.7154(d) for any previous accelerated payment before we make a subsequent accelerated payment. The purpose of this amendment is to ensure proper payment of benefits by avoiding overpayments. Generally, Montgomery GI Bill payments are paid at the end of each month after students certify their attendance for that month. However, under the accelerated payment provisions individuals can receive the payment at the start of a course but their certification is not required until the end of the course. An individual could receive a payment of $6,000 at the start of the course. After receiving payment he or she might drop out of the course and therefore may not be entitled to the full $6,000 payment. The certification shows whether the individual completed the course or not. If he or she dropped the course, the certification will show the date last attended. VA uses the certification information to recalculate the payment and determine if an overpayment of benefits occurred. Before we release another accelerated payment, we must be certain that an overpayment has not occurred. If an overpayment has occurred, we would notify the individual of the amount owed VA and, if necessary reduce the subsequent accelerated payment by that amount.

Additionally, paragraph (b) of § 21.7140 has been changed to correct typographical errors that were published in the proposed rule on September 11, 2002, at 67 FR 57543. The first error was an incorrect cite to § 21.7151(d), which does not exist. The second error was an incorrect cite to § 21.7154(c), which should have read § 21.7154(d). This document corrects those errors.

Paperwork Reduction Act

The final rule contains new reporting requirements. We described the new reporting requirements in the preamble of the proposed rule and provided a comment period. We did not receive any comments concerning the new reporting requirements. The Office of Management and Budget assigned control number 2900-0636 to the new reporting requirements.

Unfunded Mandates

The Unfunded Mandates Reform Act 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 an expenditure by State, local, or tribal governments, in the aggregate, or by the private section, of $100 million or more in any given year. This final rule has no consequential effect on State, local, or tribal governments.

Executive Order 12866

This document has been reviewed by the Office of Management and Budget under Executive Order 12866.

Regulatory Flexibility Act

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, 5 U.S.C. 601-612. This final rule affects only individuals and will not directly affect small entities. Pursuant to 5 U.S.C. 605(b), this rule, therefore, is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Program Numbers

The Catalog of Federal Domestic Assistance numbers for the programs affected by this proposed rule are 64.117, 64.120, and 64.124.

List of Subjects in 38 CFR Part 21

• Administrative practice and procedure
• Armed forces
• Civil rights
• Claims
• Colleges and universities
• Conflicts 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 expenses
• Veterans
• Vocational education
• Vocational rehabilitation

Approved: March 12, 2003.

Anthony J. Principi,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 21 (subparts D and K) is amended to read as follows:

PART 21—VOCATIONAL REHABILITATION AND EDUCATION

Subpart D—Administration of Educational Assistance Programs

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

Authority: 10 U.S.C. 2141 note, ch.1606; 38 U.S.C. 501(a), chs. 30, 32, 34, 35, 36, unless otherwise noted.

2. Section 21.4138 is amended by:

a. In paragraph (f)(1)(v), removing “basis; or” and adding, in its place, “basis;”.

b. In paragraph (f)(1)(vi), removing “basis.” and adding, in its place, “basis; or”.

c. Adding paragraph (f)(1)(vii).

The addition reads as follows:

§ 21.4138

Certifications and release of payments.

* * * * *

(f) * * *

(1) * * *

(vii) The veteran receives an accelerated payment for the term, quarter, semester, or summer session preceding the interval.

* * * * *

3. Section 21.4200 is amended by:

a. In paragraph (a)(4), removing “section; or”, and adding, in its place, “section;”;

b. In paragraph (a)(5), removing “program.”, and adding, in its place, “program; or”; and

c. Adding paragraph (a)(6); and paragraphs (aa) through (dd) immediately after the authority citation at the end of paragraph (z).

d. Revising the authority citation at the end of paragraph (a).

The revisions and additions read as follows:

§ 21.4200

Definitions.

(a) * * *

(6) Any private entity that offers, either directly or indirectly under an agreement with another entity, a course or courses to fulfill requirements for the attainment of a license or certificate generally recognized as necessary to obtain, maintain, or advance in employment in a profession or vocation in a high technology occupation.

(Authority: 38 U.S.C. 3452, 3501(a)(6), 3689(d))

* * * * *

(aa) High technology industry: The term high technology industry includes the following industries:

(1) Biotechnology;

(2) Life science technologies;

(3) Opto-electronics;

(4) Computers and telecommunications;

(5) Electronics;

(6) Computer-integrated manufacturing;

(7) Material design;

(8) Aerospace;

(9) Weapons;

(10) Nuclear technology; and

(11) Any other identified advanced technologies in the biennial Science and Engineering Indicators report published by the National Science Foundation.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

(bb) Employment in a high technology industry. Employment in a high technology industry means employment in a high technology occupation specific to a high technology industry.

(Authority: 38 U.S.C. 3014A)

(cc) High technology occupation. The term high technology occupation means an occupation that leads to employment in a high technology industry. These occupations consist of:

(1) Life and physical scientists;

(2) Engineers;

(3) Mathematical specialists;

(4) Engineering and science technicians;

(5) Computer specialists; and

(6) Engineering, scientific, and computer managers.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

(dd) Computer specialists. The term computer specialists includes the following occupations:

(1) Database, system, and network administrators;

(2) Database, system, and network developers;

(3) Computer and network engineers;

(4) Systems analysts;

(5) Programmers;

(6) Computer, database, and network support specialists;

(7) All computer scientists;

(8) Web site designers;

(9) Computer and network service technicians;

(10) Computer and network electronics specialists; and

(11) All certified professionals, certified associates and certified technicians in the information technology field.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

* * * * *

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

4. 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.

5. Section 21.7020 is amended by adding paragraphs (b)(47) through (b)(51) immediately following the authority citation at the end of the section.

The additions read as follows:

§ 21.7020

Definitions.

* * * * *

(b) * * *

(47) High technology industry. The term high technology industry has the same meaning as provided in § 21.4200(aa).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

(48) Employment in a high technology industry. Employment in a high technology industry has the same meaning as provided in § 21.4200(bb).

(Authority: 38 U.S.C. 3014A)

(49) High technology occupation. The term high technology occupation has the same meaning as provided in § 21.4200(cc).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

(50) Computer specialist. The term computer specialist has the same meaning as provided in § 21.4200(dd).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))

(51) Accelerated payment. An accelerated payment is a lump sum payment of a maximum of 60 percent of the charged tuition and fees for an individual's enrollment for a term, quarter, or semester in an approved program of education leading to employment in a high technology industry. In the case of a program of education not offered on a term, quarter, or semester basis, the accelerated payment is a lump sum payment of a maximum of 60 percent of the charged tuition and fees for the entire such program.

(Authority: 38 U.S.C. 3014A)

6. Section 21.7076 is amended by revising paragraphs (a), (b)(1) introductory text, and (b)(7) to read as follows:

§ 21.7076

Entitlement charges.

(a) Overview. VA will make charges against entitlement as stated in this section.

(1) Charges will be made against the entitlement the veteran or servicemember has to educational assistance under 38 U.S.C. chapter 30 as the assistance is paid.

(2) There will be a charge (for record purposes only) against the remaining entitlement, under 38 U.S.C. chapter 34, of an individual who is receiving the educational assistance under § 21.7137 of this part. The record-purpose charges against entitlement under 38 U.S.C. chapter 34 will not count against the 48 months of total entitlement under both 38 U.S.C. chapters 30 and 34 to which the veteran or service member may be entitled. (See § 21.4020(a) of this part).

(3) Generally, VA will base those entitlement charges on the principle that a veteran or service member who trains full time for one day should be charged one day of entitlement. However, this general principle does not apply to a veteran or servicemember who:

(i) Is pursuing correspondence training;

(ii) Is pursuing flight training;

(iii) Is pursuing an apprenticeship or other on-job training; or

(iv) Is paid an accelerated payment.

(4) The provisions of this section apply to:

(i) Veterans and service members training under 38 U.S.C. chapter 30; and

(ii) Veterans training under 38 U.S.C. chapter 31 who make a valid election under § 21.21 of this part to receive educational assistance equivalent to that paid to veterans under 38 U.S.C. chapter 30.

(Authority: 38 U.S.C. 3013, 3014(A), 3014(b))

(b) * * *

(1) Except for those pursuing correspondence training, flight training, apprenticeship or other on-the-job training, those who are receiving tutorial assistance, and those who receive an accelerated payment, VA will make a charge against entitlement:

* * * * *

(7) When a veteran or servicemember is paid an accelerated payment, VA will make a charge against entitlement for each accelerated payment made to him or her. The charge—

(i) Will be made in months and decimal fractions of a month; and

(ii) Will be determined by dividing the amount of the accelerated payment by an amount equal to the rate of basic educational assistance otherwise applicable to him or her for full-time institutional training. If the rate of basic educational assistance increases during the enrollment period, VA will charge entitlement for the periods covered by the initial rate and the increased rate, respectively.

(Authority: 38 U.S.C. 3014A)

* * * * *

7. Section 21.7140 is amended by:

a. Redesignating paragraphs (b) through (f) as paragraphs (c) through (g), respectively.

b. Adding a new paragraph (b).

c. Revising newly redesignated paragraph (c)(1) introductory text.

The addition and revision read as follows:

§ 21.7140

Certifications and release of payments.

* * * * *

(b) Accelerated payments. VA will apply the provisions of §§ 21.7151(a), (c), and 21.7154(d) in making accelerated payments.

(c) * * *

(1) VA will pay educational assistance to a veteran or servicemember (other than one pursuing a program of apprenticeship or other on-job training, a correspondence course, one who qualifies for advance payment, one who qualifies for an accelerated payment, or one who qualifies for a lump sum payment) only after—

* * * * *

§ 21.7142

[Redesignated as § 21.7143]

8. Section 21.7142 is redesignated as § 21.7143.

9. A new § 21.7142 is added to read as follows:

§ 21.7142

Accelerated payments.

The accelerated payment will be the lesser of—

(a) The amount equal to 60 percent of the charged tuition and fees for the term, quarter or semester (or the entire program of education for those programs not offered on a term, quarter, or semester basis), or

(b) The aggregate amount of basic education assistance to which the individual remains entitled under this chapter at the time of the payment.

(Authority: 38 U.S.C. 3014A)

10. Section 21.7151 is amended by:

a. Revising the section heading.

b. Adding paragraph (c) and the information parenthetical immediately following the authority citation at the end of the section.

The revision and additions read as follows:

§ 21.7151

Advance payment and accelerated payment certifications.

* * * * *

(c) Accelerated payments. (1) A veteran or servicemember is eligible for an accelerated payment only if—

(i) The veteran or servicemember submits a signed statement to the school or to VA that states “I request accelerated payment”;

(ii) The veteran or servicemember is enrolled in a course or program of education or training beginning on or after October 1, 2002;

(iii) The veteran is enrolled in an approved program as defined in § 21.4200 (aa);

(iv) The charged tuition and fees for the term, quarter, or semester (or entire program for those programs not offered on a term, quarter or semester basis) divided by the number of months (and fractions thereof) in the enrollment period, exceeds the amount equal to 200 percent of the monthly rate of basic educational assistance allowance otherwise payable under §§ 21.7136 or 21.7137, as applicable;

(v) The veteran or servicemember requesting the accelerated payment has not received an advance payment under § 21.7140(a) for the same enrollment period; and

(vi) The veteran or servicemember has submitted all certifications required under § 21.7154(d) for any previous accelerated payment he or she received.

(2) Except as provided in paragraph (c)(5) of this section, VA will make the accelerated payment directly to the educational institution, in the veteran's or servicemember's name, for delivery to the veteran or servicemember if:

(i) The educational institution submits the enrollment certification required under § 21.7152 before the actual start of the term, quarter or semester (or the start of the program for a program not offered on a term, quarter or semester basis); and

(ii) The educational institution at which the veteran or servicemember is accepted or enrolled agrees to—

(A) Provide for the safekeeping of the accelerated payment check before delivery to the veteran or servicemember;

(B) Deliver the payment to the veteran or servicemember no earlier than the start of the term, quarter or semester (or the start of the program if the program is not offered on a term, quarter or semester basis);

(C) Certify the enrollment of the veteran or servicemember and the amount of tuition and fees therefor; and

(D) Certify the delivery of the accelerated payment to the veteran or servicemember.

(3) VA will make accelerated payments directly to the veteran or servicemember if the enrollment certification required under § 21.7152 is submitted on or after the first day of the enrollment period. VA will electronically deposit the accelerated payment in the veteran's or servicemember's bank account unless—

(i) The veteran or servicemember does not have a bank account; or

(ii) The veteran or servicemember objects to payment by electronic funds transfer.

(4) VA must make the accelerated payment no later than the last day of the month immediately following the month in which VA receives a certification from the educational institution regarding—

(i) The veteran's or servicemember's enrollment in the program of education; and

(ii) The amount of the charged tuition and fees for the term, quarter or semester (or for a program that is not offered on a term, quarter, or semester basis, the entire program).

(5) The Director of the VA field station of jurisdiction may direct that accelerated payments not be made in advance of the first day of the enrollment period in the case of veterans or servicemembers attending an educational institution that demonstrates its inability to discharge its responsibilities for accelerated payments. In such a case, the accelerated payment will be made directly to the veteran or servicemember as provided in paragraph (a)(3).

(Authority: 38 U.S.C. 3014A)

(The Office of Management and Budget has approved the information collection requirements in this section under control number 2900-0636.)

11. Section 21.7154 is amended by:

a. Revising the authority citation at the end of paragraph (a) and the information parenthetical at the end of the section.

b. Adding paragraph (a)(4) immediately following the authority citation at the end of paragraph (a)(3); and by adding paragraph (d) immediately following the authority citation at the end of the section.

The revision and additions read as follows:

§ 21.7154

Pursuit and absences.

* * * * *

(a) * * *

(4) Has received an accelerated payment for the enrollment period.

(Authority: 38 U.S.C. 3014A, 3034, 3684)

* * * * *

(d) Additional requirements for individuals receiving an accelerated payment.

(1) When an individual receives an accelerated payment as provided in § 21.7151(c) and (d), he or she must certify the following information within 60 days of the end of the term, quarter or semester (or entire program when the program is not offered on a term, quarter, or semester basis) for which the accelerated payment was made:

(i) The course or program was successfully completed, or if the course was not completed—

(A) The date the veteran or servicemember last attended; and

(B) An explanation why the course was not completed;

(ii) If the veteran or servicemember increased or decreased his or her training time—

(A) The date the veteran or servicemember increased or decreased training time; and

(B) The number of credit/clock hours pursued before and after each such change in training time; and

(iii) The accelerated payment was received and used.

(2) VA will establish an overpayment equal to the amount of the accelerated payment if the required certifications in paragraph (c)(1) of this section are not timely received.

(3) VA will determine the amount of the overpayment of benefits for courses not completed in the following manner—

(i) For a veteran or servicemember who does not complete the full course, courses, or program for which the accelerated payment was made, and who does not substantiate mitigating circumstances for not completing, VA will establish an overpayment equal to the amount of the accelerated payment.

(ii) For a veteran or servicemember who does not complete the full course, courses, or program for which the accelerated payment was made, but who substantiates mitigating circumstances for not completing, VA will prorate the amount of the accelerated payment to which he or she is entitled based on the number of days from the beginning date of the enrollment period through the date of last attendance. VA will determine the prorated amount by dividing the accelerated payment amount by the number of days in the enrollment period, and multiplying the result by the number of days from the beginning date of the enrollment period through the date of last attendance. The result of this calculation will equal the amount the individual is due. The difference between the accelerated payment and the amount the individual is due will be established as an overpayment.

(Authority: 38 U.S.C. 3014A(g))

* * * * *

(The Office of Management and Budget has approved the information collection requirements in this section under control numbers 2900-0465 and 2900-0636.)