After July 31, 2011, the payment rates as established in §§ 21.9641 and 21.9655 will be reduced in accordance with this section whenever the circumstances described in this section arise.

(a) Withdrawals and nonpunitive grades. Except as provided in this paragraph (a), VA will not pay educational assistance for an eligible individual's pursuit of a course from which the eligible individual withdraws or receives a nonpunitive grade that is not used in computing the requirements for graduation. VA may pay educational assistance for a course from which the eligible individual withdraws or receives a nonpunitive grade if—

(1) The individual withdraws because he or she is ordered to active-duty service or, in the case of an individual serving on active duty, he or she is ordered to a new duty location or assignment, or ordered to perform an increased amount of work; or

(2) There are mitigating circumstances; and

(i) The eligible individual submits a description of the mitigating circumstances in writing to VA within one year from the date VA notifies the eligible individual that a description is needed, or at a later date if the eligible individual is able to show good cause why the one-year time limit should be extended to the date on which he or she submitted the description of the mitigating circumstances; and

(ii) The eligible individual submits evidence supporting the existence of mitigating circumstances within one year of the date VA requested the evidence, or at a later date if the eligible individual is able to show good cause why the one-year time limit should be extended to the date on which he or she submitted the evidence supporting the existence of mitigating circumstances.

(b) No monthly housing allowance for some incarcerated individuals. An individual who is incarcerated in a Federal, State, local, or other penal institution or correctional facility due to a felony conviction will not receive a monthly housing allowance.

(c) Reduced educational assistance for some incarcerated individuals. (1) An individual who is incarcerated in a Federal, State, local, or other penal institution or correctional facility due to a felony conviction will receive—

(i) The net costs for tuition and fees not paid by any other form of financial assistance, not to exceed the amounts specified in § 21.9641(b); and

(ii) The amount of necessary books, supplies, and equipment not paid by any other form of financial assistance, not to exceed $1,000 each academic year.

(2) The amounts payable under paragraph (c)(1) of this section will be prorated based on the individual's eligibility percentage as determined in § 21.9641(a).

(d) No educational assistance for certain enrollments. VA will not pay educational assistance for—

(1) An enrollment in an audited course (see § 21.4252(i));

(2) A new enrollment in a course during a period when the approval has been suspended by a State approving agency or VA;

(3) An enrollment in a course by a nonmatriculated student except as provided in § 21.4252(l);

(4) An enrollment in a course certified to VA by the individual taking the course;

(5) A new enrollment in a course which does not meet the supported students versus nonsupported students ratio requirement as computed under § 21.4201; and

(6) An enrollment in a course offered under contract for which VA approval is prohibited by § 21.4252(m).

(e) Authority. (1) Paragraph (a) of this section issued under the authority of 38 U.S.C. 3034(a), 3323(a), 3680(a);

(2) Paragraph (c) of this section issued under the authority of 38 U.S.C. 3034(a), 3323(a), 3482(g); and

(3) Paragraph (d) of this section issued under the authority of 38 U.S.C. 501(a), 3034(a), 3323(a).

[90 FR 5353, Jan. 16, 2025]