1. (a) Eligibility. Veterans who are pursuing a rehabilitation program under chapter 31 on a three-quarter or full-time basis are eligible to receive a work-study allowance.

   (Authority: 38 U.S.C. 3104(a)(4), 3485)

2. (b) Selection criteria. Whenever feasible, VA will give priority to veterans with service-connected disabilities rated at 30 percent or more disabling in selection of recipients of this allowance. VA shall consider the following additional selection criteria:

   1. (1) Need of the veteran to augment the subsistence allowance or payment made by the Chapter 30 rate;
   2. (2) Motivation of the veteran; and

   3. (3) Compatibility of the work assignment with the veteran's physical condition.

      (Authority: 38 U.S.C. 3104(a)(4), 3108(f), 3485)

3. (c) Utilization. Veteran-student services may be utilized in connection with:

   1. (1) VA outreach service program as carried out under the supervision of a VA employee;
   2. (2) Preparation and processing of necessary VA papers and other documents at educational institutions, regional offices or other VA facilities;
   3. (3) Hospital and domiciliary care and medical treatment at VA facilities; and
   4. (4) Any other appropriate activity of VA.

4. (d) Rate of payment.

   1. (1) In return for the veterans' agreement to perform services for VA totaling 25 times the number of weeks contained in an enrollment period, VA will pay an allowance equal to the higher of:

      1. (i) The hourly minimum wage in effect under section 6(a) of the Fair Labor Standards Act of 1938 times the number of hours the veteran has agreed to work; or
      2. (ii) The hourly minimum wage under comparable law of the State in which the services are to be performed times the number of hours the veteran has agreed to work.

   2. (2) VA will pay proportionately less to a veteran who agrees to perform a lesser number of hours of services.

      (Authority: 38 U.S.C. 3104(a)(4), 3485)

5. (e) Payment in advance. VA will pay in advance an amount equal to 40 percent of the total amount payable under the contract (but not more than an amount equal to 50 times the applicable hourly minimum wage).

   (Authority: 38 U.S.C. 3104(a)(4), 3485)

6. (f) Veteran reduces rate of training. In the event the veteran reduces his or her training to less than three-quarter time before completing an agreement, the veteran, with the approval of the Director of the VA field station, or designee, may be permitted to complete the portions of an agreement in the same or immediately following term, quarter or semester in which the veteran ceases to be at least a three-quarter time student.

   (Authority: 38 U.S.C. 3104(a)(4), 3485)

7. (g) Veteran terminates training. If the veteran terminates all training before completing an agreement, VA:

   1. (1) Will permit him or her to complete the portion of the agreement represented by the sum of money VA has advanced to the veteran for which he or she has not performed any services; but
   2. (2) Will not permit him or her to complete that portion of an agreement for which no advance has been made.

8. (h) Indebtedness for unperformed service.

   1. (1) If the veteran has received an advance for hours of unperformed service that remain after application of paragraphs (f) and (g) of this section, that advance:
9. (i) Will be a debt due the United States; and
10. (ii) Will be subject to recovery in the same manner as any other debt due the United States;

11. (2) For each hour of unperformed service, the amount of indebtedness shall equal the hourly wage upon which the contract was made.

    1. (i) Survey. VA will conduct an annual survey of its regional offices to determine the number of veterans whose services can be utilized effectively.

       (Authority: 38 U.S.C. 3104(a)(4), 3485)

[49 FR 40814, Oct. 18, 1984; 50 FR 9622, Mar. 11, 1985; 54 FR 4284, Jan. 30, 1989, as amended at 56 FR 14648, Apr. 11, 1991; 57 FR 57108, Dec. 3, 1992; 62 FR 17709, Apr. 11, 1997]