38 CFR § 21.274 - Revolving fund loan.
(a) Establishment of revolving fund loan. A revolving fund is established to provide advances to veterans who would otherwise be unable to begin or continue in a rehabilitation program without such assistance.
(b) Definition. The term advance means a non-interest loan from the revolving fund.
(c) Eligibility. A veteran is eligible for an advance if the following conditions are present:
(1) An Individualized Written Rehabilitation Plan, Individualized Extended Evaluation Plan, or Individualized Independent Living Plan has been prepared; and
(2) The veteran and VA staff agree on the terms and conditions of the plan.
(d) Advance conditions.
(1) An advance may be approved when the following conditions are met:
(i) The purpose of the advance is clearly and directly related to beginning, continuing, or reentering a rehabilitation program;
(ii) The veteran would otherwise be unable to begin, continue or reenter his or her rehabilitation program;
(iii) The advance does not exceed either the amount needed, or twice the monthly subsistence allowance for a veteran without dependents in full-time institutional training specified in § 21.260(b); and
(iv) The veteran has elected, or is in receipt of, subsistence allowance.
(2) An advance may not be made to a veteran who meets conditions described in paragraph (d)(1) of this section if the veteran:
(i) Has not fully repaid an advance;
(ii) Does not agree to the terms and conditions for repayment; or
(iii) Will not be eligible in the future for payments of pension, compensation, subsistence allowance, educational assistance, or retired pay.
(e) Determination of the amount of the advance.
(1) If the conditions described in paragraphs (c) and (d)(2) of this section are met, a Counseling Psychologist (CP), Vocational Rehabilitation Counselor (VRC), or vocational rehabilitation specialist in the Veteran Readiness and Employment (VR&E) Division will:
(i) Document the findings; and
(ii) Determine the amount of the advance.
(2) Loans will be made in multiples of $10.
(f) Repayment—(1) Offset possible. The amount advanced will be repaid in monthly installments from future VA payments for compensation, pension, subsistence allowance, educational assistance allowance or retired pay.
(i) Repayment will begin on the earlier of the following dates:
(A) The first day of the month following the month in which the advance is granted; or
(B) The first day of the month after receipt of the advance in which the veteran receives a subsistence allowance
(ii) The VR&E staff person who approves the advance will determine the rate of repayment.
(iii) The monthly rate of repayment may not be less than 10 percent of the amount advanced unless the monthly benefit against which the advance is being offset is less than that amount.
(2) Offset not possible. If the amount advanced cannot be repaid from the benefits cited in paragraph (f)(1) of this section because the veteran is not in receipt of any of these benefits, collection of the amount due will be made in the same manner as any other debt payable to VA.