(a)(1) In accordance with paragraph (4), individuals utilized under the authority of subsection (b) shall be paid an additional educational assistance allowance (hereinafter in this section referred to as “work-study allowance”). Such allowance shall be paid in return for an individual‘s entering into an agreement described in paragraph (3).

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(2) Such work-study allowance shall be paid in an amount equal to the product of—

(A) the applicable hourly minimum wage; and

(B) the number of hours worked during the applicable period.

(3) An agreement described in this paragraph is an agreement of an individual to perform services, during or between periods of enrollment, aggregating not more than a number of hours equal to 25 times the number of weeks in the semester or other applicable enrollment period, required in connection with a qualifying work-study activity.

(4)(A) With respect to covered work-study activities, the Secretary shall carry out this section by providing to participating educational institutions an annual amount for the institution to use in paying work-study allowance under paragraph (1) to individuals enrolled at the institution.

(B) With respect to a participating educational institution that participated in the work-study program under this section during the academic year beginning August 1, 2018, the Secretary shall determine the annual amount to provide to the educational institution under subparagraph (A) as follows:

(i) For the academic year beginning August 1, 2020, the amount shall be the total amount, determined in consultation with the educational institution, that the Secretary paid under this section for covered work-study activities to individuals enrolled at such educational institution during the academic year beginning August 1, 2018.

(ii) Except as provided by clauses (ii) or (iii) of subparagraph (D), for each academic year beginning on or after August 1, 2021, the amount shall be the total amount the educational institution paid under this section for work-study allowance for covered work-study activities to individuals enrolled at such educational institution during the previous academic year in which individuals participated in the work-study program.

(C) With respect to a participating educational institution that did not participate in the work-study program under this section during the academic year beginning August 1, 2018, the Secretary shall determine the annual amount to provide to the educational institution under subparagraph (A) as follows:

(i) For the first academic year in which the educational institution participates in the work-study program beginning on or after August 1, 2020, the amount shall be an amount, determined in consultation with the educational institution, that the Secretary determines appropriate based on amounts provided to similar educational institutions pursuant to subparagraph (B).

(ii) Except as provided by clauses (ii) or (iii) of subparagraph (D), for each academic year occurring after the academic year specified in clause (i), the amount shall be the total amount the educational institution paid under this section for work-study allowance for covered work-study activities to individuals enrolled at such educational institution during the previous academic year in which individuals enrolled at such educational institution participated in the work-study program.

(D)(i) Except as provided in clause (ii), if the Secretary provides an annual amount to a participating educational institution under subparagraph (B) or (C) that is more than the total amount the educational institution pays to individuals under paragraph (1) for covered work-study activities, the educational institution shall return to the Secretary the unpaid amount and the Secretary shall transfer such amount into the general fund of the Treasury.

(ii) If the annual amount provided to a participating educational institution under subparagraph (B) or (C) is more, but less than 25 percent more, than the total amount the educational institution pays to individuals under paragraph (1) for covered work-study activities, and the educational institution plans to participate in the work-study program under this section during the subsequent academic year, the educational institution may retain the amount of the overpayment if the educational institution notifies the Secretary of the amount of the overpayment and the intention of the educational institution to retain such amount. Any amount retained by an educational institution under this clause may only be used by the educational institution to provide work-study allowance to individuals enrolled at the educational institution.

(iii) At any time a participating educational institution may request the Secretary to increase the annual amount that the Secretary provides the educational institution under subparagraph (B) or (C). The Secretary shall approve or disapprove such request by not later than 30 days after the date of the request.

(iv) Whenever the Secretary finds that a participating educational institution paid an amount of work-study allowance under this paragraph to an individual for a purpose other than covered work-study activities, such payment shall constitute a liability of the educational institution to the United States.

(E)(i) Pursuant to section 3690(c), section 3693, and other provisions of chapter 36 of this title, the Secretary shall ensure that participating educational institutions carry out the work-study allowance program in compliance with this section.

(ii) The Secretary may prohibit an educational institution from being a participating educational institution under this paragraph if the Secretary determines that the educational institution is not in compliance with this section.

(F) In this paragraph:

(i) The term “covered work-study activities” means qualifying work-study activities described in subparagraphs (A), (B), (H), (I), or (J) of paragraph (5) for which an individual is paid a work-study allowance.

(ii) The term “participating educational institution” means an educational institution that—

(I)(aa) during the five-academic-year period occurring before an academic year during which the Secretary carries out this paragraph, the educational institution had on average more than 10 individuals per academic year participating in a covered work-study activity under this section; or

(bb) the educational institution is not described by item (aa) but informs the Secretary that the institution expects to have more than 10 individuals in the following academic year participating in a covered work-study activity under this section; and

(II) voluntarily chooses to be a participating educational institution under this paragraph.

(5) For the purposes of this section, the term “qualifying work-study activity” means any of the following:

(A) The outreach services program under chapter 63 of this title as carried out under the supervision of a Department employee or, during the period preceding June 30, 2013, or any time on or after June 30, 2017, outreach services to servicemembers and veterans furnished by employees of a State approving agency.

(B) The preparation and processing of necessary papers and other documents at educational institutions or regional offices or facilities of the Department.

(C) The provision of hospital and domiciliary care and medical treatment under chapter 17 of this title, including, during the period preceding June 30, 2013, or any time on or after June 30, 2017, the provision of such care to veterans in a State home for which payment is made under section 1741 of this title.

(D) Any other activity of the Department as the Secretary determines appropriate.

(E) In the case of an individual who is receiving educational assistance under chapter 1606 or 1607 of title 10, an activity relating to the administration of that chapter at Department of Defense, Coast Guard, or National Guard facilities.

(F) During the period preceding June 30, 2013, or any time on or after June 30, 2017, an activity relating to the administration of a national cemetery or a State veterans’ cemetery.

(G) Any activity of a State veterans agency related to providing assistance to veterans in obtaining any benefit under the laws administered by the Secretary or the laws of the State.

(H) A position working in a Center of Excellence for Veteran Student Success, as established pursuant to part T of title VIII of the Higher Education Act of 1965 (20 U.S.C. 1161t et seq.).

(I) A position working in a cooperative program carried out jointly by the Department and an institution of higher learning.

(J) Any other veterans-related position in an institution of higher learning.

(K) The following activities carried out at the offices of Members of Congress for such Members:

(i) The distribution of information to members of the Armed Forces, veterans, and their dependents about the benefits and services under laws administered by the Secretary and other appropriate governmental and nongovernmental programs.

(ii) The preparation and processing of papers and other documents, including documents to assist in the preparation and presentation of claims for benefits under laws administered by the Secretary.

(6) An individual may elect, in a manner prescribed by the Secretary, to be paid in advance an amount equal to 40 percent of the total amount of the work-study allowance agreed to be paid under the agreement in return for the individual’s agreement to perform the number of hours of work specified in the agreement (but not more than an amount equal to 50 times the applicable hourly minimum wage).

(7) For the purposes of this subsection and subsection (e), the term “applicable hourly minimum wages” means—

(A) the hourly minimum wage under section 6(a) of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)); or

(B) the hourly minimum wage under comparable law of the State in which the services are to be performed, if such wage is higher than the wage referred to in subparagraph (A) and the Secretary has made a determination to pay such higher wage.

(b) Notwithstanding any other provision of law, the Secretary shall, subject to the provisions of subsection (e) of this section, utilize, in connection with the activities specified in subsection (a)(1) of this section, the service of individuals who are pursuing programs of rehabilitation, education, or training under chapter 30, 31, 32, 33, or 34 of this title or chapter 1606 or 1607 of title 10, at a rate equal to at least three-quarters of that required of a full-time student. In carrying out this section, the Secretary, wherever feasible, shall give priority to veterans with disabilities rated at 30 percent or more for purposes of chapter 11 of this title. In the event an individual ceases to be at least a three-quarter-time student before completing such agreement, the individual may, with the approval of the Secretary, be permitted to complete such agreement.

(c) The Secretary shall determine the number of individuals whose services the Department of Veterans Affairs can effectively utilize and the types of services that such individuals may be required to perform, on the basis of a survey, which the Secretary shall conduct annually, of each Department of Veterans Affairs regional office in order to determine the numbers of individuals whose services can effectively be utilized during an enrollment period in each geographical area where Department of Veterans Affairs activities are conducted, and shall determine which individuals shall be offered agreements under this section in accordance with regulations which the Secretary shall prescribe, including as criteria (1) the need of the individual to augment the veteran’s educational assistance or subsistence allowance; (2) the availability to the individual of transportation to the place where the individual’s services are to be performed; (3) the motivation of the individual; and (4) in the case of a disabled veteran pursuing a course of vocational rehabilitation under chapter 31 of this title, the compatibility of the work assignment to the veteran’s physical condition.

(d) While performing the services authorized by this section, individuals shall be deemed employees of the United States for the purposes of the benefits of chapter 81 of title 5 but not for the purposes of laws administrated by the Office of Personnel Management.

(e)(1) Subject to paragraph (2) of this subsection, the Secretary may, notwithstanding any other provision of law, enter into an agreement with an individual under this section, or a modification of such an agreement, whereby the individual agrees to perform a qualifying work-study activity described in subsection (a)(5) and agrees that the Secretary shall, in lieu of paying the work-study allowance payable for such services, as provided in subsection (a) of this section, deduct the amount of the allowance from the amount which the individual has been determined to be indebted to the United States by virtue of such individual’s participation in a benefits program under this chapter, chapter 30, 31, 32, 33, 35, or 36 of this title, or chapter 1606 or 1607 of title 10 (other than an indebtedness arising from a refund penalty imposed under section 2135 ¹ of such title).

(2)(A) Subject to subparagraph (B) of this paragraph, the provisions of this section (other than those provisions which are determined by the Secretary to be inapplicable to an agreement under this subsection) shall apply to any agreement authorized under paragraph (1) of this subsection.

(B) For the purposes of this subsection, the Secretary may—

(i) waive, in whole or in part, the limitations in subsection (a) of this section concerning the number of hours and periods during which services can be performed by the individual and the provisions of subsection (b) of this section requiring the individual’s pursuit of a program of rehabilitation, education, or training;

(ii) in accordance with such terms and conditions as may be specified in the agreement under this subsection, waive or defer charging interest and administrative costs pursuant to section 5315 of this title on the indebtedness to be satisfied by performance of the agreement; and

(iii) notwithstanding the indebtedness offset provisions of section 5314 of this title, waive or defer until the termination of an agreement under this subsection the deduction of all or any portion of the amount of indebtedness covered by the agreement from future payments to the individual as described in section 5314 of this title.

(3)(A) Subject to the provisions of subparagraphs (B) and (C) of this paragraph, an agreement authorized under this subsection shall terminate in accordance with the provisions of this section and the terms and conditions of the agreement which are consistent with this subsection.

(B) In no event shall an agreement under this subsection continue in force after the total amount of the individual’s indebtedness described in paragraph (1) of this subsection has been recouped, waived, or otherwise liquidated.

(C) Notwithstanding the provisions of subparagraphs (A) and (B) of this paragraph, if the Secretary finds that an individual was without fault and was allowed to perform services described in the agreement after its termination, the Secretary shall, as reasonable compensation therefor, pay the individual at the applicable hourly minimum wage rate for such services as the Secretary determines were satisfactorily performed.

(4) The Secretary shall promulgate regulations to carry out this subsection.

(f)(1) In case of an individual who is in receipt of work-study allowance pursuant to an agreement described in subsection (a)(3) as of the date on which an emergency situation occurs and who is unable to continue to perform qualifying work-study activities described in subsection (a)(4) by reason of the emergency situation—

(A) the Secretary may continue to pay work-study allowance under this section or make deductions described in subsection (e)(1) during the period of such emergency situation, notwithstanding the inability of the individual to perform such work-study activities by reason of such emergency situation; and

(B) at the option of the individual, the Secretary shall extend the agreement described in subsection (a)(3) with the individual for any subsequent period of enrollment initiated during the emergency situation, notwithstanding the inability of the individual to perform work-study activities described in subsection (a)(4) by reason of such emergency situation.

(2) The amount of work-study allowance payable to an individual under paragraph (1)(A) during the period of an emergency situation shall be an amount determined by the Secretary but may not exceed the amount that would be payable under subsection (a)(2) if the individual worked 25 hours per week paid during such period.

(3) The term “emergency situation” has the meaning given that term in section 3601 of this title.