H.R. 2034 would make changes to education benefit and pension programs administered by the Department of Veterans Affairs (VA). The costs of both programs are paid from mandatory appropriations and thus are reflected in the budget as direct spending. CBO estimates that enacting the bill would decrease net direct spending by $3 million over the 2025-2035 period (see Table 1). The budgetary effects of the legislation fall within budget functions 550 (health) and 700 (veterans benefits and services).
STEM Scholarships. Under the Post-9/11 GI Bill, VA pays tuition for students pursuing approved education programs and may also provide a housing allowance and book stipend. Beneficiaries can receive that assistance for up to 36 months. Through the Edith Nourse Rogers STEM Scholarship, the department can provide up to nine additional months of those benefits (up to a maximum of $30,000) to eligible students who pursue qualified undergraduate degrees in science, technology, engineering, mathematics, health care, or other fields approved by VA. In addition to other criteria, to be eligible for that scholarship, students must have completed at least 60 semester (or 90 quarter) credit hours and have less than six months of remaining GI Bill benefits.
Section 2 would make it easier for students to qualify for that scholarship by reducing the number of credit hours that they must have completed by 25 percent and by eliminating the requirement that they have less than six months of GI Bill benefits remaining. On the basis of information provided by VA, CBO expects that roughly 450 more students would become eligible for and use the scholarship each year at an average of approximately $13,500 per student, for a total cost of $61 million over the 2025‑2035 period.
Pensions and Medicaid. Under current law, VA reduces pension payments to veterans and survivors who reside in Medicaid nursing homes to $90 per month. That required reduction expires November 30, 2031. Section 3 of H.R. 2034 would extend that reduction for 16 months, through March 31, 2033. CBO estimates that extending that requirement would reduce VA benefits by $10 million per month. As a result of that reduction in beneficiaries’ income, Medicaid would pay more of the cost of their care, increasing spending for that program by $6 million per month. Thus, enacting section 3 would reduce net direct spending by $64 million over the 2025-2035 period.
Table 1.
Estimated Direct Spending Under H.R. 2034
Outlays By Fiscal Year, Millions of Dollars
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2025-2030
2025-2035
STEM Scholarships
0
5
5
6
6
6
6
6
7
7
7
28
61
Pensions and Medicaid
0
0
0
0
0
0
0
-40
-24
0
0
0
-64
Total Changes
0
5
5
6
6
6
6
-34
-17
7
7
28
-3
Budget authority equals outlays for all sections.
The CBO staff contacts for this estimate are Paul B.A. Holland (for education benefits) and Logan Smith (for pensions and Medicaid). The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.
