Armed Forces Education Benefits Improvement Act

Armed Forces Education Benefits Improvement Act - Increases for FY2005 and thereafter the amount of monthly basic educational assistance under the Montgomery GI Bill (GI Bill) for veterans whose obligated period of active duty for such entitlement is three years. Increases such amounts, for FY2006 and thereafter, by the percentage increase in the Consumer Price Index.

Directs the Secretary of Defense to work expeditiously with the Secretary of Veterans Affairs to ensure that members of the Selected Reserve receive their educational benefits in a timely manner. Requires a study from the Secretary of: (1) Defense analyzing the effect of all GI Bill educational benefits on recruitment and retention; and (2) Veterans Affairs analyzing the effect of such benefits on the readjustment of veterans eligible for the increased benefits, above.

Increases for FY2005 and thereafter the amount of monthly educational assistance for members of the Selected Reserve who agree to remain members for at least six years. Increases such amounts, for FY2006 and thereafter, by the percentage increase in the Consumer Price Index.

Allows eligible members of the Armed Forces to make an irrevocable election to receive basic educational assistance under the GI Bill. Defines as eligible members those who: (1) first became a member or first served on active duty before July 1, 1985; (2) served on active duty without a break in service since such date; (3) continue to so serve during the one-year period following enactment of this Act; (4) have successfully completed the requirements of a secondary school diploma and the equivalent of 12 semester hours toward a standard college degree; and (5) when discharged or released, receive an honorable discharge.