Veterans Educational Assistance Act of 1981

Veterans' Educational Assistance Act of 1981 - Establishes a new educational assistance program for the all-volunteer force. Entitles veterans who are graduates of a secondary school and who have served in the armed forces on continuous active duty for at least three years to basic educational assistance. Entitles veterans of the Selected Reserve and the National Guard who are graduates of secondary school and who have served at least two years of continuous active duty in the armed forces and at least four years of continuous duty in the Selected Reserve to basic educational assistance. Sets forth the formula for determining the length of such assistance based on the length of time served. Entitles such veterans to a monthly assistance allowance of $250 for a full-time approved program of education. Permits enrollment, if eligible, in a program of education while an individual continues to perform his duties.

Entitles veterans who have served three or more consecutive years of active duty in addition to those required for basic educational assistance to supplemental educational assistance. Entitles veterans of the Selected Reserve who have served two or more consecutive years of active duty and four or more consecutive years of duty in the reserves in addition to that required for basic educational assistance to supplemental educational assistance.

Entitles such veterans to a monthly supplemental assistance allowance of $300 a month. Permits the provision of such assistance to an individual entitled to basic educational assistance who has a skill or specialty in which there is a critical shortage of personnel. Permits the Secretary of Defense to authorize such an individual to transfer to a dependent part or all of such individual's entitlement to educational assistance. Sets forth the conditions under which transferred benefits may be provided.

Permits the Secretary of a military branch to enter into preservice educational assistance agreements to encourage enlistment in the active-duty and reserve components. Sets forth the terms and conditions for such assistance.

Establishes a ten year delimiting period for educational assistance. Excludes time spent as a prisoner of war subsequent to discharge and time spent physically or mentally disabled. Limits educational assistance to individuals being furnished subsistence to the amount an institution would charge similarly circumstanced nonveterans. Prohibits participation in more than one program of educational assistance.

Allocates the administration and costs of such programs to the Veterans' Administration and the Department of Defense. Requires predischarge counseling which includes a discussion of educational benefit entitlements.

Requires the Secretary of Defense and the Administrator to submit to Congress a biennial report on the operations of such programs.

Amends the Post-Vietnam Era Veterans' Educational Assistance Act of 1977 to terminate the right to enroll in the Post-Vietnam Era Veterans' Educational Assistance Program after December 31, 1981.

Amends the Department of Defense Authorization Act, 1981, to extend the pilot Department of Defense educational loan repayment program.