I'm fairly sure we, as in the Coast Guard, do not pay them.

Just as an FYI on this issue: If you sent in your application to activate your GI Bill benefit (MGIB-AD, MGIB-SR, REAP, or new GI Bill) recently or not so long ago, you may be wondering when you can expect to receive your Letter of Eligibility. The Department of Veterans’ Affairs (DVA) has always quoted a processing time of between 3 and 4 months. You may get it a bit earlier, but don’t be surprised if it takes even longer than 4 months.

I've sent this one up the chain for clarification... check back soon.

Kristle,
The GI Bill is indeed intended for dependents- the dependents have to be listed as such in DEERS; thus if your family were to claim you as a dependent you could use the benefits if they were transferred to you be the military member.

So far as the distance learning question- you are correct, if you do only distance learning you will not receive your BAH or book monies. However, do note that if you are married you will surly not be eligible to be claimed by your father/mother as a dependent; if your husband-to-be elects (that is, if he's eligible to do so) to transfer his funds to you then you may be entitled to the education funds.

This particular question has been answered with the member, for similar questions you should contact the owners of the system (the DMDC) at 1.800.538.9522.

Mr. Rogers,
Here is the offical answer from our folks at HQ:

Anything other than an Honorable Discharge renders a member invalid from receiving Chapter 33 Benefits. Questions of this nature should be directed to the U.S. Department of Veteran’s Affairs. It is their program to determine eligibility of military members. All Coast Guard (CG) Headquarters does is oversee the transfer of benefits (TEB) to CG family members.

Mr. Rogers,
Thanks for the question, I should have an answer for you soon.

Mr. McFarland I've sent this up the flagpole for better clarification on both our parts. We'll be back with an answer soon.

Just a quick follow up on this Megan- we've forwarded the question to HQ for an "official" answer; but the short of is no- once you elect to transfer, whether paper is in hand not, it's done. However, and I'm going to quote my source here:
"The other answer is they might still have REAP.
For example--if they are eligible for two versions before the election--they only gave up one and not two when they changed."

With this being said this isn't the final answer as I stated we've sent this to HQ for an official answer- standby.

It would depend- if the member had reached their 20 year mark before
or on 1 August 2009 they've met the requirements. A member who is
retirement eligible (>20 years of Active Service) on 1 Aug 2009, is
not required to obligate further service in order to transfer
benefits.