This study examined positive and normative policy issues in the use of educational benefits as military service enlistment incentives. A test of the attractiveness of enhancements to the Veterans' Educational Assistance Program (VEAP) has been underway since January 1979. The enhancements, called VEAP "kickers," are limited to high school graduates in mental categories who enlist in the Army's combat arms or in certain of the Navy's sea-going engineering ratings. Examined from the perspective of the services, the VEAP kicker does not appear to be as attractive an enlistment incentive as might be supposed. Cash enlistment bonuses for three-year enlistees should be more cost-effective. Alternatively, eliminating the current mental category restriction of the kicker would raise costs per recruit but should yield a much greater response of well-motivated recruits. It would also reduce the likelihood of discrimination charges being raised against the VEAP kicker program, which disproportionately disqualifies blacks and other minorities. Four recommendations for research and policy action emerge from the analysis: (1) the VEAP kicker possibly should be eliminated as a selective enlistment incentive in favor of straight enlistment bonuses; (2) if the kicker is retained, it should be offered to all high school graduate combat arms enlistees; (3) the attrition and retention of current kicker participants should be monitored; and (4) to improve the attractiveness of VEAP, interest should be paid on individual and government contributions. (KC)