Montgomery GI Bill Improvements Act of 2003

Montgomery GI Bill Improvements Act of 2003 - Amends Federal basic educational assistance provisions (the Montgomery GI Bill) to authorize enhanced educational assistance to a member of the armed forces who, after September 30, 2003: (1) first enters on active duty; (2) reenlists or continues to serve on active duty; (3) serves a continuous period of active duty of four years; or (4) serves and is discharged or released for a service-connected disability, at the convenience of the Government (after serving at least 42 months of such duty), or due to a reduction in force. Limits to 36 months the period for such enhanced assistance. Requires the payment of educational expenses under such program. Provides a monthly stipend for approved programs of education.

Increases the rates of basic educational assistance.

Repeals, with respect to such assistance: (1) a required monthly reduction in pay for individuals who do not elect to participate in such assistance program; (2) a provision authorizing individuals to elect not to receive such assistance; and (3) the requirement that participants complete the requirements of a high school diploma or equivalency certificate prior to the end of their initial obligated period of service in order to be eligible to receive such assistance.

Excludes educational assistance payments from income for purposes of eligibility for Federal educational loans.