Veterans Programs Improvement Act of 2003 - Directs the Secretary of Veterans Affairs to increase, as of December 1, 2003, the rates of veterans' disability compensation, additional compensation for dependents, the clothing allowance for certain disabled adult children, and dependency and indemnity compensation for surviving spouses and children.

Makes the effective date for the award of death pension the same as that for the award of death compensation or dependency and indemnity compensation.

Excludes lump-sum insurance proceeds from income for purposes of eligibility for veterans' pensions.

Prohibits the payment of veterans' disability compensation for an alcohol- or drug-abuse related disability even if the the alcohol or drug abuse is secondary to a service-connected disability.

Provides alternative beneficiaries for National Service Life Insurance and United States Government Life Insurance proceeds when the first beneficiary does not make a claim.

Provides burial benefit eligibility for a veteran's surviving spouse who remarries following the veteran's death.

Makes permanent the authority for the State cemetery grants program.

Repeals the Department of Veterans Affairs Education Loan program.

Includes self-employment training under the Montgomery GI Bill.