Hi Judy, Your husband is definitely eligible for Post 9/11 GI Bill benefits, as he served at least 90 days of active duty service after 10 September 2001, and because he was already eligible for Montgomery GI Bill benefits, he may elect to switch his Montgomery GI Bill benefits to the Post 9/11 GI Bill. He should go to the VONAPP website, and follow the directions in order to change over to the Post 9/11 GI Bill. His disability doesn’t affect anything with the Post 9/11 GI Bill, but he can elect to use the Chapter 31 Vocational Rehabilitation benefits instead of the GI Bill, if he wishes.
He will not be able to transfer Post 9/11 GI Bill benefits to your children. The transfer provision was added to the Post 9/11 GI Bill in August 2009, and in order to be eligible for the provision service members had to have been on active duty 1 August 2009, or come onto active duty since then. You and your husband should check on the Navy-Marine Corps Relief Society site, they have grants and scholarships available for the children of Navy veterans, and they have links to other sites which also offer education benefits to children of Navy veterans.