Amid demands not to go ahead with the decision, a letter dated September 13, issued by the Department of Ex-Servicemen Welfare, capped the fee for tuition and hostel at Rs 10,000 per month, as per the recommendations.
The sources said the ministry was "apprised of the matter", indicating that a decision on the issue could be taken soon.
Navy chief Admiral Sunil Lanba has also written to the Defence Ministry requesting the government to review the decision of imposing a cap on the reimbursement of education of children of martyrs or of those disabled in action.
As per estimates, around 3,400 children of armed forces personnel have been impacted by the decision.
On Tuesday, Rajya Sabha MP Rajeev Chandrasekhar wrote to Defence Minister Nirmala Sitharaman, urging her not to cap the total expenditure towards tuition fee and hostel charge at Rs 10,000.
Earlier, Punjab Chief Minister Amarinder Singh and former army chief and Minister of State for External Affairs General V.K. Singh have also urged the minister to review the move.
The scheme for government bearing the cost of education of ex-servicemen's children was announced in the Lok Sabha on December 18, 1971 - two days after the Pakistani forces surrendered in Dhaka after the India-Pakistan war that led to liberation of Bangladesh.
Chandrasekhar in his letter to the minister said capping the fund "goes against the very principal by which this scheme was implemented".