Why You Should Love The New GI Bill

Have you ever seen pictures of football players from the 1940s? With their leather helmets and inadequate padding, they seem ill-prepared for the game with which we are so familiar. The players themselves seem smaller, less powerful, and less aggressive than players in the new millennium. If I had a big obstacle in my way, I would easily pick a member of the 2008 Pittsburgh Steelers to knock it down before I would turn to a member of the 1944 Cleveland Rams in his prime.

The Servicemen’s Readjustment Act of 1944 was the first GI Bill. In August 2009, the latest of iteration of that concept, the Post-9/11 GI Bill, begins paying out benefits. The original Bill was a good benefit to help veterans pursue educational goals, but if it were a football player, it definitely would have worn a leather helmet. The benefit evolved into something more powerful over time, but the new GI Bill is decidedly a muscle-bound, modern day Goliath…on performance enhancing drugs.

The military has a tradition of paying incentives to veterans in college. You enroll in college, and depending on a few factors, the government sends you money every month. The amounts can be substantial, but they have nothing to do with the actual cost of your education.

Similarly, the military has a tradition of paying for the education of servicemembers. If you are on Active Duty, you have the opportunity to qualify for Tuition Assistance. Each branch has its own version with its own restrictions, but the money is typically paid to your school and applied directly to your bill. The amounts paid are capped—that is, your bill may be more than your benefits cover—but the amount is tied to the cost of your education.

The Post-9/11 GI Bill has both components. It provides cash incentives paid directly to you and education benefits paid directly to your college.

Amounts

The bottom line is that this benefit pays a great deal of money for veterans and servicemembers pursuing college degrees.

The amount of tuition and fees that the Post-9/11 GI Bill can pay to your school depends on two factors: your percentage of eligibility and the state in which you attend college.

We will discuss eligibility below, but let’s discuss the location of the school. The legislature has determined the maximum amounts the Bill will pay based on the state in which the college sits. The chart, available at www.gibill.va.gov/GI_Bill_Info/CH33/Tuition_and_fees.htm, gives the maximum amount of tuition per credit hour and the maximum amount of fees per term.

For example, assume that a veteran is 100% eligible for the benefit and enrolled in 12 credits at an approved institution in North Carolina. The maximum per credit amount the Bill allows is $482.50, and the maximum amount in fees is $2,045.50 per term. Therefore, he could receive up to $7,835.50 ($482.50 x 12 + $2,045.50) credited directly to the college bill. He could not, however, receive a refund if the education was less expensive. And if it is more expensive, the veteran would be responsible for that balance.

The location of the college is also important for determining the level of money one can receive directly from the government. The Bill pays a Basic Housing Allowance (BAH) at the E-5 with dependents level, regardless of actual rank or rank at discharge. BAH is determined by the location of the school attended.

In the example above, if the veteran attends the University of North Carolina at Chapel Hill, he would receive $1,242 per month every month that he qualified for the benefit.

Moreover, the Post-9/11 GI Bill comes with a rural benefit. This is a one-time payment of $500 for people who live in counties with fewer than seven people per square mile, and who move to attend school more than 500 miles away or who travel by air to attend a college because no land-based method of travel exists. Finally, the Bill provides for a book stipend of up to $1,000 per year. Therefore, in the case of our veteran at UNC, he could enroll in 12 credits per term, three terms per year for three years; and, with the rural benefit and book stipends, he can receive $118,731.50 from the benefit, including $48,212 paid directly to him. By comparison, he would have received $47,556 for the same experience under the Montgomery GI Bill (MGIB) for Active Duty.

Eligibility

The basic qualification is that you must have served at least 90 days on Active Duty after September 10, 2001, and received an Honorable Discharge.

If the nature and length of your service does not meet the 100% threshold, the benefits are prorated. If, for instance, our veteran at UNC qualified for only 60% eligibility, he would receive 60% of the maximum tuition, 60% of the maximum fees, 60% of the BAH, and $600 per year for books.

Not all education, however, qualifies for the Post-9/11 GI Bill. Programs must be at a qualified Institution of Higher Learning, or IHL. The general rule is that your program must be leading directly to a degree. Qualified Non-College Degree programs, or NCDs, are authorized for payment under other versions of the GI Bill, but not the Post-9/11 GI Bill. Similarly, correspondence courses, flight training, and on the job training are not authorized under the Bill.

In addition, you may find that you do not qualify for every part of the new GI Bill. If you are still on Active Duty, enrolled less than half-time in college, or attending a program offered entirely online, you do not qualify for the BAH allowance. Active Duty personnel also do not qualify for the annual book stipend.

Your eligibility remains in effect for 15 years or until the benefits are exhausted. The Bill provides for 36 months of benefits.

Unlike the Active Duty version of the MGIB, the Post-9/11 GI Bill does not require an initial investment of $1,200. Thus, even military personnel serving on Active Duty who opted not to invest in the MGIB may still be eligible for the new Bill.

Which benefit to use?

Choosing the right benefit can be complicated. The name of the game is maximizing your benefits within the bounds of the programs.

For example, assume that a person is eligible for the maximum payout of both the Active Duty MGIB and the Post-9/11 GI Bill. Further, assume that she lives and attends college in a state that offers free tuition and fees to certain veterans. She cannot receive benefits from both programs, so she has to choose one or the other. If she chooses the Post-9/11 GI Bill, she will receive the book stipends and the housing allowance; the Bill would pay tuition to the school, but there is no tuition. On the other hand, she would receive $1,321 per month under the MGIB.

The choice will also depend on the determined maximums for your state and the actual cost of your institution. For instance, imagine a veteran qualified for the same benefits as above. If she is in Pennsylvania, each term in which she is enrolled in 12 credits, the Post-9/11 GI Bill is willing to pay tuition up to $8,400, plus fees. But assume that she is attending a community college. Her actual tuition may only be $1,000 per term. In the end, it may come down to the housing allowance. In this example in Pennsylvania, her allowance may be between $805 and $1,768.

Most people paying for their own education and eligible for multiple benefits will receive the most benefit from the Post-9/11 GI Bill, but it is important to weigh the actual payouts before making a selection.

Transfer to Dependents

One of the most highly anticipated features of the Post-9/11 GI Bill is the ability to transfer the benefits to a dependent. Not all of the information is available yet, but we know a few facts about this aspect of the Bill.

The first item to consider is that not every person is eligible to transfer their benefits. Servicemembers must have served at least six years in order to transfer. In addition, they must obligate to a period of additional service.

Moreover, only certain dependents are eligible to receive the benefits. A spouse is eligible, but children must be unmarried and under 18, between 18 and 23 and enrolled in school, or over 18 and was incapable of self-support before reaching age 18. Once the benefits are transferred, a subsequent marriage or divorce does not affect them. The servicemember, however, always has the right to revoke or modify the transfer.

It would be nice to have all of the answers now, but you must admit: We’ve come a long way since 1944.

By Sean-Michael Green