Updating the GI Bill

Since World War 2, the “GI Bill” has enabled hundreds of thousands of veterans (and some active duty personnel) to get the college degree they needed to get ahead in life. 
Now, the GI Bill is going to be revised and updated.  But the several different proposals to do that have become a partisan taffy-pull with veterans in the middle.  Who’s right?

The two most prominent legislative proposals have come from the Senate, with one being sponsored by Sen. Jim Webb (D-Virg.) and the other by Sen. Lindsay Graham (R-SC). The latter has gained exposure and attention due to presumptive Republican presidential nominee John McCain’s decision to sign on as a cosponsor — a decision for which he has been challenged by Democratic presidential frontrunner Barack Obama (D-Ill.), the only individual of the four never to have served in the military.

Webb’s bill, S.22 (the “Post-9/11 Veterans Educational Assistance Act of 2007”), is focused on individuals who enlisted in the armed services on or after September 11, 2001, and completely alters the current GI Bill’s (also known as “the Montgomery Bill”)
structure. For example, S.22 eliminates the buy-in formerly required of enlistees, who had to pay $1,200 over the course of their first 12 months in service into the program in order to be eligible for the over-$36,000 in available monetary benefits, and adds to the benefit a $1,200 annual allowance for books and supplies, as well as a generous housing allowance that is based on the Basic Allowance for Housing earned by an E-5 (with dependents) on active duty.

The Webb bill moves away from the Montgomery modus operandi of shoehorning every student-veteran into a one-size-fits-all monthly benefit payment plan. Under the current GI Bill, a student is paid a certain dollar amount per month depending on how many credit hours that student is taking in that particular period, with the maximum amount being received if enrolled in a course load of 12 or more semester hours. This can create difficulty for students who take courses in the summer, when, due to the compressed schedule, a full course load is 6 hours rather than 12.  The current program recognizes that as half-time enrollment and pays the student accordingly during those months, meaning that the beneficiary’s real income is slashed. Further, the benefit is only usable for a certain number of months (36 total), so enrolling in a full course load in the summer means that months of benefit are used up and rewarded with less than full-time payments, resulting in overall benefit money being left on the table. 

S.22 changes this, altering the program to entirely cover tuition and fees at a state college or University — no more and no less. This likely means that payments will be made directly to the institution by the Department of Veterans Affairs, rather than monthly checks being sent to the beneficiary for deposit and use.

The Graham-McCain bill, (S.2938 the “Enhancement of Recruitment, Retention, and Readjustment Through Education Act of 2008”), eschews this total overhaul of the GI Bill program specifically for recent enlistees in favor of a simple update to the program in its current form. Portrayed as an attempt to increase both enlistment and reenlistment while also making it easier for veterans to pursue higher education, S.2938 increases the monthly benefits paid to service members with fewer than 6 years’ time in service to $1,500, while rewarding those who remain in the military for twelve or more years with a monthly payment that will reach $2,000 in fiscal year 2010.

The Graham-McCain proposal also increases the transferability of benefits to dependents, including spouses and children — something the Webb bill fails to address. Once again, S.2938 rewards extended terms of service by making those benefits 50% transferable after six years’ time in service, and 100% transferable after twelve years.

S.2938 would also afford service members the opportunity to use GI Bill funds to repay student loans while on active duty, and would extend benefits to members of the officer corps who remain in the military for an extended period of time.

Where there is overlap between the two proposals — specifically, for enlistees who joined the service on or after 9/11/01 — the tangible benefit of each is largely dependent on the student’s location and institution. J.D. Johannes, a Marine veteran, former Republican Senate staffer, and combat documentarian, crunched the numbers on the two benefits at his alma mater, Washburn University, at his web site, and discovered that the Graham-McCain proposal would provide more benefits to a student attending that relatively inexpensive state school than would the Webb proposal.

The difference comes from the relative costs of tuition and housing. For example, at the University of Georgia, the school from which I graduated, in-state tuition and fees are $5,264. A six-year veteran of the armed forces who enlisted after 9/11/01 would have that amount paid for them by the Webb bill, and would directly receive a $1,200 book allowance. On top of that would be the allowance that is the real money-maker for recipients of Webb’s proposed benefit: the monthly housing allowance. A student in Athens, GA, would receive $901.00 per month in untaxed housing allowance (for perspective, a student apartment in Athens, with roommates, generally costs between $350 and $650 per person). Whether this benefit is paid out during the summer is not clear from the text of the legislation; however, assuming, for the sake of argument, that it is, the total benefit received by a University of Georgia student under the Webb plan would be $17,276 — of which $12,012 would be in checks made out directly to the beneficiary.

Under Graham-McCain, an individual with the same amount of service who is enrolled at the same institution would simply receive twelve months of GI Bill benefit, in checks made out directly to the beneficiary. Over a nine-month academic year, assuming a six-hour course load in the summer term (and ignoring the VA’s standard proration of benefits in December and January due to semesters’ beginnings and endings not coinciding with the true beginning or end of the month), an individual would receive $15,402, all in payments directly to him.

At more expensive schools, or in more expensive housing areas (in Austin, Texas, for example, the average cost of a near-campus apartment is $800 per person, and the housing benefit is $1,112 per month), the advantages of the Webb plan are even greater than they are at a less costly school like UGA.

Both the Graham-McCain and Webb proposals for altering and modernizing the current veterans’ educational benefit structure have their high and low points. S.2938, the Republican-sponsored bill, offers less of an increase in benefits than S.22 does, but it is transferable, it rewards longer terms of service without penalizing those who separate before becoming career service members, and, perhaps most importantly, it is available to those who entered the armed forces before 9/11/01.

Webb’s proposal, though exclusive to those who entered active duty after September 11, offers an increase in both direct and indirect benefits, while limiting the flexibility currently enjoyed by GI Bill recipients.

The gulf between these pieces of legislation is awfully wide. Rather than stiff-arm each other over differences of opinion, something Sen. Webb is well known for, he and Sens. Graham and McCain should seek to combine the best aspects of both bills into something that truly modernizes and improves the veterans’ educational benefit system. Both pieces of legislation have elements that do that in a positive way.

But accompanying Sen. Obama’s incorporation of this issue into his stump speech will be an unnecessary widening of the partisan divide between the bills’ sponsors, perhaps to a degree that it cannot be bridged.  If that’s the result, it’s only the veterans who will really lose.


View All