The GI Bill. Below, is a comprehensive overview of The American Legion s recommendations for strengthening the GI Bill.

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1 The GI Bill On December 15, 1943, a committee of prominent Legionnaires convened a meeting at the Mayflower Hotel in Washington, DC to develop a plan to correct the problems facing recently discharged veterans. Thirty-four Departments of The American Legion provided reports describing the poor treatment being received by returning servicemembers. This committee of Legionnaires determined that a strong piece of legislation encompassing all the needs of veterans should be introduced in Congress. When the meeting ended, committee member and attorney Harry W. Colmery of Kansas walked to Suite 570 of the Mayflower Hotel carrying notes from the meeting and resolutions from The American Legion National Convention and the Fall National Executive Committee meeting. Writing in longhand on hotel stationary, he penned the first draft of the Servicemen s Readjustment Act of 1944 The GI Bill. Senator Bennett C. Clark, one of the founders of The American Legion, introduced the bill in Congress on January 10, 1944 and President Franklin Delano Roosevelt signed it into law on June 22, Now, more than 60 years later, The American Legion continues to advocate for an effective GI Bill for America s veterans. Educational costs continue to increase and the needs of America s veterans continue to change and more National Guard and Reserve troops are serving longer and more frequently in support of the Global War on Terrorism. By working together, we as a nation can ensure that those brave men and women who wear the uniform of this country in defense of our freedoms receive an adequate GI Bill for the 21 st Century. Below, is a comprehensive overview of The American Legion s recommendations for strengthening the GI Bill. 1

2 The American Legion Recommendations to Enhance Veteran Education Benefits as Defined by Resolution Raise the Rates The American Legion recommends that the dollar amount of the educational entitlement be indexed to the average cost of college education including tuition, fees, textbooks and other supplies for commuter students at an accredited university, college or trade school for which they qualify. Additionally, the educational cost index should be reviewed and adjusted annually. Equity of Benefits for Service on Active Duty The American Legion supports a MGIB- Select Reserve participant reimbursement rate adjusted for time spent on Federal activation, State activation, and normal service for a period not to exceed 36 months. Recodification The American Legion recommends that Congress move the Montgomery GI Bill-Reserve Education Assistance Program (REAP, Chapter 1607) and the Montgomery GI Bill-Selected Reserve (MGIB-SR, Chapter 1606) and from Title 10, United States Code (USC), to Title 38, USC, and that the Department of Veterans Affairs (VA) have administrative authority for both the MGIB and the MGIB-SR benefits. We recommend that the annual appropriations for the MGIB and the MGIB-SR become annual mandatory appropriations within VA. Termination of $1200 pay-in The American Legion supports the termination of the current military payroll contribution ($1200) required for enrollment in MGIB. Additionally, The American Legion supports that enrollment in the MGIB shall be automatic upon enlistment. However, benefits will not be awarded unless eligibility criteria have been met. Transferability of Benefits The American Legion supports the transfer of Montgomery GI Bill benefits from veterans to their immediate family members if the veteran elects to do so. 2

3 Portability of Benefits The American Legion supports eliminating the ten-year delimiting period for veterans to use Montgomery GI Bill educational benefits and supports legislation that would allow all Reservists and National Guard members to use their MGIB-SR benefits for up to ten years after separation. Monthly Stipend The American Legion supports a monthly tax-free subsistence allowance indexed for inflation as part of the educational assistance package. Use MGIB to Repay Existing Education Loans The American Legion believes that if a veteran enrolled in the MGIB program acquired educational loans prior to enlisting in the Armed Forces, MGIB benefits may be used to repay existing educational loans. Automatic Enrollment The American Legion supports that enrollment in the MGIB shall be automatic upon enlistment. However, benefits will not be awarded unless eligibility criteria have been met. If a veteran enrolled in the MGIB becomes eligible for training and rehabilitation under Chapter 31 of title 38, USC, the veteran shall not receive less educational benefits than otherwise eligible to receive under MGIB. Reimbursement Rate for Non-Traditional Education The American Legion supports amending Title 38, USC, to restore the reimbursement rate for correspondence and distance learning training to 90 percent of tuition. 3

4 Currently, the GI Bill pays at a 100% rate: $1101 a month or, $9909 a year or, $39,636 maximum over 4 years. NEW GI BILL 1) Qualification for the 100% rate will be 3 years 2) Benefits Earned at a Cumulative Rate for Service on Active Duty Honorable active duty service would be the qualifier for education benefits. This accounts for 40% of the force (National Guard and Reserve). Benefits can be used after completion of a service contract or leaving of the military due to disability, hardship and other factors. Reservist called to duty for any combination of length or multiple tours will receive benefits based upon time served. This accounts for equity of service. 3) Tuition Benefits Aligned to the Highest Cost of In-state Tuition & Fees per state This would amount to a huge increase in yearly benefits Tuition will rise each year according to the highest in-state tuition of each state. The Department of Education reports that there has been a national annual increase of 6 percent each year for the last 30 years) 4) Breakdown of Benefit by Cumulative Time Served 3 months = 40% 6 months = 50% 12 months = 60% 18 months = 70% 24 months = 80% 30 months = 90% 36 months = 100% 5) Enlistment Kickers Added to the monthly stipend Maintains DOD authority to incentivize certain Military Occupational Specialties. Current kickers range from an additional $50 to $400 a month on top of the MGIB. 4

5 6) Tuition payments paid up front to servicemembers in the form of a credit/voucher Allows for payment of classes in full. Reduces the need to take out additional student loans to pay for the remainder of college. 7) Creation of a Variable Stipend for subsistence allowance Stipend would be in addition to cost of tuition Housing, books, supplies, other educational costs National Average monthly stipend would be approximately $1000 per month Rise an average of 3 percent each year to match the Consumer Price Index (CPI) Examples of Different Scenarios Under The American Legion s Recommended Changes: Service member enlists in Active Duty force. After 3 years of honorable service they will receive 100% of the full benefit. Currently, 1.4 million service members would become immediately eligible. A member of the Reserve Components is called to active duty for 12 months. Receives 60% of new benefit and can use benefits after completion of service. Currently 450,000 service members would become immediately eligible. A member of the Reserve Components is called to active duty for multiple tours. First tour is 12 months. Receives 60% of new benefit. o Can use new education benefits immediately. Called to active duty a second time for 6 months. o Now has total of 18 months of active duty service. Qualifies for 70% of the new benefit. A member of the Reserve Components called to active duty for many deployments. If reservist serves 3 years on active duty they will receive 100% of the benefit. Currently, 110,000 service members would become immediately eligible. If NEW GI BILL proposals were enacted today: A veteran who has honorably served 3 years on active duty will receive on average $63,900 for 4 years of school. An average increase of $24,000 (increase of 60%) Will better meet costs for in-state costs of college. Will remain significantly less than private institutions. Estimated Cost: $6 billion per year for all veteran education programs 5

6 NATIONAL AVERAGE COST OF TUITION INCREASES + 6% EACH YEAR NATIONAL AVERAGE STIPEND INCREASES + 3% EACH YEAR NEW GI BILL YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 10 YEAR 20 3 yrs. cumulative AD 100% AD Tuition: $6,000/yr $6,000 $6,360 $6,742 $7,146 $7,575 $8,029 $10,745 $19,243 Stipend: $1,000/month $9,000 $9,270 $9,548 $9,835 $10,130 $10,433 $12,095 $16,255 Total Yearly $15,000 $15,630 $16,290 $16,981 $17,704 $18,463 $22,840 $35, yrs. cumulative AD 90% AD Tuition: $5,400/yr $5,400 $5,724 $6,067 $6,431 $6,817 $7,226 $9,671 $17,319 Stipend: $900/month $8,100 $8,343 $8,593 $8,851 $9,117 $9,390 $10,886 $14,630 Total Yearly $13,500 $14,067 $14,661 $15,283 $15,934 $16,617 $20,556 $31,948 2 yrs. cumulative AD 80% AD Tuition: $6,000/yr $4,800 $5,088 $5,393 $5,717 $6,060 $6,423 $8,596 $15,394 Stipend: $800/month $7,200 $7,416 $7,638 $7,868 $8,104 $8,347 $9,676 $13,004 Total Yearly $12,000 $12,504 $13,032 $13,585 $14,164 $14,770 $18,272 $28, yrs. cumulative AD 70% AD Tuition: $6,000/yr $4,200 $4,452 $4,719 $5,002 $5,302 $5,621 $7,522 $13,470 Stipend: $700/month $6,300 $6,489 $6,684 $6,884 $7,091 $7,303 $8,467 $11,379 Total Yearly $10,500 $10,941 $11,403 $11,886 $12,393 $12,924 $15,988 $24,848 1 yrs. cumulative AD 60% AD Tuition: $3,600/yr $3,600 $3,816 $4,045 $4,288 $4,545 $4,818 $6,447 $11,546 Stipend: $600/month $5,400 $5,562 $5,729 $5,901 $6,078 $6,260 $7,257 $9,753 Total Yearly $9,000 $9,378 $9,774 $10,188 $10,623 $11,078 $13,704 $21,299 6 months cumulative AD 50% AD Tuition: $3,000/yr $3,000 $3,180 $3,371 $3,573 $3,787 $4,015 $5,373 $9,621 Stipend: $500/month $4,500 $4,635 $4,774 $4,917 $5,065 $5,217 $6,048 $8,128 Total Yearly $7,500 $7,815 $8,145 $8,490 $8,852 $9,231 $11,420 $17, days cumulative AD 40% AD Tuition:$2,400/yr $2,400 $2,544 $2,697 $2,858 $3,030 $3,212 $4,298 $7,697 Stipend: $400/month $3,600 $3,708 $3,819 $3,934 $4,052 $4,173 $4,838 $6,502 Total Yearly $6,000 $6,252 $6,516 $6,792 $7,082 $7,385 $9,136 $14, NEW GI BILL YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 10 YEAR 20 6

7 CURRENT GI BILL VS. PROPOSED GI BILL YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 100% Current GI Bill with average of $1,101 $1,123 $1,145 $1,168 $1,192 $1,216 $1,342 $1,636 2% increase per year Total Monthly $1,101 $1,123 $1,145 $1,168 $1,192 $1,216 $1,342 $1,636 Total Yearly based on 9 $9,909 $10,107 $10,309 $10,516 $10,726 $10,940 $12,079 $14,724 months 9 YEAR 10 YEAR 20 Total payout using 4 year projected increase $40,841 $41,658 $42,491 YEAR 0-3 YEAR 1-4 YEAR 2-5 NEW GI BILL 3 yrs. Cum. AD 100% AD Tuition: $6,000/yr $6,000 $6,360 $6,742 $7,146 $7,575 $8,029 $10,745 $19,243 Stipend: $1,000/month $9,000 $9,270 $9,548 $9,835 $10,130 $10,433 $12,095 $16,255 Total Yearly $15,000 $15,630 $16,290 $16,981 $17,704 $18,463 $22,840 $35,498 Total payout using 4 year projected increase $63,900 $66,605 $69,438 YEAR 0-3 YEAR 1-4 YEAR YEAR YEAR YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR % increase per annum 3% increase per annum 7

8 4 YEAR DEGREE PAYMENTS STARTING FROM YEAR 0-3 (NEW GI BILL) 4 YEAR DEGREE PAYMENTS USING EXISTING REAP PROGRAM OR MGIB-AD NEW GI BILL 3 yrs. cumulative AD Tuition: $6,000/yr Stipend: $1,000/month MGIB-AD Total Yearly $63,900 $39, yrs. cumulative AD Tuition: $5,400/yr Stipend: $900/month MGIB-AD 80% Total Yearly $57,510 $31,680 2 yrs. cumulative AD Tuition: $6,000/yr Stipend: $800/month MGIB-AD 80% Total Yearly $51,120 $31, yrs. cumulative AD REAP BENEFIT ON SINGLE LONGEST DEPLOYMENT Tuition: $6,000/yr Stipend: $700/month Total Yearly $44,730 $24,480 1 yrs. cumulative AD REAP BENEFIT ON SINGLE LONGEST DEPLOYMENT Tuition: $3,600/yr Stipend: $600/month Total Yearly $38,340 $24,480 6 months cumulative AD REAP BENEFIT ON SINGLE LONGEST DEPLOYMENT Tuition: $3,000/yr Stipend: $500/month Total Yearly $31,950 $15, days cumulative AD REAP BENEFIT ON SINGLE LONGEST DEPLOYMENT Tuition:$2,400/yr Stipend: $400/month Total Yearly $25,560 $15,840 NEW GI BILL 8

9 WWII Benefits: Tuition & Fees: Up to $500/yr (~$4100/yr. in current dollars) Monthly Allowance: $50/month $75/month (~$612/month in current dollars) Total Yearly: $1,175/yr. (~$9,603/yr. current dollars) In , the average cost of tuition and books and supplies was only $234 at a four-year public institution, $418 at a four-year private institution The minimum wage was $0.30-$0.40/hr. Amounting to about $3.50/hr in today s dollars. NEW GI BILL Tuition & Fees: Up to $6,000/yr (~$734/yr. in 1950 dollars) Monthly Allowance: $1,000/month (~$122/month in 1950 dollars) Total Yearly: $15,000/yr (~1,835/yr. in 1950 dollars) WWII Total Program Cost: $14.5 billion over 10 years (current dollars) NEW GI BILL Total Program Cost: ~$60 billion over 10 years (including current programs) WWII Total Vets Trained 7.8 million NEW GI BILL Total Vets Trained ~1.5 million (avg. increase of 150,000 new vets/yr.) WWII Average Cost/Vet: $1,900/veteran (current dollars) Current Cost/Vet (w/o NEW GI BILL) $4,500/veteran 9

10 MGIB ENTITLEMENT INCREASES AT 100% (2000 PRESENT RATES) 10