What Can the GI Bill Do for You?

How the GI Bill Originated

In 1944, as part of a variety of benefits given for veterans of World War II, the Servicemen’s Readjustment Act was introduced. Commonly referred to as the “GI Bill” (World War II veterans were commonly referred to as “GIs.”), it provided veterans with the opportunity for low-cost mortgages, low-interest business loans, and assistance for tuition and living expenses for college or vocational students. It also provided GIs with a year of unemployment compensation. All veterans who had been on active duty during the years of the war for at least 90 days were eligible. Serving in combat was not a requirement, but soldiers who were dishonorably discharged from the service were not eligible. It became a law on June 2, 1944, and was formally called Servicemen’s Readjustment Act of 1944.

By the time 1956 rolled around approximately 2.2 million veterans had taken advantage of the GI Bill’s benefits to further their college education, and another 5.6 million used the benefits to take part in training programs. In Canada, there was a similar program for its veterans of World War II, and the economic impact it had on that country was similar to what happened here in the States.

The GI Bill is credited with creating the middle class in the United States, which had an extremely positive impact on this country. Economists as well as historians consider the bill to have been a resounding success in creating economic growth by improving “human capital.”

Unfortunately, there was negative along with the positive. The bill is also responsible for greatly increased racially inequality by excluding soldiers of color from many of the benefits. Black Americans at that time were left out of the provision of tools white Americans had access to build their lives.

Who Was Behind the GI Bill

While World War II was still raging, politicians along with President Franklin D. Roosevelt were debating postwar assistance. Roosevelt did not want to limit the recipients of benefits to only veterans; rather, he intended to include low-income citizens who needed the help. Veteran’ organizations, however, rallied for support in Congress to reject Roosevelt’s approach so the veterans-only stipulation was enforced. In part, the bill was created to avoid the repeat of the Bonus March of 1932, with veterans of the First World War protesting they did not receive their just due after the war had ended.

Introduced to the House on January 10, 1944, both chambers of the Senate approved their own versions of the bill the very next day. The bill initially focused only on “poor” veterans receiving aid.

Former Republican National Chairman Harry W. Colmery, who had also been a national commander in the American Legion, is reportedly the creator of the GI Bill’s first draft. As the story goes, he jotted down his thoughts on a napkin at the Mayflower Hotel in Washing, DC. Other contributors to the bill’s passage include Senator Ernest McFarland (D-Arizona) and Edith Nourse Rogers (R-Massachusetts), as well as Warren Atherton wo was known as “father of the GI Bill.”

Important Parts of the GI Bill

One of the critical provisions of the GI Bill was the fact that it offered home loans for servicemen with excellent terms, including low interest and no down payment. New construction was given particularly favorable terms, which resulted in millions of families moving out of cities into the suburbs of America.

The 52-20 clause was another provision of the GI Bill. Its purpose was to give former servicemen unemployment in the form of $20 each week for 52 weeks. What happened, though, was that most returning GIs found jobs rather quickly or opted to finish their education, so less than 20 percent of the money set aside for the program was actually distributed.

The GI Bill for Future Generations

The original GI Bill of 1944 was so successful, the government opted to offer similar features to later generations of veterans. One of those, the Veterans’ Adjustment Act of 1952 (signed into law on July 16, 1952), also offered benefits to veterans who served in the Korean War for 90 days and who were not dishonorably discharged. The 52-20 unemployment option was not available to these veterans, but they were entitled to a different type of unemployment compensation for 26 weeks.

Another difference between the acts of 1944 and 1952 was the way tuition was handled. Rather than having it paid directly to the educational institution, veterans received 110 dollars each month; they could use this at their own discretion toward their living expenses or education. When the program ended in January 1965, nearly half of the 5.5 million veterans who were eligible had taken advantage of the program. It is estimated that some 1.5 million Korean War veterans used the GI Bill to obtain home loans.

The GI Bill in Times of Peace

The Veterans Readjustment Benefits Act of 1966 extended benefits to those who served in the military during times of war and peace. Initially, the idea of providing benefits to veterans who did not go to war was rejected. President Dwight D. Eisenhower rejected a similar measure in 1959, citing the Bradley Commission’s conclusion that military service was an obligation for citizens rather than a reason to receive government benefits. But President Lyndon B. Johnson ultimately signed it into law in 1966.

Criticism of the bill came swiftly. Many on Capitol Hill and others within the veterans’ community believed the bill did not go far enough to offer real help to veterans. Others criticized that it did not compare with what had been offered on the original bill to World War II veterans. It is estimated that only about 25 percent of Vietnam vets even used their benefits. In the years that followed, Congress was able to make increases to the benefits, even when facing opposition from two notoriously conservative administrations under Presidents Richard M. Nixon and Gerald Ford.

When the military draft ended and this country’s forces were made up of those who volunteered to serve (starting in 1973), funding levels increased and more veterans took advantage of higher learning opportunities. Benefits began to be used as an inducement to attract enlistees under the Veterans Education Assistance Program (VEAP) and the Montgomery GI Bill (MGIB). Again, veterans had to have served for a specific amount of time (180 days in this instance) and had to have received an other-than-dishonorable discharge. Almost 700,000 veterans received education benefits under VEAP. For those who served after July 1, 1985, the MGIB replaced VEAP. VEAP offered veterans a plan that would let them forfeit 100 dollars a month from their first year of pay in return for a tuition allowance for up to three years.

What Does the GI Bill Mean for You?

If you are planning to take advantage of GI Bill benefits, here’s what you need to know:

  1. After you have left the service, you have 10 years to use your MGIB benefits and 15 years to use your post-9/11 GI Bill benefits. Keep in mind, though, that if you leave active duty but rejoin the service within those time periods for at least 90 days, “the clock” will re-set and you will get another 10 or 15 years from your previous discharge.
  2. Don’t look at the GI Bill as traditional financial aid. Money from the GI Bill is paid directly to the recipient rather than to a school or university. You can use the money as financial aid in a sense as you may be required to sign a promissory note based on that money, but if you receive loans based on them, you will have to pay these loans back (usually with payments you receive from the GI Bill). You are still eligible, then , for student loans as well as scholarships and Pell Grants.
  3. Make sure you are clear on what precisely is meant by “a month” when it comes to using benefits. There is a difference between what that means for veterans versus those on active duty.
  4. Once you start using the GI Bill, you can stop it any time—and then start it up again. It doesn’t have to be used all at once. In fact, if you plan well, you can use the benefits to finish your associate’s degree today, your bachelor’s degree a bit later, and still have enough left to help you finish up your master’s degree.
  5. Payment amounts for the GI Bill are based on several different factors, but the primary consideration will be the number of credits you are taking. Other factors may include the number of months you served on active duty. You’ll want to check into current GI Bill payment rate schedules to determine how this will impact your benefits.

Obtaining Your Benefits Under the GI Bill

If you are a veteran or on active duty currently, you should consider using your GI Bill benefits. For some, the application process is intimidating. But it doesn’t have to be. It can be completed in just four steps that can net you more than $40,000 in benefits for your education.

First, find a college or university that is approved for benefits in terms of training and education. This isn’t difficult, as most accredited educational institutions have VA approved programs.

Second, complete the Application for Benefits, which can usually be found with the school’s registrar. Depending on your current status as either a veteran or a soldier on active duty, you may have to include additional paperwork with your application.

Third, wait for your declaration of eligibility along with a letter further outlining your GI Bill benefits. In most situations, the school will send along your application and their paperwork to the VA office in its region. It may take from four to eight weeks before you receive your declaration of eligibility.

The bottom line is that if you are currently in the military or were not dishonorably discharged from the military and served more than 90 (or 180) days, you may be eligible for benefits that could help further you career and help provide you with a secure future.

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