Podcast Show Notes & Transcript

In this show Mike and Amy cover an overview of the GI Bill primarily focusing on the Post 9/11 GI Bill: 

• History of the GI Bill (1:26)
• Components of Post 9/11 GI Bill (3:21)
• Post 9/11 GI Bill Tuition Benefit (4:07)
• Yellow Ribbon Program (5:25)
• Housing Allowance Benefit (7:31)
• Length of benefit (10:01)
• Limitations of the benefit (12:05)
• Transferring Post 9/11 Benefit (12:37)
• When beneficiaries must use the benefit (16:07)

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TRANSCRIPT

Mike:

Today, we’re going to be talking about the post 911 GI Bill. The GI Bill is an awesome benefit available to service members who have served after September 11th, 2001. Like previous versions of the GI Bill that helped the middle class build into what it is today, books, GI Bill provides money for tuition fees. Housing allowance and money for books and supplies for military members who and veterans who want to get an advanced degree.

Amy:

Now, unlike previous versions of the GI Bill, the Post 911 GI Bill can also be transferred to the military member, spouse or their children. So in this episode, we’ll talk about the basics of the post 911 GI Bill and how transferring it works, and in Part 2 we’ll talk about the best way is to use the GI Bill to get the most value. You can.

 

INTRO

 

Mike:

So Amy, let’s start with a little history. The GI Bill has been around for a while. It was originally known as the Serviceman Man’s Readjustment Act of 1944. It was specifically designed to help service members returning from World War Two adjust back to their civilian life. Didn’t want to find the country, didn’t want to find itself in the situation like after World War One, where a lot of the those veterans had a real hard time adjusting. There were no benefits and that original GI Bill was in place until 1956. And in that, you know, 12 or so years over 7.8 million veterans use their benefits and over 2.2 million of them went to college or university.

Amy:

That’s super interesting history. I actually didn’t know that, but to continue the story in 1984, the Montgomery GI Bill was instituted. And this allowed service members to pay $100 per month for the for 12 months in exchange for receiving education benefits. This was the primary GI Bill until 2008, when the Post 911 GI Bill was passed. So some Members may still have the Montgomery GI bill benefits, but we’re going to focus on the post 911 GI bill because that’s what the majority of service members have today or are using. So Mike, why don’t you kick us off with some basics around post 9? 11 GI bill.

Mike:

Here and since we did a little history, talked about a few others, and the Montgomery GI bill is still kind of out there kicking around for, for some veterans who joined a long time ago, when we refer to the GI Bill now going forward, we’re talking about the post 911 GI Bill. So that sounds good. Instead of having to say post 911 ever. Time.

Amy:

Yeah, that makes perfect sense.

Mike:

So OK the the basics. So as our reference, the GI Bill covers tuition and fees. A housing allowance subject to a few limitations we’ll talk about. A books book and supply allowance. And potentially money to move if you live in a very rural area. Now there are nuances to all these, and that’s what we’ll kind of break down in this episode. But you want to hit the tuition and fees. Is there any limit to the what would the GI Bill cover? I mean, what we’re seeing, we’re we’re we’re about to see colleges hit the $100,000 mark per year, which is just. Crazy. So can I go anywhere?

Amy:

So GI Bill does have a limit on tuition and fees. VA covers the full cost of public in state tuition and fees, and so that means that varies state by state. So some states have cheaper in state tuition. So it depends on. Which state you’re? You’re going to go to school in. That doesn’t mean that you. Only can go to a public school in your state. It just means that it’s the maximum they’re going to that the VA will pay. So for example, Mike, you’re in Missouri. If and your daughter is getting ready to go off to school here pretty soon. If your daughter wanted to go to the University of Missouri in Columbia as an example. Tuition will be covered, but if she wanted to go to Washington University in Saint Louis, that tuition is about $60,000 per year. So the VA would only pay up to 27,000 because that’s the highest public school tuition for Missouri. So that means that you’re still going to have to find $33,000 per year to send your your daughter to Washington University versus University of Missouri.

Mike:

Well, that’s that’s still a lot of money, but the one nice thing. Some schools do offer an additional option. They’re they’re they’re called yellow ribbon schools and they enter into an agreement with the VA where any money, any additional money they want to put toward that, the VA will match kind of dollar for dollar. So and that can be a limited amount. Some schools do maybe $5000 at a. I’m. Others do a lot more, but let’s say it’s a full tuition. So in this case, if watch you said yes, we want to be a full tuition, yellow ribbon school. They pay about $16,500, half of that the VA would match it. And again, this is varies by school, by school. As I said, some schools, you know, it may be a couple $1000 that you get extra to apply to. That but other schools do meet full private tuition and we’ll put in the show notes. But the VA has a site that explains exactly, you know, if a school is a yellow ribbon school, what they offer. And one of the other limitation schools can sometimes. But on it is they may not give. They may have a limited number of yellow ribbon scholarships that they give out, so you’ll want to investigate that if you are considering a yellow ribbon school. Understand you know how much more money you could be getting, and are there any limitations on how many of those they actually. Deval. Anything else I missed on or we missed on the tuition and fees?

Amy:

I don’t think so. Just you know, to foot stomp the yellow ribbon program and taking a look at the link that’s going to be in the show notes to make sure you understand what’s possible, what may not be possible, what’s in play, what’s not in play. So I think we’re good on tuition and fees. What’s next?

Mike:

So another big expense of college is room and board, you know, so you may be thinking, well, do I do I have to come up with that money. You know, if if tuition is covered, but are there, are there any benefits around that?

Amy:

There are, which is amazing. So as long as you’re at least half time as defined by the school you’re attending, you’ll qualify for housing allowance and the housing allowance is based on the ZIP code of where you take the majority of your classes. At the E5 rate with dependence and this housing allowance is tax free. Right, Mike?

Mike:

It is 2 caveats. If you’ve transferred your GI Bill, which we’ll talk some about to your spouse, and you’re still on active duty. Your spouse will not get the housing allowance because you’re already getting it as a an active service member. Also, if you’re taking online classes, you. Get 50% of the national average housing allowance so you know, just consider that when you’re thinking about how you’re gonna attain your degree. If you’re counting on the. Housing allowance in a more expensive area, but you want to make sure you’ve got at least you know more than 50% of your your class time in person.

Amy:

Really good points. So how about the books and move allowances that you mentioned earlier?

Mike:

So VA pays up to $1000 or pays $8000 a year stipend for books and and other expenses, and the one time move rate is for $500. Like I said, it doesn’t apply to very many it’s it’s if you have fewer than six people per capita in your. 20 You can potentially qualify, and then there’s some additional things about whether you have to fly to the school or you know you’re able to drive so less, less common. But if you, you know, if you live in a rural area, you know it’s something to something to look into.

Amy:

Now. When we talk about how long these benefits last, the VA allocates 36 months of benefits. Assuming that you served at least 1095 days or 36 months on active duty. If you if you serve less than that, then you might be eligible for a percentage of benefits. Now back to the 36 months, that’s not, you know, that sounds like three years, right? Three years for a degree. But just like other ways. That VA math is different. VA pays benefits based on days and months. So most students go to school for two semesters a year, which is about eight or nine months, so that ends up allowing you to get a four year degree with a 36 month benefit. Does that make sense, Mike?

Mike:

It does, yeah. Like you said, more VA math. Like the the disability benefits, but it actually works out, you know a. Little. Better potentially for students because a lot of the times this semester is is somewhat less than. Uh, you know. Using a full nine months a year, you know you may use like 8 1/2 months, so you may end up with a little bit left over even when getting a four year degree and as long as you have even a day left. If you start that semester, VA actually covers that whole semester, so it can be a a good deal because you can squeeze out a little more either or. Or. Another child or for somebody to, you know, continue and maybe go to to grade. Yeah. We’ll talk more about that next week when we talk about actually using the GI Bill and how the, you know, specific numbers of of months and things break down. But one thing we need to hit is the amount of time you have to use it. So if you service ended before January 1st, 2013. You have 15 years to use your benefit. If your service ended after January 4 or on or after January 1st, 2013, your benefits don’t expire, so you can, you know, be 75 year old freshman, you know, going back to to get your degree and and yours use this. Well. One of the other amazing pieces of the post 911 GI Bill that’s you know new that we kind of alluded to is that it can be transferred both to spouses and children as long as they’re in deers. Is is one of your defendants? You can you can make that transfer. There are some. Requirements to make the transfer you know how long you’ve served and and we’ll get into that. So you know it’s fantastic because a lot of times service members that stay a long time end up the the, the military actually pays for degrees as as they go along. So they may not have A use for it. So this was seeing as kind of a key retention tool to helping to keep folks in longer. And just give them that benefit as. You know something they can they can use for their family.

Amy:

And it is a really great benefit. I’m using it right now for my daughter and soon my son and I know. You’re getting ready to. Use it soon as your daughter heads to school in the fall. Now there are some requirements for transferring the GI bill to your spouse or child, and the most important thing to realize. Is that DoD? So, so GI Bill is a VA benefit, but dud determines who can transfer the benefits and what the requirements are. And this is because transfers are intended to be a retention. Tool so they. They they come with some requirements and here are the requirements. So you have to be on active duty or in the selected reserve. And you had to have completed at least six years of service on the date your request is approved and you agree to add four more years of service and the person getting benefits is already enrolled in DEERS. So the defense enrollment Eligibility reporting system. Now there’s a caveat. If you received a Purple Heart, you don’t have to meet the service requirement, but you need to request your transfer. Request to transfer your benefits while you’re still on active duty.

Mike:

Yeah. So basically, you know you’re committing to at least 10 years of service in the military to, you know, fully get this this benefit. Now, the transfer doesn’t have to happen exactly at six years. If you’re still kind of on the fence of whether you’re going to stay in and you know, you get to the. 10 or even 12 year point and decide you know. We’re going to make it a career. I’m going to stay the 20. You can initiate the transfer there, but that’s when that four years additional active duty service commitment would would kick in. So you know it’s it. It doesn’t have to be right away. Now if you know. Hey this is something I want to use and I’ll I’ll do at least 10 years. Yeah. Start it right at the six year point.

Amy:

Good point and I’ll just I’ll point out that you know, don’t wait. So once you get to your six years, if you’re still on the fence, you can, you can certainly take your time and think about it, but don’t forget about it and and then the other thing is that you know, at least in years past, if you’ve made the transfer and. Then you choose to. Get out. They just make you transfer. Back and then once you’re transferred back, then they’ll approve your separation paperwork so you can get out. That may have changed. So double check on that. But Mike, when can beneficiaries use the benefits?

Mike:

So as soon as you you transfer them. You know, and like the military benefits, if you’ve. Separated before January 1st, 2013, they have the same 15 years to use them. If you’ve separated after. They never expire. The spouses would never expire for. Children, again, the Member must have served that full 10 years and or and or gotten through that service commitment before the children can start using them, they can. Use the benefits whether you’re on active duty or after you’re separated. And their requirements are really based on age. They can’t use the benefits unless they’ve gotten either a high school diploma or turned at least 18. And they must use the transfer GI belt benefits before they turn 26 years old. So it’s not, you know, we talked a little bit, maybe they got a little bit left over. And they want to go to grad school. You got to keep that in mind. That that clock is ticking, and they they need to do it before they turn 26. Ah. So, Amy, can you talk a little bit about some other things that we should think about when transferring benefits and, you know, can you change it? Is it locked in as soon as you make that allotment and how all that works?

Amy:

Sure. So the bottom line is you have control over the benefits until they’re used you, you’re able to make transfers through the Mill Connect website while you’re on active duty. And after you’re separated from active duty and benefits are transferred by month. So. You’ve got 36 months.

Speaker

So.

Amy:

Best practice has been that you transfer at least one month to anyone who might use them in the future, so you give a month to your spouse and a month to each of your children as an example. So that’s long been the best practice and you know for a while if the service member died, no additional benefits could be transferred after they passed away. So if they’d only transferred one month to each child and then something happened, that’s all the beneficiary would get. This has since been fixed so beneficiaries can reallocate the benefit even if the service member. But all beneficiaries that you want to be able to use the GI some of your GI bill must be given at least a month while the service members on active duty for them to be able to use. The. Benefit. So if you separate from active duty and then you have another child. After you separate, they will not be able to have benefits transferred to them. And and same if you don’t transfer one month to one of your children for whatever reason before you leave active duty, they won’t ever be able to have benefits transferred to them.

Mike:

Good info. Yeah. You know, super flexible. Again, if you give to the kids and then they they decide, yeah, they’re not going to, you know, they’re going to unless and and not go to college. You know it’s it’s flexible. You can pull it back to yourself or your spouse so. Awesome. Awesome. Opportunities there, Amy, anything we kind of missed on the basics of the GI Bill and and you know the transfer stuff and anything else that we need to hit is kind of the the primer before we talk about, you know, how do you, how do you actually go about? Using it and what are kind of the breath best practices in in those areas?

Amy:

You know, I think we covered the the basics pretty well and I’m looking forward to getting into the meat and potatoes of how to use the GI Bill to Max benefit for families.

Mike:

Yeah. You know, a lot of lot of good planning opportunities around that. So yeah, I’m I’m looking forward to talking about that in our next episode also. So well it was great to chat with you today about the GI Bill and and give people some. Basics and a little bit of history of. How the GI Bill came about, but yeah, I look forward to. Talking with you next time.

Amy:

Sounds good. Mike, talk to you again soon.