On June 30 of this past summer, the Post-9/11 Veterans Educational Assistance Act, more commonly known as the Post-9/11 GI Bill, turned three years old. Benefits under the new law began being paid on Aug. 1, 2009. Since then, more than a half-million veterans have received benefits under the new law.

The Post-9/11 GI Bill has been a blessing for service members and veterans seeking education and training opportunities. The law’s benefits are far more generous than its previous incarnation, the Montgomery GI Bill, which covered veterans beginning in 1984. Even in the current budget climate, most Americans agree that better benefits are due to the members of our all-volunteer force who have served in Iraq and Afghanistan – and who have served as never before, in multiple tours that have, in many cases, spanned a decade.

When the first iteration of the Post-9/11 GI Bill was passed in the summer of 2008, it was widely believed that there was, at long last, a veterans’ education benefits bill to match the original GI Bill, which lent aid to more than half the nation’s 15 million World War II veterans and is widely considered to have played a key role in launching an era of optimism and prosperity. The Post-9/11 GI Bill authorized the Department of Veterans Affairs to pay for up to 100 percent of a veteran’s tuition and required fees at a state college or university, depending on the veteran’s length of service.

Subject to some restrictions, the 2008 law also included allowances for housing and books. In certain cases, the benefit could be transferred to the veteran’s spouse or other dependent. Private or graduate schools with tuition higher than the in-state maximum were given the option to participate in the Yellow Ribbon Program, designed to help veteran students who want to attend higher-priced private and public universities. Under the program, the school or institution may provide up to half the amount of the total tuition cost, which will then be matched by the VA.

Fault Lines

The early months of implementing the Post-9/11 GI Bill revealed that, generous as it was, it had some problems. It was difficult – unnecessarily difficult, many critics charged – to process claims, which were calculated on a state-by-state basis. The benefit equaled 100 percent of the tuition and fees at the most expensive public school in the given state, which provided a moving target for processors. Combined with some technical problems, VA’s troubles created a backlog of claims in the fall of 2009.

The law also had some unintended consequences that left certain categories of veterans uncovered. It seemed too narrowly focused on academic, degree-granting institutions, neglecting many opportunities for veterans to pursue vocational training, apprenticeships, or on-the-job training. It failed to account for the prevalence of distance-learning opportunities in the contemporary educational system, neglecting to offer housing assistance to full-time distance learners at schools such as the University of Phoenix or the American Military University. It forced disabled veterans to choose between their Vocational Rehabilitation and Employment (VR&E) benefit and their GI Bill benefit, which have different coverages for tuition and housing. And it left out entirely a significant number of National Guard and Reserve service members – those who served full-time stateside for the purpose of organizing, recruiting, training, instructing, or administering Reserve components, or those who served in support of contingency operations or in response to a national emergency.

It’s important to remember that when it was passed in 1944, the original GI Bill wasn’t perfect, either; it was amended in later legislative sessions to expand and refine benefits. “The folks that worked on this first Post-9/11 GI Bill,” said Tim Ebree, legislative associate for the nonprofit Iraq and Afghanistan Veterans of America (IAVA), “had a huge task, trying to figure out so much information – so many things have changed since that first GI Bill passed. Many of these people were learning for the first time, but they got a great bill passed. Some of the consequences were things that people didn’t foresee. So the veterans service organizations, IAVA and other groups, were saying: ‘Hey, guys, great benefits – we just need to tweak a few things and make it phenomenal.”

GI Bill 2.0: The Tweaks

In the spring of 2010, a second bill – the Post-9/11 Veterans Education Assistance Improvements Act – was introduced by Hawaii Sen. Daniel K. Akaka. More commonly known as the GI Bill 2.0, the law addressed these and other shortcomings in the original Post-9/11 GI Bill. Passed during the final hours of the last legislative session of 2010, 2.0 was signed into law by President Barack Obama on Jan. 4, 2011.

Most of the provisions of the Post-9/11 GI Bill 2.0 were effective Aug. 1, 2011, including:

• expansion of GI Bill eligibility to National Guard members who serve on active duty stateside in a number of circumstances, including emergency response or training Reserve components.
• expansion of transfer entitlements – the ability to transfer benefits to a dependent – to include qualified members of the commissioned corps of the Public Health Service (PHS) and the National Oceanic and Atmospheric Administration (NOAA).
• elimination of the confusing state-by-state “undergraduate cap” method of calculating benefits, establishing instead a $17,500 annual tuition and fee cap for private institutions. (The Yellow Ribbon Program still serves to cover costs for out-of-state fees and costs above this cap.) Students attending public schools will still have tuition and fees completely covered, at the rate applicable to in-state residents.
• coverage for a greater number of licensure, certification, or placement tests such as the SAT, GRE, LSAT, and CLEP.
• resolution of the apparent conflict between GI Bill and the VA’s Vocational Rehabilitation and Employment (VR&E) program benefits. One of the most confusing difficulties of the Post-9/11 GI Bill involved the difference, for wounded veterans, between the Post-9/11 GI Bill housing stipend and the subsistence allowance of the VR&E program: Under the VA’s disability rating system, wounded warriors are assigned a subsistence rate that’s often lower than the housing stipend for which they’re eligible under the Post-9/11 GI Bill, explained Col. Bob Norton (USA-Ret.), deputy director of Government Relations for the Military Officers Association of America.

“If you are a disabled veteran coming back from Iraq or Afghanistan and you are rated by the VA at 20 percent or greater – in other words you have a disability that came as a result of your military service since 9/11 – you can get counseling services, testing, job placement, and use your GI Bill underneath that Voc-Rehab umbrella,” Norton said. “But your cost of living stipend was way less than the Post-9/11 GI Bill’s. So now those folks who want to go to college and use the VR&E can choose, if they wish, to take the full national average for housing, which in many cases more than doubles what they were getting under VR&E.”

2.0 provisions that went into effect on Oct. 1, 2011, include:

• expansion of the annual book stipend eligibility – up to $1,000 for textbooks – to include active-duty service members and their spouses.
• a living/housing allowance for service members who are full-time online or “distance learners,” of up to half the national average Basic Allowance for Housing (BAH) for 2011, a total of $673.50 per month. Norton thinks this allowance for distance learners – a growing segment of veteran students – is one of the most significant provisions of the Improvements Act. “If you are cranking out online courses in your basement and you don’t go to a physical campus, you can still get $673.50 to help you make ends meet, for whatever you need to do to continue your program,” he said. “This is a great provision for folks who had been excluded before.”
• expansion of coverage to non-degree-granting programs. The VA will pay the same benefit as at degree-granting colleges and universities: the net cost for in-state tuition and fees at public programs; for private and foreign programs, the actual net cost or $17,500, whichever is less. The VA will also provide up to $83 per month for books and supplies.
• expansion of coverage to on-the-job training or apprenticeship programs. VA will pay a monthly benefit based on the amount of time spent in the program, and up to $83 per month for books and supplies.
• expansion to include flight training programs. VA will pay the actual net costs of the program annually or $10,000, whichever is less.
• the online or correspondence training benefit for tuition and fees will be capped at $8,500 annually.

Trade-offs

Though widely supported, the bill was introduced at a time of intense budget pressure. Congress’ ability to pass the law was due, in part, to the fact that it is projected to save $730 million over the next decade. In order to expand coverage to more veterans, some cost-saving trade-offs were necessary, including:

• Prorated housing payments: The monthly housing stipend will now be prorated based on a student’s “rate of pursuit.” This provision, Norton explained, was added to eliminate a deal that was considered a bit too sweet for students who were previously considered “full-time” simply because they took a shade over half of what the VA had designated as a full course load: 12 credits. “It used to be that if you were enrolled for seven credits at a college, you would get the full monthly housing allowance,” Norton said. “So you’d get about $2,400 a month, for example, to take seven credits at San Francisco State – a pretty darn good deal. The government has said: ‘Not really what we intended, not really fair.’” Under the new law, the student in Norton’s example would receive about 58 percent of the basic housing allowance. Prorated payments are probably the biggest money-saver in the Improvements Act – which means a significant number of students will see their housing allowances reduced under the new law, which, while simplifying the formula for tuition payments, makes the calculation of housing/living allowances a bit more complicated for the VA. Three factors – rate of pursuit, locality, and the student’s eligibility tier (the amount of creditable active-duty service) – will now be used to calculate each student’s housing payment.
•  The housing stipend will not apply during mandatory school breaks – when school is not in session, students are assumed capable of earning their rent.
• The $17,500 cap on tuition and fees will, in a handful of states, not cover the entire cost of education at certain institutions – but this doesn’t necessarily mean students will be left out in the cold. The provision is intended not only to save government money, but to urge participation in the VA’s Yellow Ribbon Program, which will pay up to half the total amount of fees and tuition if participating institutions agree to pay the other half.

Still, this provision, more than any other, is claimed to be unfair by some current benefit recipients. In seven U.S. states, Norton pointed out, “if you are already enrolled as a nonpublic school student – in other words you’re in a private college or university – under the change that was passed in January, you had a de facto cut in your benefits because of the new cap.”

Overall, Norton considers these trade-offs to be well worth the outcome. Three years ago, he pointed out, few veterans would have contemplated attending private schools at all; most were simply out of reach. “When you consider all the good of expanding the number of veterans eligible now to get all kinds of GI Bill benefits under these fixes,” he said, “it far outweighs the perceived or real cuts, both in terms of the number of people affected and in terms of the quality of the benefit overall.”

A GI Bill 3.0?

Given the budget climate, it’s unlikely that a major expansion of benefits will make its way through Congress anytime soon, though a bill called the Restoring GI Bill Fairness Act of 2011 cleared Congress in July 2011. Essentially, the bill proposes to eliminate the $17,500 cap for students who were enrolled in a private school before the GI Bill 2.0 became law. It’s a minor provision, expressed in an unusually short (four-page) piece of legislation, but restoring those benefits to an estimated 30,000 veteran students will cost about $50 million that has to come from somewhere – in this case, by means of raising home loan origination fees on loans backed by the VA.

“Some folks objected to that on the Hill within committee,” Norton said. “They said: ‘Well, that’s not fair. You’re borrowing from one set of veterans to pay for another.’ … Would we have preferred another source of the funding? Absolutely. Would it happen in this environment? There’s only three ways you can do that: deficit spending, which ain’t going to happen; raising taxes, which ain’t going to happen; or table the bill. When you look across the board at the potential good that this bill does for the current generation of returning veterans – who down the road will be possibly seeking VA home loan assistance – right now they’re focused on job training and college, and that’s what they need moving forward. And this sort of evens out some of the lumps, if you will, that still remained in the 4 Jan. [2011] legislation.”

This article first appeared in The Year in Veterans Affairs & Military Medicine: 2011-2012 Edition.