Servicemen's Readjustment Act
Definition of 'Servicemen's Readjustment Act'
A United States law that provided benefits to military veterans. Benefits provided by the Servicemen’s Readjustment Act included loans and mortgages at low interest rates, unemployment compensation, and more commonly known, payments to cover college tuition and board. These benefits were available to any veteran, male or female, who had served during WWII, provided he or she served for at least 90 days and was not dishonorably discharged. Combat service was not a requirement. The law was signed on June 22, 1944.
Investopedia explains 'Servicemen's Readjustment Act'
During WWII, the U.S. federal government sought a way to reintegrate veterans when they returned from service. The U.S. Department of Labor estimated upwards of 15 million veterans would be coming home, and without a program in place, they could overwhelm the labor market. Memories of the poor treatment of veterans following WWI was relatively fresh in politicians’ minds, as well as protests like the Bonus March and the creation of shanty towns (dubbed “Hoovervilles” after President Herbert Hoover).
The effects of the law were considered positive. Low-interest mortgages helped fuel a housing boom, with many veterans moving out of urban areas to suburban communities. By the time the law expired more than four million home loans had been granted. Nearly half of all veterans used the tuition benefit to go to college or to attend other training programs, with nearly $14.5 billion in funding dispersed.
While the law expired in 1956, the Servicemen’s Readjustment Act’s nickname, the G.I. Bill, has been used to describe other veterans’ benefit programs in subsequent years.