The original Government Issue Bill (GI Bill) of 1944 helped WWII veterans return to civilian life by providing a range of benefits, including academic and vocational funding. It was so successful that similar measures were adopted for subsequent veterans. The most recent of these is the Post-9/11 GI Bill, which includes up to 36 months of educational benefits to eligible service personnel and, uniquely, to your dependents as long as you plan ahead.
This article will consider current provisions of the Post-9/11 GI Bill, plus recent legislative updates, as they relate to your broader wealth planning.
Maximize Benefits of the Post-9/11 GI Bill
With careful planning, the Post-9/11 GI Bill offers real value for you and your family. However, eligibility requirements are complex, and not all benefits are transferable. It’s vital to coordinate critical timing and entitlement considerations into your long-term financial planning to maximize benefits for you and your loved ones.
What Kinds of Programs Does the Post-9/11 GI Bill Cover?
The bill funds up to 36 months of study at colleges, universities, trade schools, and some on-the-job training programs and apprenticeships. It can also cover licensing and certification fees. You must fulfill certain service requirements to be eligible.
How Much Tuition Do I Qualify for?
The amount of tuition expenses you qualify for depends upon several factors, including:
- Service record on or after September 11, 2001
- State of residence
- Where you choose to study
- Whether your study is full-time or part-time
Up to 100% of in-state tuition costs and fees at a public college may be paid. For private institutions, tuition expenses are nationally capped. However, under the Yellow Ribbon Program, a private school may contribute a portion of any unmet tuition costs. This amount is then matched by the VA, up to the total tuition cost.
What Other Costs Are Covered by the Bill?
You may also be eligible for:
- Help with textbooks and study supplies: Depending on how many credits you study, you may receive up to $1,000 annually, paid in advance as a lump sum.
- A monthly housing allowance: Housing allowances are calculated using factors including your active-duty record since September 11, 2001, course load and where you choose to study. Even if your studies are online, you may still be eligible for a housing stipend. Housing allowances will decrease under new provisions (see below).
Transferring Your Eligible Benefits to Family Members
A unique feature of the Post-9/11 GI Bill is the ability to transfer any or all of your educational benefits to your spouse or children. You can transfer your entire benefit to a single family member or divide it among dependents. However, not all options are transferable, and specific Department of Defense eligibility criteria apply, including:
- You must have served at least six years of active duty.
- You must commit to an additional four years of service.
- You must apply to transfer your benefits while serving.
Benefits for Spouses
Your spouse won’t qualify for monthly housing payments or book/supply stipends while you’re serving active duty. A divorce doesn’t impact spousal eligibility under the bill, although you can re-assign your benefits.
Benefits for Children
Children must be at least 18 years old or have earned a high school diploma or equivalent, and be under age 26. Marriage doesn’t impact their eligibility under the bill. You must have completed a total of 10 years of service before your child can use any transferred benefits.
The Forever GI Bill Signed Into Law
In August, 2017, the president signed into law updates to the Post-9/11 GI Bill, known as the Harry W. Colmery Veterans Educational Assistance Act of 2017, or more commonly, the Forever GI Bill:
- From August 2018, Purple Heart recipients will be eligible for full student aid, regardless of length of service.
- If you left service after January 1, 2013, the 15-year time limit to utilize your educational benefits is abolished.
- Beginning August 2020, new VA eligibility calculations will offer increased benefits, relative to the same service period.
- The Yellow Ribbon Program is expanded to cover surviving spouses and children (as of August 2018), and active-duty service members (effective August 2022).
- Surviving spouses and children will receive increased stipends, but for a shorter period of time (36 months, down from 45 months).
- Certain college-level STEM courses may carry additional funding opportunities on a first-come, first-served basis.
- Beginning August 2018, eligibility is expanded for members of the National Guard and Reserve who have been activated since September 11, 2001.
- Veterans who lost credits at failed educational institutions will be able to reclaim and reuse those benefits.
- To help fund the expanded provisions, housing stipends will decrease from January 1, 2018.
(For more from this author, see: Year-End Tax Planning Tips for 2017.)
Disclosure: The information contained herein is obtained from sources believed to be reliable, but its accuracy or completeness is not guaranteed. This article is for informational purposes only. The views expressed are those of SageVest Wealth Management and should not be construed as investment advice. All expressions of opinions are subject to change and past performance is no guarantee of future results. SageVest Wealth Management does not render legal, tax, or accounting services. Accordingly, you, your attorneys and your accountants are ultimately responsible for determining the legal, tax and accounting consequences of any suggestions offered herein.
In accordance with IRS CIRCULAR 230, we inform you that any U.S. Federal tax advice contained in this communication (including attachments) is not intended or written to be used, and cannot be used by a taxpayer, for the purpose of (a) avoiding penalties under the Internal Revenue Code or that may otherwise be imposed on the taxpayer by any government taxing authority or agency, or (b) promoting, marketing or recommending to another party any transaction or matter addressed herein.
The provision of a link to any third party website does not mean that SageVest endorses that website. If you visit any website via a link provided here, you do so at your own risk and indemnify SageVest from any loss or damage incurred.