Post 9/11 GI Bill Upcoming Financial Changes

With the passage of GI Bill 2.0 and its implementation starting in August, three major financial changes will happen without further legislative intervention:

  • Elimination of interval pay
  • Prorated housing allowance
  • $17,500 cap for students paying out-of-state tuition or attending a private school.

Interval Pay Elimination

Since the Post 9/11 GI Bill started on August 1, 2009, students automatically received interval or break pay for the period of time between terms, such as semesters or quarters. As long as the break was shorter than the term and less than 56 days, the student’s housing allowance continued on.

The downside to break pay was that many students did not know it also used up entitlement and all they got for it was the housing allowance. If that same entitlement was used during a term, it would have paid for tuition, fees, housing allowance and the book stipend. But, many were aware it used up entitlement, but chose to have the steady income instead. Still others did not know they had to notify the VA if they did not want break pay. Starting with the fall term, break pay is gone, so those who depended upon it should start making other financial arrangements to carry them through the school breaks when they will no longer receive break pay.

Prorated Housing Allowance

Before the passage of the GI Bill 2.0, a student using the Post 9/11 GI Bill, and taking 51% of the number of credits their school considered full-time, received the same housing allowance as a student taking a full-time credit load. As long as a student was considered a greater-than-half-time student, s/he received the full housing allowance.

Starting this fall, students will receive a housing allowance prorated according to how many credits they are taking. For example, if a student is taking ¾ of a full-time credit load, s/he will get ¾ of the full housing allowance. This means many students attending less than full-time will be getting considerably less money in their housing allowance than in the past. Somehow, they will have to make up the difference, if they are to maintain their current student lifestyle.

$17,500 Yearly Tuition Cap

The intent of the $17,500 cap, which goes into effect on August 1st, was to level out the inequity among what the VA was paying in tuition for students attending private schools or paying out-state tuition rates. It ranged from a low of $7,000 in Arkansas to a high of $47,000 in Texas. On average, the $17,500 cap will end up being about half of what they were receiving in the past. This will result in a serious financial deficit and one where students finding themselves in this situation will have to be prepared when they start back at school for the fall term.

The outcry from the 30,000 students that would be affected by this change said the cap would cause them severe financial hardship; had they known the funding structure would have changed midway through their degree program, they would have chosen a cheaper school or attended one in their home state thereby avoiding having to pay out-state tuition.

House Veterans Affairs Chairman Rep. Jeff Miller (R-FL) heard their outcry and introduced legislation that would grandfather students currently attending programs by keeping their funding at the 2011 level until they finish their current program. Because of Congress’ pay-as-you-go system, this additional $50 million cost was going to be funded by freezing the Post 9/11 GI Bill housing allowance increases for the next two years.

The outcry from students who would be affected by the freeze, which was significantly greater and louder than the 30,000 over the funding cap, prompted the House to change the bill payer of the passed bill to be veterans that will have to pay increased costs for additional VA house loans beyond their first loan.

Keith Wilson, director of education service for the Veterans Benefits Administration, said changes this close to the start of the fall term would most likely force VA claim workers to go back to manual processing of GI Bill payouts, thus creating a situation similar to what we saw in 2009, causing massive delays and confusion when the Post 9/11 GI Bill first started. In a statement to the Stars and Stripes newspaper, he said, “This will negatively impact our ability to deliver timely benefits during the crucial fall enrollment period.” While the legislation passed the House, the Senate has failed to bring it to a vote yet. Hang on students, because it is going to be a rough financial ride (again)!

If the grandfather legislation does not pass, students currently at the 100% Post 9/11 GI Bill tier, will be able to offset their additional costs by using the Yellow Ribbon Program, provided their school has a Yellow Ribbon Agreement with the VA and their program is included in the school’s VA agreement. Those not covered by the Yellow Ribbon Program will have to bear the additional costs or change to a cheaper school in their home state. The clock is ticking and if the Senate fails to pass the bill, the $17,500 cap will take effect on August 1st.

On the positive side, starting October 1st, full-time online-only students can receive 50% of what traditional students get in a housing allowance. This amounts to $673.50 per month. While it still isn’t equitable, it is more than what they have received in the past, which was nothing.

I don’t like to keep harping on these changes, but my fear is many students are not going to be prepared for the additional financial obligation which they may incur starting with the fall term. There are still a couple of month’s time in which additional funds can be put aside in preparation for the upcoming financial shock. Don’t delay – prepare now!


Photo thanks to Adam Procter under creative common license on Flickr.

7 thoughts on “Post 9/11 GI Bill Upcoming Financial Changes”

  1. I have 30 years in the National Guard, 23 Active Duty Title 32 AGR, 2007-2008 OEF Veteran and my question is why do I only receive 60% of Tuition/Housing/Books,when other soldiers on Title 10 with less time receive more. I thought when the bill past earlier this year changed this. I just received in the mail that I was still going receive 60%. Can you elaborate on why this is? Thank you.

    MSG Gene Porter

  2. Gene,
    Prior to today (Aug 1st, 2011) I have no idea why you were only receiving 60% of your housing.

    After today, when this bill becomes effective, this is the situation about why you will continue to receive 60%.
    This is most likely due to how many credit hours you are taking. The change they have made pays based on the “rate of pursuit.” So they deem that however many credits you are taking is considered 60% of full time.

    That would also explain why these other soldiers are receiving 100% assistance. They are likely attending more classes.

    While it may vary between schools, “full time” is often 12 credit hours or more. Hope this explains things.

  3. xmilitary, I completely agree!!!!!! I have a petition going that I started in regards to the Break Pay. I think it’s bull that this up and coming semester, (Spring 2012) starts mid January and the Fall 2011 Semester ends mid december… Three week break in between semesters, yet our pay will be affected for TWO months!!! (1 Jan, and 1 Feb) Complete Bull****!!!!!

  4. I agree with you Christopher! However the reality of it is the Post 9/11 GI Bill changes had to result in zero additional costs and break pay was one of the consessions made. The other reduction that came about is calculating the amount of the housing allowance based on the number of credits taken in addition to the school zip code.

    One of the gains was authorizing a 50% housing allowance for online-only students.

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