How much is the Post 9/11 GI Bill worth?

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As a debt savvy dad I’ve always viewed an education as an investment even before I was a dad. When I left the Army I knew that I’d only qualify for 70% of the Post 9/11 GI Bill benefits so I researched how to get the most out of them. When I began researching I didn’t know exactly how much my GI Bill was worth and couldn’t seem to find an answer anywhere. I ultimately looked at the tuition rates, BAH rates, and state policies to determine where I could get a degree without needing any student loans. I ultimately found my way to George Mason University and accomplished my goal. Today the Post 9/11 GI Bill is even more valuable since Congress passed legislation which provides in-state tuition to most veterans using its benefits. Yet I still can’t haven’t seen a solid estimate of what a veteran can expect these benefits to be worth.

Why hasn’t someone already answered how much the GI Bill is worth?

Several sites already share how much the Montgomery (old) GI Bill is worth because it is easy to calculate. The VA publishes benefit rates that detail how much the benefit is worth each month. Since the benefits can be used for 36 months, the value calculation is 36 times the monthly benefit of $2150 or about $77,000. In contrast calculating the value of benefits for the Post 9/11 GI Bill is more uncertain. The benefits don’t accrue all at once, instead the benefits increase based on time in service (TIS) up to a maximum benefit at three years of TIS. Instead of a flat rate, it pays a anywhere from 50-100% of tuition and fees based on TIS and provides a housing allowance which varies depending on the zip code where the university is located. Tuition and cost of living both vary widely across US universities so it’s difficult to place an exact value on the benefits. However, I can find the range of values based on the most and leas expensive universities and then come up with an expected value. In order to increase the accuracy of my estimate I’ve pulled data from the VA’s comparison tool to find an inexpensive university in a low cost of living (LCOL) area, an expensive university in a high cost of living (HCOL) area, as well as two universities that fall somewhere in between.

Note: All values assume 100% benefits unless otherwise stated

LCOL and Low Tuition

The scenario where the Post 9/11 GI Bill offers the lowest value is when primary cost drivers including tuition and housing are least expensive and where the veteran receives no benefit from the laws which provide for in-state tuition. This is for two reasons: First, a veteran that decides to attend a public university in the state they already reside in doesn’t get any extra benefit from the GI Bill for in-state tuition rates since they are already a resident. Second, if the university is also located in a LCOL area then the veteran gets a lower monthly housing allowance since the allowance is based on the cost of living of the university’s zip code.

As an example, take the University of Florida (UF). It’s the flagship state university, ranks 25th in the latest Forbes ranking of US colleges and universities and is widely regarded as a great university. At $6,400 annually, the low cost of in-state tuition is a fantastic value for state residents, but represents a smaller savings for a veteran using the GI Bill. In addition, the housing benefits at just under $1,500/month is on the lower end of most housing allowances that I’ve found. The combination of very low tuition rates plus the relatively inexpensive local housing costs mean that the education is relatively affordable with or without the GI Bill.

As a reminder, I’m not saying a veteran shouldn’t go to school at UF. It’s a fantastic school and with 100% benefits, you’re tuition will be fully covered and you’ll still have a housing allowance which allows you to live comfortably in the area. The $82,000 in benefits that the Post 9/11 GI Bill provides over four years exceeds the value of the Montgomery GI Bill and almost covers the $87,000 that the school estimates as the full cost of attendance inclusive of food, personal items, travel and more.

Low End Value: $82,000

HCOL and High Tuition

The GI Bill is most valuable when used for an expensive private school in a high cost of living area such as Palo Alto. Located in the heart of Silicon Valley, Stanford fits the bill with sky high housing costs and tuition to match. The Post 9/11 GI Bill normally only covers up to about $25,000 in tuition costs annually for private schools and proportionally less when a veteran has less than 100% benefits. However, if you have 100% benefits then pricey private schools becomes much for affordable with the Yellow Ribbon Program. The Yellow Ribbon Program is a scholarship program where the VA matches a school’s contributions dollar for dollar to offset the amount above the maximum $25,000 that the VA will normally pay to a private school. A veteran with three years of qualifying service can, using Yellow Ribbon benefit, be eligible for a full ride to just about any dream school so long as they can get in.

Four years of benefits at Stanford represents $377,000 in value but there is a way to extract even more value from the GI Bill. By inexpensively earning your first two years of college credits, you can transfer into school as an academic junior and save the benefits for a more expensive graduate degree. Consider Nikki. Nikki takes 60 credits over three years at a community college while in the military. After she separates she is accepted to and enrolls at Stanford as a transfer student. After graduation Nikki starts her career in tech but decides to pivot her career into investment banking. To her delight she is accepted to Columbia where she will pursue a two year full time MBA program fully funded using her remaining two years of the GI Bill.

Using the example above, the Post 9/11 GI Bill in conjunction with the Yellow Ribbon Program will provide over $400,000 in tuition, housing, and book over four years. While It doesn’t make sense to pay sticker price for a private school education when a public school education can be had for far less, in this case the student doesn’t pay anything for the benefit. If someone else is paying for it, then go for it!

High End Value: $400,000

Mid-Range

The schools that most veterans will apply to or attend will fall somewhere in between these two extremes of $80,000-$400,000. Statistically, most students enroll in public rather than private universities. Still, even when narrowed to public universities, the variation in benefits is vast. The difference ranges from a low of around $80,000 for a Florida resident who attends UF to $300,000 in benefits for a veteran that moves to California to attend UC Berkeley. Somewhere in the middle are schools like George Mason University or the University of Pittsburgh (Pitt). George Mason has lower than average in-state tuition costs but is located in a more expensive area of the country half an hour outside DC. Pitt on the other hand is located in a LCOL city in Pittsburgh but has some of the highest in-state tuition rates.

For George Mason, the GI Bill provides $148,000 in benefits for the Virginia resident who remains in-state while Pitt provides $151,00 in benefits for someone who is already from Pennsylvania. For veterans not originally from Virginia or Pennsylvania the GI Bill benefits increase to $245,000 and $208,000 respectively. Using these more middle ground estimates, the typical Post 9/11 GI Bill is worth about $150,000-$250,000 depending on where you go to school and whether you would have received in-state tuition rates regardless of your veteran status

Mid-Range Value: $150,000-250,000

Other Factors

The tuition payments, housing, and book allowances account for the dollar value of the education benefits I’ve used but the estimates don’t include a few other factors that are more difficult to put a price tag on. Like, for example, the huge number of state schools to which you can apply to and receive in-state tuition and a scholarship for. Here are a few of these benefits that come to mind.

1. Endless Opportunities – Going to school out of state, in an expensive city, or to a private school might be cost prohibitive for a student without funding. When limited to in-state schools, an applicant might only have a few options to choose from, none of which is their dream school. In contrast to many applicants, veterans with the Post 9/11 GI Bill have a guarantee of a massive scholarship up to a full ride at ANY public school they can be admitted to. If you also qualify for the yellow ribbon program then your choices are as big as you can dream. That feeling of freedom is hard to put a price on.
2. Peace of mind – At 100% benefits, the Post 9/11 GI Bill can cover nearly the full cost of attendance . With some budgeting and a little bit of hustle you can easily graduate debt free. Even with 70% benefits, I was able to graduate with zero debt by finding ways to be savvy. I negotiated an athletic scholarship, applied for FAFSA to get Pell Grants, budgeted to live within the means of my housing allowance, and working through college to make some extra money. This extra income actually allowed me to graduate with more savings than I entered with and purchase a house less than 18 months after graduation. With a good credit score, solid income, and debt free degree, you’ll likely be well setup to purchase a house sooner than your fellow graduates.
3. Turn any acceptance into a full ride – Some students might need to choose between their top choice school at sticker price versus a second or third choice with a scholarship. They’ll need to weigh the value of the scholarship against the debt at their top choice. But with the GI Bill, this conundrum doesn’t exist. The benefits are equally applied to each university and allow the merits of the education to be weighed independently of the ability to afford the school.
4. The case for public schools – If you do not qualify for the Yellow Ribbon Program

Final Tally

The mid-range value of $150,000-$250,00 captures what might typically be the payoffs for a veteran using their education benefits, but splitting the difference would underestimate the options that the benefit provides. All factors considered, I’d place a value of the Post 9/11 GI Bill at about a quarter of a million dollars.

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