Understanding the Value of the Post 9/11 GI Bill
I’m a dad who knows how to manage debt and I’ve always seen education as an investment. This was true even before I became a father. After leaving the Army, I realized that with only two years of service, I would only get 70% of the maximum Post 9/11 GI Bill benefits. So, I did some research to find out how to make the most of them. I wanted to know how much my GI Bill was worth, but I couldn’t find a clear answer anywhere. To find an answer, I looked at different factors like tuition rates, BAH rates, and state policies. Ultimately, I wanted to get a degree without taking any student loans. I finally chose George Mason University and achieved my goal. Now the Post 9/11 GI Bill is even more valuable because of a new law that gives most veterans in-state tuition. But I still haven’t seen a good estimate of how much these benefits are worth for a veteran.
How to Compare the Value of Different GI Bills
The value of the Montgomery (old) GI Bill is easy to find out. The VA publishes how much it pays each month. You can use it for 36 months, so the total value is 36 times the monthly payment of $2150, which is about $77,000. But the value of the Post 9/11 GI Bill is harder to estimate. It depends on how long you served (TIS) and where you go to school. The longer you serve, the more benefits you get, up to a maximum at three years of TIS. It covers 50-100% of your tuition and fees based on TIS and gives you a housing allowance that changes with the zip code of your school. Tuition and living costs are very different across US schools, so the benefits can vary a lot too. To get an idea of the range of values, I looked at data from the VA’s comparison tool. I found a cheap school in a low-cost area, an expensive school in a high-cost area, and two schools in between.
*All values assume 100% benefits unless otherwise stated
When the Post 9/11 GI Bill Has the Lowest Value: A Case Study of UFT
The Post 9/11 GI Bill has the lowest value when tuition and housing are cheap and the veteran doesn’t benefit from in-state tuition laws. This is because: First, a veteran who goes to a public school in their own state doesn’t save any extra money from the GI Bill for in-state tuition rates. Second, if the school is also in a low-cost area, the veteran gets less money for housing since the allowance depends on the zip code of the school.
For example, look at the University of Florida (UF). It’s a top state school, ranks 25th in Forbes’ list of US colleges and universities and is well-known as a great school. The in-state tuition is only $6,400 a year, which is a good deal for state residents, but not a big difference for a veteran using the GI Bill. Also, the housing allowance is about $1,500 a month, which is lower than most other places I’ve seen. The low tuition and housing costs make the school affordable with or without the GI Bill.
Don’t get me wrong, I’m not saying a veteran shouldn’t go to UF. It’s an awesome school and with 100% benefits, you won’t pay any tuition and you’ll have enough money for housing in the area. The Post 9/11 GI Bill gives you $82,000 in benefits over four years, which is more than the Montgomery GI Bill and almost covers the $87,000 that the school says you need for everything else like food, travel and personal items.
Low End Value: $82,000
How to Maximize the Value of the GI Bill: Go for the Most Expensive Schools
The GI Bill has the highest value when you use it for a pricey private school in an expensive area like Palo Alto. Stanford is one example, with very high tuition and housing costs. The Post 9/11 GI Bill usually only pays up to $25,000 a year for private schools and less if you have less than 100% benefits. But if you have 100% benefits, you can get more money from the Yellow Ribbon Program. This is a scholarship program where the VA matches what the school gives you to cover the extra costs above $25,000. If you have three years of service, you can get a full ride to any school that offers this program, as long as you get admitted.
You can get even more value from the GI Bill if you save some benefits for a graduate degree. For example, let’s consider a hypothetical veteran named Nikki. Nikki takes 60 credits at a community college while in the military. She gets out and transfers to Stanford as a junior. After graduating, she works in tech but wants to switch to investment banking. She gets into Columbia for a two-year MBA program and uses her remaining GI Bill benefits to pay for it.
With this strategy, the Post 9/11 GI Bill and the Yellow Ribbon Program give you over $400,000 in benefits for tuition, housing and books over four years. It may not be worth it to pay full price for a private school when you can go to a public school for much less, but in this case you don’t pay anything. So why not go for it?
High End Value: $400,000
How the Value of the Post 9/11 GI Bill Varies Among Public Schools
Most veterans will go to schools that are not particularly cheap or too expensive, but somewhere in between. Most students choose public schools over private ones with public school students composing 74% of all college students. But even among public schools, the benefits can vary a lot. They can range from $80,000 for a Florida resident who goes to UF to $300,000 for a veteran who moves to California to go to UC Berkeley. Some examples of middle-range schools are George Mason University and the University of Pittsburgh (Pitt). George Mason has low in-state tuition but high housing costs because it’s near DC. Pitt has high in-state tuition but low housing costs because it’s in Pittsburgh.
For George Mason, the GI Bill gives $148,000 in benefits for a Virginia resident who stays in-state. While the city of Pittsburgh is far cheaper than the DC metro area, the higher cost of tuition almost exactly covers the difference in cost of living. This results in $151,000 in benefits at Pitt for a Pennsylvania resident who stays in-state. For veterans who are not from Virginia or Pennsylvania, the GI Bill benefits go up to $245,000 for George Mason and $208,000 for Pitt. Based on these examples, the average Post 9/11 GI Bill is worth about $150,000-$250,000 depending on where you study and if you get in-state tuition rates as a veteran.
Average Value: $150,000-250,000
Other Factors
The benefits I’ve mentioned so far are the ones you can measure in dollars: tuition, housing and books. But there are some other benefits that are harder to put a price on. For example, the many state schools that offer you in-state tuition and a scholarship. Here are some of these benefits that I think are important.
- More choices and freedom for your education– You might not be able to afford going to school in another state, in a big city, or at a private school. You might only have a few choices in your own state, and none of them might be your dream school. But with the Post 9/11 GI Bill, you have a huge advantage. You can get a full scholarship at ANY public school that accepts you. If you also have the Yellow Ribbon Program, you can even go to some private schools for free. That’s an amazing feeling of freedom that you can’t buy.
- Helps achieve financial stability and independence – With 100% benefits, the Post 9/11 GI Bill can pay for almost everything you need for school. You can graduate without any debt if you plan well and work hard. Even with 70% benefits, I was able to graduate debt-free by being smart. I got an athletic scholarship, applied for FAFSA to get Pell Grants, lived within my housing allowance, and worked part-time. I actually saved more money than I spent and bought a house less than two years after graduating. With a good credit score, a steady income, and a debt-free degree, you’ll be ready to buy a house sooner than most graduates.
- Pick your dream school without debt– Some students have to choose between their top choice school at full price or a lower choice school with a scholarship. They have to balance the cost of debt with the quality of education. But with the GI Bill, you don’t have this problem. The benefits are the same for every school and let you choose the best education for you without worrying about the cost.
In Summary
The value of the GI Bill depends on many factors, such as where you go to school, how long you served, and if you have the Yellow Ribbon Program. The GI Bill can be worth as little as $82,000 by going to a cheap public school in your own state. Or the GI Bill can be worth as much as $400,000 by going to an expensive private school in another state. You can also save some benefits for a graduate degree and get more value that way. On average the Post 9/11 GI Bill will be worth about $150,000-250,000 but its additional benefits make it even more valuable. The GI Bill gives you more choices and freedom for your education, it helps you achieve financial stability and independence, and lets you pick your dream school without debt.
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