Ask Kim


Changes to the GI Bill

Kimberly Lankford

There's a new cap on tuition reimbursement but better benefits for veterans and National Guardsmen.



I understand that the Post 9/11 GI Bill has been modified. What are the rules under the new law?

In general, the rules remain the same as they have been since 2009, when the current bill was passed. But a new law passed in December makes a few key tweaks.

The biggest change is the maximum annual tuition reimbursement. In the past, the maximum payout varied based on the full cost of in-state tuition and fees at the most expensive public college in the state where you attend school. The GI Bill will continue to pay the full in-state tuition and fees for public colleges (whether you attend as an in-state or out-of-state student). But under the new rules, which take effect on August 1, 2011, the maximum benefit for tuition and fees will be capped at $17,500 per year for private colleges and foreign schools. Also, the housing allowance will be prorated for students who do not attend school full-time (in the past, anyone going to school at least half-time received the full housing allowance).

If you pay out-of-state tuition at a public college or go to a private college, your total costs may exceed the new limits, but you may still be able to fill in some of the gaps with the Yellow Ribbon program. More than 1,000 participating colleges agree to contribute a fixed amount above the GI Bill limit for a certain number of students, and the Department of Veterans Affairs matches the school’s contributions (see the VA’s Yellow Ribbon page for more information and a list of the number of scholarships and amounts at participating colleges).

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Another big change is in the eligibility requirements for members of the National Guard. When the Post 9/11 GI Bill was first passed, only overseas service counted toward GI Bill benefits for the National Guard. Many National Guardsmen were deployed to Iraq or Afghanistan for 18 or 21 months, but fell short of the 36-month service requirement to receive full benefits because their stateside service didn’t count, says Peter Duffy, deputy director of legislation for the National Guard Association of the United States. Under the new law, federally funded homeland-security missions, such as disaster response, protection of U.S. airspace and border security, also count toward eligibility, which could help expand GI Bill benefits for more than 131,000 members of the National Guard.

The new law also allows veterans -- whether active duty, reserves or National Guard -- to use their benefits not just at degree-granting colleges but to pay for vocational and trade schools and distance learning, starting October 1, 2011. This will be particularly helpful for Guardsmen who live in rural areas or are training for new careers, says Duffy. Plus, the new rules permit reimbursement of fees paid to take national exams used for admission to an institution of higher learning (such as the SAT, GMAT or LSAT).

The Veterans Administration’s newly updated GI Bill Web site is filled with information about eligibility and benefits, including a new benefits calculator. Also see the VA’s detailed list of changes to the law.

For more details about the GI Bill, see A Better GI Bill. And for more information about the rules for transferring your benefits to family members, which have changed very little, see Now the GI Bill Is for Families, Too.

Got a question? Ask Kim at askkim@kiplinger.com.



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