A Better GI Bill

Generous subsidies will fund the entire cost of a college education for a new generation.

By Kimberly Lankford, Contributing Editor

From Kiplinger's Personal Finance magazine, October 2009

Veterans and active-duty military members who have served since September 11, 2001, can now take advantage of expanded education benefits, thanks to the Post-9/11 GI Bill that took effect August 1. Benefits include a housing stipend and money for books and tutoring as well as tuition. The new program applies to anyone who served in the military, reserves or National Guard for at least 90 days since 9/11. Many service members can even transfer the benefits to their spouses or children.

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Expanded benefits. The new GI bill will pay up to the full cost of in-state tuition and fees at the most expensive public college in the state where you're attending school (see www.gibill.va.gov for a list by state). You can receive up to 36 months of benefits, which should be enough to cover a four-year undergraduate program at a college with a nine-month academic year.

If you're attending a private college, going to graduate school or paying out-of-state tuition at a public college, your benefits may not cover the entire bill. But you may qualify for some extra help. About 1,200 colleges have signed up for the Yellow Ribbon program to cover a big chunk of the unfunded costs. The colleges agree to contribute a fixed amount above the GI-bill limits for a certain number of students, and the Department of Veterans Affairs matches the school's contribution.

The amount of Yellow Ribbon funding varies widely by school and program. For example, Harvard Law School will provide $21,000 each in additional aid to up to 12 eligible students. Harvard Business School will provide $5,000 in additional aid to as many as 30 students, and Boston University will provide $7,800 to up to 20 students. To qualify, you must be eligible for the maximum GI-bill benefits and apply for the extra funds through the college. (For a list of the amounts by college, see the Yellow Ribbon Web page at www.gibill.va.gov.)

You can also receive a monthly housing stipend based on the basic allowance for housing for an E-5 rank with dependents. The amount depends on the college's zip code (see www.defensetravel.dod.mil/perdiem/bah.html). But you can't double dip. If you're receiving an active-duty housing allowance, you can't collect the GI-bill housing allowance, too. You are also eligible for up to $1,000 a year for books and supplies.

Who qualifies. Eligibility is based on the amount of time you serve in the military. To qualify for maximum benefits, you must serve (or have served) at least 36 months since September 11, 2001. You may also get full benefits if you served on active duty for at least 30 continuous days but were discharged because of a serv-ice-connected disability. And you can qualify for partial benefits if you served as little as 90 days on active duty.

You may be able to transfer your benefits to your spouse or your children. Generally, you need to have six years of service and agree to serve four more years in the armed forces. (Different service commitments apply if you are eligible for retirement between August 1, 2009, and August 1, 2013.)

A service member, veteran or spouse must use the benefits within 15 years after the service member leaves the service. If you transfer your eligibility to your children, they're not bound by the 15-year limit, but they must use the benefits by age 26.

You can sign up at www.gibill.va.gov. For more information, check the Web site or call 888-442-4551.

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