Expanded Education Benefits for Military Members

I hear that the new GI Bill went into effect on August 1. How can I find out whether I qualify, and how much I can get in benefits?

Veterans and active-duty members of the military who have served since September 11, 2001, now have access to expanded education benefits, including a housing stipend and money for books and tutoring. The Post-9/11 GI Bill, which went into effect August 1, will cover the cost of four years at a public college -- or a big chunk of the cost of private college. 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 spouse or children. Here's how the program works:

What benefits can you receive? The Post-9/11 GI Bill pays 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 the GI Bill Web site for a list by state, which will be finalized by August 1). 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. You can also use the benefits to pursue a graduate degree.

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You can receive a monthly housing stipend based on the Basic Allowance for Housing for an E-5 rank with dependents. The size of the benefit is based on the college's zip code (see the BAH calculator to look up the benefit by zip code). You can't receive the GI Bill housing allowance, however, if you're receiving an active-duty housing allowance.

You are also eligible for up to $1,000 a year for books and supplies.

Who qualifies for benefits? Eligibility is based on the amount of time you have served in the military. To qualify for the maximum benefits, you must serve (or have served) at least 36 months after September 10, 2001. You can also receive full benefits if you served on active duty for at least 30 continuous days but were discharged because of a service-connected disability.

You can still get partial benefits if you served for a much shorter period. "Even if you've only served as a Reservist or Guardsman for 90 consecutive days of active duty, you can still qualify for part of the program," says June Walbert, a certified financial planner with USAA. You can receive 40% of the maximum benefits if you served for only 90 days to six months, and you can receive a higher percentage of the benefits for longer periods of service.

Is there extra funding for more-expensive colleges? Yes, there is. No matter where you go to school, you can receive benefits up to the cost of in-state tuition and fees at the most expensive public college in the state where you're attending school. If you're attending a private college or are paying out-of-state tuition at a public college, however, the benefits may not cover the entire bill. But you could get some extra help. About 1,200 colleges have signed up for the Yellow Ribbon program, agreeing to contribute a fixed amount above the GI Bill limits for a certain number of students. The Department of Veterans Affairs matches the school's contribution. You must qualify for the maximum GI Bill benefits to receive the extra money, and you must apply for it through the college. For a list of the amounts by college, see the Yellow Ribbon page on the GI Bill Web site.

Can you transfer your benefits? You may be able to transfer your benefits to your spouse or your children. To qualify to transfer the benefits, you generally need to have six years of service and agree to serve four additional years in the Armed Forces. (Different rules apply if you are eligible for retirement between August 1, 2009, and August 1, 2013.) See the Transferability of Benefits page for more information.

How long are you eligible? The service member, veteran or spouse must use the Post-9/11 GI Bill benefits within 15 years of leaving service. If you transfer your eligibility to your children, they must use the benefits by age 26.

Where do you sign up? You can sign up at the Department of Veterans Affairs GI Bill Web site and can use the benefits anytime after August 1, if you qualify. For more information, visit the GI Bill Web site or call 888-gibill-1.

See our Military Family Money Guide for more information to help members of the military and their families with their finances.