Post-9/11 GI Bill vs Montgomery GI Bill

“They told me the Post-9/11 GI Bill was way better, so I gave up my MGIB.”

Having spent most of the last two years as a Veterans Administration (VA) School Certifying Official (SCO), I heard this phrase a lot from newly minted veterans and servicemembers about to make the transition. Generally, “they” were right. While the traditional MGIB only pays a stipend, the Post-9/11 GI Bill pays a stipend plus tuition and fees (at the in state rate) and up to $1000 per year for books. However, there are situations when the MGIB is a better deal and making that irreversible decision without having all the facts could potentially cause you to lose out on up to $14,000. (Yes, I said $14,000.)

So, when should you hang on to your MGIB? Before I answer that, let me just say that what I am going to list below are some situations where the traditional MGIB might be better than the Post-9/11 GI Bill. However, each veteran’s service record and individual situation can affect which is the better option and you should fully research the options using the VA’s official education website (www.gibill.va.gov) and call the VA education line at 1-888-442-4551 with any specific questions pertaining to your individual case. Now that I’ve given the required “don’t blame me” qualifier, here are some scenarios:

1)      You plan to join the Guard or Reserves after leaving Active Duty: Federal regulations require than an individual who qualifies for more than one VA education benefit give one up in order to accept the Post-9/11 GI Bill benefit. However, contrary to rumor, it does not have to be the MGIB that is given up. Guard and Reserve members can qualify for educational benefits called the Montgomery GI Bill - Selected Reserve (MGIB-SR) and/or Reserve Education Assistance Program (REAP). These individuals may opt to give up one of these benefits instead. Electing to give up one of these and keep your MGIB could net you up to an additional $14,000 since MGIB-SR and REAP don’t pay that much. (Full details on MGIB-SR and REAP will be explained in tomorrow’s blog.)

2)      You plan to take all your classes online: Under the Post-9/11 rules, at least one undergraduate class per term must be taken in a “brick-and-mortar” setting (aka fully on campus) in order to receive the full housing allowance. Taking all online or a combination between online and hybrid classes significantly reduces the housing allowance for Post-9/11 students.

For example, let’s say you are living in zip code 93950 (Pacific Grove, CA), are 100% Post-9/11 eligible and are taking a full time load with at least one traditional, residential class. Your housing allowance would be $1920 a month. If, however, you take a full load of online only or online/hybrid classes, your housing would be only $714.50 a month.

If you use the MGIB in this situation, you would receive $1662, regardless of whether you are taking online or residential classes. Of course, if you use the Post-9/11 GI Bill, you also get tuition and fees paid for and a book stipend so you’ll need to do the math to determine which scenario is more beneficial for you personally. Which brings me to my next scenario.

3)      You have another way to pay for your tuition and fees: A lot of students are under the impression that if they get a VA education benefit, they don’t qualify for any other aid. That is incorrect. VA education benefits are special and are excluded from many of the rules that prevent double dipping, to use a term we are all familiar with. If you qualify for a scholarship or other federal aid, you can use those to pay for your tuition and fees, and in some cases books, and still receive your VA benefits. If you have other resources to cover tuition and fees and books, then you should compare the Post-9/11 housing allowance for your area and determine if it is higher than the $1662 MGIB stipend. (Post-9/11 housing rates are based on the active duty, E-5 with dependents rate for the zip code of your school.)

4)      You plan on attending school only part time: In order to receive any housing allowance from the Post-9/11 GI Bill, you must be attending at more than 50% “rate of pursuit.” That’s a VA term that basically means you have to go more than half time (for general undergraduate credits on a semester term that works out to 7 credits or more per term). Most undergraduate classes are only 3 credits each. Therefore, you generally have to take 3 classes to get any pay under the Post-9/11 GI Bill. Under the MGIB, however, you only have to attend half time to get any housing. So, if you plan on only taking two classes at a time, and they are each 3 credits, you would get a prorated stipend under MGIB but no housing at all under Post-9/11.

5)      You didn’t serve long enough on active duty to qualify for Post-9/11 at the 100% rate: To fully qualify for MGIB, you must have served 36 months or more (not counting basic and AIT/tech school, as any time DoD paid for you to train does not count as far as VA is concerned). If you leave before the 36 month mark, you may have the option to pay the rest of the money into the MGIB and come out with, for example, two years of full MGIB benefits.

If, however, you leave active duty before hitting that same 36 month mark for Post-9/11, you will be rated at less than 100%. Let’s say you served 11 months. That puts you at a 50% rating for Post-9/11 (the full percentage scale can be found on the VA’s GI Bill webpage). Using the example of the 93950 housing stipend from earlier, you would get $960 a month if you were going full time on campus, plus $500 a year for books, and half of your tuition and fees paid for. Again, it comes down to doing the numbers and seeing which benefits you more.

6)      You served long enough to qualify for both MGIB and Post-9/11: If you served more than 36 months (not counting basic and AIT/tech school, as listed above) and you paid into the MGIB, you may qualify for both benefits. Under federal regulation, you can use a combination of VA education benefits, up to 48 months total (with one exception, which pertains to dependents and will be discussed later this week). If you qualify for and use all 36 months of your MGIB, you can get an additional year of Post-9/11 at whatever percentage you qualify. So, for example, if you served 48 months, you could get full MGIB for 36 months, and then 12 months of Post-9/11 GI Bill at approximately the 60% rate.

One thing to be careful of if you choose this route - you need to be sure that you use every last day of your MGIB before switching over to the Post-9/11 GI Bill. If you switch over before you have exhausted your MGIB benefit, you only get as many days of Post-9/11 benefit as you had left of MGIB. Even if you have one day of MGIB left, you would only get one day of Post-9/11, instead of 12 months.

Have I confused you yet? As with everything else government related, there are tiny print rules and weird loopholes that can greatly impact your benefits so doing your homework to make sure you are maximizing the benefits you earned is important. If you need more guidance than I provided here, feel free to write a comment or drop me an e-mail and I will try to answer. Also, I recommend exploring the VA website and/or contacting the call center. You can also try calling the college/university you are thinking of attending directly and ask to speak to the School Certifying Official.

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