SOURCE: NextStudent

August 01, 2008 18:49 ET

Education Benefits Double to $90,000 Under New GI Bill That Goes Into Effect Today

PHOENIX, AZ--(Marketwire - August 1, 2008) - The new Post-9/11 GI Bill, which President Bush signed into law last month, goes into effect today, more than doubling veterans' educational benefits to $90,000 from about $40,000.

The new GI Bill, being called "a GI Bill for the 21st century," is designed to allow more veterans to cover the full cost of their college education, making it possible for them to rely less on federal student loans, private student loans, or other forms of debt to pay for college. The Post-9/11 GI Bill will cover full tuition at the most expensive public college in a veteran's home state, grant up to $1,000 for books and supplies, and provide a monthly living stipend. Veterans with as little as 90 consecutive days of service may receive partial benefits toward a college education in their home state.

"This new GI bill gives Iraq and Afghanistan veterans a chance at a first-class future," said Patrick Campbell, legislative director for Iraq and Afghanistan Veterans of America. "Our nation has renewed its social contract with our men and women in uniform and their families."

The new veterans' benefits will be implemented in two stages to give the Department of Veterans Affairs time to transition into the new program.

Current GI Bill participants will start receiving partial benefits from the new GI Bill today. Full-time students who have three or more years of active-duty service will receive a $220-a-month increase, bringing their monthly benefit payments up from $1,101 to $1,321. Full-time students with less than three years of service will also see a 20-percent increase in their monthly benefits, from $894 to $1,073.

Beginning Aug. 1, 2009, some 1.6 million Iraq and Afghanistan veterans who have completed three years of active-duty service will start receiving their full education benefits under the Post-9/11 GI Bill, comparable to the level of assistance offered to World War II veterans under the original 1944 GI Bill, known as the GI Bill of Rights. This original GI Bill helped nearly 8 million veterans pay for a full college education by covering 100 percent of their tuition, fees, textbook costs, and providing a small living stipend.

The current GI Bill, on the other hand, which expires today as the Post-9/11 GI Bill goes into effect, has been criticized for not keeping pace with the rising costs of a college education: Experts estimate that the current GI Bill -- the Montgomery GI Bill -- covers only 60 to 70 percent of the average cost of four years at a public college or university, or less than two years of the average cost of a private institution. And since veterans' benefits are counted as income in federal student aid calculations, students receiving Montgomery GI Bill benefits may not be able to qualify for need-based federal grants and subsidized student loans to pay for the rest of their college costs that their benefits don't cover.

By precluding some veterans from qualifying for low-income grants and college loans, the current GI bill forces some of these college-bound service members to rely on higher-interest unsubsidized federal student loans, private student loans, and credit cards. The Montgomery GI Bill also requires veterans to contribute $1,200 -- $100 a month for the first 12 months they're in active duty -- to the program in order to receive any benefits.

Under the new GI Bill, veterans will no longer required to contribute that $1,200. Veterans will also have 15 years rather than 10 to use their GI benefits. Military members who are still on active duty as of Aug. 1, 2009, may be able to transfer education benefits to their spouse or dependent children.

The Department of Defense will issue an expanded statement of policy outlining the specifics of the benefits-transfer program and more specific details of the Post-9/11 GI Bill in the coming months.

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