GI Bill Housing Benefit Cut

December 11, 2015

The Post-9/11 GI Bill includes a generous housing allowance that enables student veterans to pursue their education or training goals on a full-time basis in most cases.

The benefit is pegged to the active duty housing allowance for an E-5 family of four at the location of the college or training facility where the student is enrolled. Full-time online students get a set rate for their housing.

Service men and women who serve six or more years in a uniformed service and agree to reenlist or extend their service for another four years earn the right to transfer their new GI Bill entitlement to their spouses and dependent children.

But the housing allowance will be cut in half for future GI Bill transfers to children.

Senate lawmakers matched House action this week by levying a 50 percent housing cut for children with transferred Post-9/11 GI Bill benefits. The change does not apply for members who already have transferred benefits to their children.

The House version of the provision would also raise the minimum service requirement to 10 years' service with an agreement to serve two more years to secure GI Bill transfer rights. The final Senate language was not available at the time of this writing, but is expected to be the same.

MOAA testified earlier this year that DoD and the Services should retain the authority to set the service requirements for transferring the GI Bill to match force needs, not the Veterans Affairs Committees. In the end, the House adopted a recommendation of the Military Compensation and Retirement Modernization Commission (MCRMC) to change the transfer rules.

Spouses with transferred benefits may use their GI Bill immediately. Children must be 18 years old and the sponsor must have completed at least 10 years' service before they can access the benefit under current rules.

The housing allowance cut applies only to children with (future) transferred benefits. Spouses will receive the current rate going forward.

Transfer contracts in place prior to 180 days after the date of enactment of the legislation will be grandfathered. Transfer contracts signed after that date will be subject to the lower housing rate.

The MCRMC found that the GI Bill housing benefit often exceeded the actual cost of housing at colleges and recommended it be ended for dependents. But the Veterans Affairs Committees agreed to keep the current benefit for spouses and reduce the amount by 50 percent for children.

MOAA urges families who meet or exceed the current six year service requirement to carefully consider their options on GI Bill transferability. They will have only six months after the bill is signed into law to decide if they want to preserve the current housing rate for their kids by agreeing to serve another four years (after completing at least six) under a transfer-of-benefits reenlistment or service extension contract.