In the ongoing examination of the cost of veterans benefits, focus has shifted to the Post 9/11 GI Bill.
The Veterans Affairs department has paid out $11 billion in benefits to Post 9/11 GI Bill recipients since the bill was established in 2009, a significant budge line item. The high cost of this new GI Bill, coupled with the increase in its use, has made it a clear target for lawmakers trying to save other core veterans programs, like health care for the disabled.
In an effort to cut spending, a plan has been suggested by leaders of the House and Senate Veterans’ Affairs committees that caps the annual increase in tuition rates at three percent. This Veterans Affairs plan, that could cut $7 billion from veterans education benefits over the next 10 years, is currently in the Joint Select Committee on Deficit Reduction. The committee is tasked with cutting $1.2 trillion in federal spending over the next ten years by November 18.
The $7 billion savings estimate is based on a concept that would allow a maximum three percent annual increase in tuition reimbursement for new students, while allowing existing students to receive a full, uncapped rate increase as long as they do not change schools. Also, the cap would apply to tuition and fees at public and private schools, but not to the living stipend.
In other words, if a student is paying tuition fees of $7,605, and that increases 7.9 percent, the GI Bill tuition pay will only cover three percent of that increase. The student would have to pay $373 out-of-pocket.
There could be ways to offset those unpaid expenses for students that qualify for other federal student aid, such as Pell Grants, or some could qualify for Yellow Ribbon Program benefits, a program funded jointly by the school and the VA that covers tuition costs not paid by the GI Bill. Students may also choose to use their living stipend, which would not be capped under the proposal, to pay the difference. Some students may not be affected at all if their school doesn’t increase rates by more than three percent a year.
Caps on benefits have been used before, and even when they start small, their effects can build over time. Staying on top of your school’s tuition rate is the only way to know if you are covered by your current GI Bill.
Photo thanks to Eric Fischer under creative commons license on Flickr.