From 2010 through 2016, the Veterans Benefits Administration spent $65 billion on educational benefits for 1.6 million Veterans, spouses and children, mostly for Veterans’ tuition, fees, and housing. In 2016, VBA spent an average of $17,400 per beneficiary.
Beginning August 1, 2009, the Post-9/11 GI Bill extended educational benefits to service members who were on active duty in the military on or after September 11, 2001. This GI Bill (officially the Post- 9/11 Veterans Educational Assistance Act of 2008), the latest version of a law that helps Veterans pay for higher education, provides more extensive benefits than have ever been offered to current and former service members, enabling them to transfer its benefits to certain family members and to enroll in a wide array of educational and training programs. In March 2019, the Department of Veterans Affairs (VA) reported that in 2018 it spent about $10.7 billion on 700,000 beneficiaries of the Post-9/11 GI Bill.
At the request of the House Budget Committee, the Congressional Budget Office analyzed data from VA to understand the law’s cost, the types of educational programs beneficiaries enrolled in, and the institutions they attended. CBO also reviewed research related to some of the law’s stated purposes, such as motivating people to join or stay in the military and using the educational benefits as part of readjusting to civilian life. This analysis primarily describes spending in 2016, with some information from 2017 and some historical data from 2009 onward.
What Benefits Does the Post-9/11 GI Bill Offer?
The Post-9/11 GI Bill is more generous than earlier GI bills. Beneficiaries are eligible for 36 months of postsecondary education, including full tuition and fees at public colleges and universities (or up to $23,672 for the 2018–2019 academic year toward tuition and fees at private schools), as well as a housing allowance, books and supplies, and other related expenses. After 2009, the Congress further expanded the law, among other things allowing benefits to be used for nondegree and apprenticeship programs. The amount of benefits people receive depends on the length of their qualifying active-duty service (partial benefits are available with a minimum of 90 days’ service), enrollment status (full time or part time), and the type of school or program they enroll in.
The Post-9/11 GI Bill differs from its predecessors in several important ways: There is no specific dollar limit on tuition and fees for programs at public institutions; benefits may be transferred to spouses or children once members have served between 6 and 16 years in the military; and students generally may use the benefit at any point in time.
How Much Is Spent on the Law’s Benefits?
The Veterans Benefits Administration (VBA) spent $65 billion (in 2018 dollars) on about 1.6 million beneficiaries in the seven years from the law’s inception through 2016, CBO estimates.
In 2016 (the most recent year for which beneficiary data were available), most spending on the Post-9/11 GI Bill (82 percent) was for Veterans, and the remainder was for spouses and children (see figure below). Total annual benefits were, on average $17,400 per person. (Active-duty personnel, who are about 10 percent of Post-9/11 GI Bill recipients annually, were excluded from the analysis of beneficiaries.) Tuition, fees, and housing accounted for 95 percent of total spending in that year.
The housing allowance, the most expensive of the law’s benefits, is set at the amount of the Department of Defense’s monthly basic housing allowance. It accounted for about half of the spending for Veterans, about 45 percent of the spending for children, and 30 percent of the spending for spouses, who often received housing through the service member. Most beneficiaries (90 percent) attended programs more than half time, which qualified them for part or all of the housing benefit.
Spending was less per capita for students who enrolled in programs that were primarily online than it was for beneficiaries who attended brick-and-mortar schools, CBO estimates. That is because tuition and fees for online programs tend to be lower compared with other programs and because the housing allowance for students in online programs is set at half of the monthly basic housing allowance.
What Types of Schools Do Beneficiaries Attend?
Veterans and spouses who used the law’s benefits chose different types of education than their children did. Veterans and spouses were less likely than their children to enroll in public institutions; they were more likely to pursue postsecondary programs at junior colleges, private nonprofit and for-profit institutions, and graduate schools. By contrast, most children, like many college-age students nationwide, attended undergraduate programs at public universities and colleges.
Veterans and spouses enrolled in online programs at about the same rate as all students nationwide (13 percent of Veterans and 17 percent of spouses in 2016, compared with about 13 percent of all students). Children of Veterans enrolled in such programs at much lower rates (about 2 percent). Overall, 8 percent (about $900 million) of total spending on the Post-9/11 GI Bill in 2016 was for beneficiaries in online programs.
The majority of beneficiaries in 2017 (the most recent year for which data on payments to institutions were available) attended public institutions; VBA paid those schools less per capita than it paid private nonprofit and for-profit institutions.
Since the law’s inception, 8 of the 10 institutions that received the largest amounts of tuition and fees have been private for-profit institutions. For-profit firms accounted for a very large share of the online programs used by beneficiaries.
Does the Law Meet Its Objectives?
The degree to which the Post-9/11 GI Bill achieves the purposes set out in the bill is difficult to measure. Because VBA collects little data on the number of beneficiaries who complete programs and no information on employment outcomes, the effectiveness of the benefits in helping service members readjust to civilian life is unclear. (Lawmakers enacted legislation in 2016 and 2017 to require VBA to provide more data on outcomes, but as of April 2019 VBA had not delivered its report.)
Recent research indicates that the newest GI Bill is comparable to prior Veterans’ education benefits in that it makes retaining service members more difficult because in order to use the educational benefits themselves, service members usually must separate from the military. The option to transfer benefits to dependents, which was designed to encourage longer service, appears to have had little impact. Furthermore, because beneficiaries have broad latitude in choosing a program, VBA has limited ability to ensure that beneficiaries enroll at institutions whose graduates have strong employment prospects and relatively high earnings. About one-third of Veterans using Post-9/11 GI Bill benefits in 2016 attended for-profit programs, and most research indicates that graduates of such institutions have worse labor market outcomes than similar students in public institutions.