Service members can boost their education benefits

Tens of thousands of service members still enrolled in the post-Vietnam era Veterans Educational Assistance Program have a new chance to buy into the more generous education benefits offered under the Montgomery GI Bill program.

It’s a timely offer, because Montgomery GI Bill benefits will rise this fall by another 18 percent, part of a package of benefits for veterans that is awaiting President Clinton’s signature.

In return for a $1,200 contribution during a member’s first year of service, the basic GI Bill benefit soon will total $23,400. The monthly benefit of $552 will rise to $650. It still will be payable for 36 months, or four years of college. The monthly GI Bill benefit in return for a two-year stint of active duty also will rise by 18 percent, from $449 a month to $528.

GI Bill benefits far outpace those available under the unpopular Veterans Educational Assistance Program. By passing the program, Congress watered down veteran education costs for the all-volunteer force after spending billions on GI Bill benefits during the Vietnam War era.

Under the Veterans Educational Assistance Program, enrollees while on active duty contribute up to $2,700 into a special, no-interest account. When they tap that account for education expenses, the government pays $2 in benefits for each dollar withdrawn, up to a maximum government payment of $5,400. Total benefit, including member contribution, is $8,100.

The Veterans Educational Assistance Program was the only veterans education plan offered to members who entered the military from January 1977 through June 1985. Yet, only one in four enrolled. Congress finally replaced it with the Montgomery GI Bill in July 1985, but for new entrants only. Veterans Educational Assistance Program enrollees remained stuck with their anemic education package.

The House Veterans Affairs Committee tried to make amends with at least some enrollees after the committee found windfall budget dollars in 1996. But, in the eyes of many, it created an even greater disparity in veterans benefits.

Lacking funds to allow all Veterans Educational Assistance Program enrollees on active duty to enroll in the GI Bill, the House bill specified that only members with "active" assistance program accounts on the day the bill was signed, Oct. 9, 1996, could make the switch for the usual contribution of $1,200.

The active account rule stung thousands of members, while thousands more, who had at least $1 in their Veterans Educational Assistance Program accounts, got to buy into the GI Bill.

What angered assistance program participants was that years before, service financial counselors had urged them to zero out their accounts, invest the money elsewhere and redeposit it weeks or days before retirement. The idea was to take advantage of other investment opportunities.

For four years, participants denied a shot at the GI Bill in 1996 have been urging Congress to give them another chance. This year, many will get it under a provision in both the 2001 Defense Authorization Act (HR 4205) and the Veterans Benefits and Health Care Improvement Act (SR 1402).

The details won’t please all enrollees, for two reasons. One, Congress set the contribution for the GI Bill this time at $2,700, not the $1,200 of four years ago. Second, many assistance program enrollees have retired. The open season applies only to enrollees who were on active duty from Oct. 9, 1996, through at least April 1, 2000.

Defense officials couldn’t come up with a quick estimate of the number of members eligible to switch. Eligible members will have a year to do so after the bill is signed. They will have up to 18 months to make the full $2,700 contribution.

Military and federal civilian retirees, Social Security recipients, survivor benefit annuitants and veterans receiving disability compensation will see a 3.5 percent cost-of-living adjustment effective Dec. 1 and payable Jan. 2.

The COLA is determined by inflation, as measured by the average change in the Consumer Price Index from the third quarter (July through September) of last year to the third quarter of this year. Last year’s COLA was 2.4 percent.