Update: I’ve changed the title of this post to better reflect what I actually say in the text.
Ever since the Post 9/11 GI Bill was modified to allow service members to transfer their benefits to their spouse or children, I have been hearing people tell me that they are “saving” their GI Bill for their kids. And my response has been: “Don’t do it.”
Now, there is certainly no right answer for every single family. I can’t know your particular circumstances and I certainly don’t know what choice will be right for you. However, I hope that everyone has a clear understanding of what they are doing when they defer this hugely valuable benefit for 5, 10, even 20 years.
Just like compounding interest helps saving money grow quickly, and that same darn interest makes it hard to pay off credit card bills, the value of GI bill benefits also has a compounding aspect. The math isn’t quite as tidy, because a college degree doesn’t improve income in nice round numbers, but the concept is still the same.
If a military member, veteran or their spouse were to start college this year using the Post 9/11 GI Bill and graduate in four years, they would probably immediately increase their income. Current estimates say that a college degree is worth an approximate average of $25,000 per year in income. (Obviously, some degrees make lots more and some make significantly less.) That increase in income remains throughout your working life. If you are now 26, and graduate at 30, you have an estimate 35 years of working ahead of you. That comes out to nearly $800,000 more income if you use the GI Bill now to get a college degree.
With that $800,000 in extra income, you could put several children through college and still have money left over for other purposes. On the other hand, if you save your Post 9/11 GI Bill benefits for your kids, you’ll have a lower lifetime income and you’ll only be able to put one child through school on the GI Bill.
Another important thing to consider is what sort of changes might be made in the GI Bill between now and the time that your child goes to college. I urge everyone who is transferring their GI Bill benefits to their children to ask themselves what this program might look like in 5, or 10, or 15 years. Historically, military education benefits swing back and forth, gaining and losing value as the country requires more and less from their military. We are coming out of a period of high military recognition, and it is likely that military education benefits will be cut again in the future. Other educational benefits, like Tuition Assistance and MyCAA, have already been changed or are expected to change in within the next few years. The Post 9/11 GI Bill itself has already been subject to numerous modifications and adjustments. It doesn’t take much imagination to see how it will be target for future budget cuts. It would be awful to pass up the chance to use the currently generous benefits now only to discover that they had lost much of their value before your children have a chance to use the benefits.
Again, there is no single right answer for everyone. If both you and your spouse have already attained as much education as you want or need, then there is no reason not to transfer the benefits. However, you might want to consider retaining the flexibility to use them if your plans change. One way to do this is to transfer one month of benefits to your spouse and each child. This transfer of one month of benefits puts the spouse and children into the GI Bill system. Once you have retired, you can not add them to your benefits. You can make adjustments to the amount allotted to each person at any time, so you can make changes as your family’s need change.
It is admirable and noble to want to transfer your eligibility to your kids, but in most cases the family as a whole will find it more profitable if Mom and/or Dad use those benefits now to increase their family’s earning potential for years to come. Using the benefits now eliminate concern over future program alterations, and it also creates an economic foundation for a family to provide for the kid’s college education themselves.
That's a good point. I only served one term so I couldn't transfer the benefits to my kids. It's my belief that kids value their education more if they are paying for it anyway, that's how I ended up in the military in the first place – they repaid my Federal student loans. However, I was considering putting off using the GI Bill to get my Master's. I've used one year of benefits from the Post 9/11 GI Bill and figured I could wait on the Master's till later on in life. But what if Congress cuts benefits? Budget cuts are definitely coming so there's a real risk there. Or if in years to come, schools no longer offer the "Yellow Ribbon" benefit? Right now, you can go to pretty prestigious schools without paying out of pocket. Schools like American University, George Washington University, Emory, Northwestern University, U Penn, Brown, Amherst, Carnegie Mellon, and Notre Dame. Those of us fortunate enough to HAVE this benefit should get the most out of it and go to the best school we can get into using it. Some of these great schools even offer degrees online or part time – look into their "Schools of Professional Studies" or "University College" programs, for example. I'm considering doing just that, and now doing it ASAP instead of putting it off. Thanks for posting this, Kate!
I think this is somewhat bad advice. Yes, if you will need further education, you may wish to keep it for yourself. A better tactic would be to go ahead and sign up each family member, transfer $1 in benefits (once signed up, you can transfer more…but if you don't sign up before leaving a/d, you can never do it.) Then if you don't use the benefits, or if you wish to give your kids more you can.
In my case I have to use the education benefits since I cannot transer them…I hit 30 yrs and exited just before the eligibility date. I'd gladly give my daughter the 3 yrs if I could, rather than add another Masters or try to find something else to study.
I absolutely agree with your suggestion – that is why I state something very similar in the second to last paragraph.
I see far too many military folks putting all their eggs in one basket by choosing not to use their GI Bill benefits even when they could benefit from additional schooling. These same folks are also often counting on the GI Bill as their entire college savings plan. The point of this article was to provoke people to think about all the different aspects of this generous program.
My husband and I fall into the "probably don't need or want" any further education category. We still don't make the availability of the GI Bill part of our long-term college funding plan for our four children. There are too many changes that could render it less valuable. If it is still available when my kids go to college, and we can utilize the benefit then, it will be a bonus.
Thanks for reading.
if you are looking to re-enlist and still not eligible you automatically incur a 4 year commitment when you transfer gi bill benefits. Comes in handy when you receive a re-enlistment bonus and happen to be deployed overseas. Hope this helps.
If you have a spouse and/or kids, I agree with JDC. Transfer a month (or a $1.00) of benefits to each. As it currently states, you can always modify that amount (increase or decrease) however, once you sign out for the last time, then the transfer option permanently goes away.
I attempted to transfer my GI bill to my daughter a couple of years ago but was denied. I am retired and was advised since I was not on active duty or in a reserve status she could not use it. I called and recieved a written response and was told the same thing both times. I served from 1984-2004 so I am defidently quailied for the GI bill. Anybody got a answer for this?
Go to va’s ebenefits website and see if you should go to your nearest DEERS office for a DS login…. You can access a wealth of information including GI Bill status.
Robert, unfortunately, the transferrability benefit was not retroactive for service members who retired before it became available. If you retired in 2004, then you are not eligible to transfer your benefits.
Thank you for your service.
We transferred ours to our 2 children 2 months ago. I have my degree and my husband is nearly done. He uses TA and we do pay out of pocket because of the tax deduction. We know next year we won't have the tax deduction but we had to transfer because he only has 2 years until retirement and we didn't want it to go to waste by missing the cut-off.
I agree with hanging on to it for as long as you can before transferring because you don't know what you will be doing or want to do in the next few years. Like us, we waited until the very end to transfer.
Totally disagree – put children on there….here is why….Even if you transfer it to your children – that does not mean they have to use it. The service member can ALWAYS choose to use it themselves at any time or move the months around to those he has enrolled to receive his/her benefits. This is a safety precaution in case something happens to service member even if not on duty – his benefits are still directed to his loved ones. If child is 16 -18 years highly recommend due to BAH – which spouse will not receive. If child is younger , I still recommend they add them to the benefits – AGAIN as a safety precaution so benefits will not go to waste – service member determine who and when it can be used.
My husband retired in 2010, we were able to transferred some of the GI Bill to my oldest daughter, which at that time was attending college but didn't include the youngest one as she wasn't college age. Now she is about to begin college and were told we couldnt transfer the benefits. Why can I allocated the benefits to a different child ? Any ideas??
margarita, your husband needed to make a transfer to each possible beneficiary before he retired. Once an eligible beneficiary is "in the system," then your husband is able to modify the transfer. In this case, it sounds like he only transferred benefits to the one child. He can transfer more benefits to that child, but he is unable to add new beneficiaries once he has retired. At this point, it seems his choices for use of the Post 9/11 GI bill are to have your older daughter use more benefits, or your husband can use them himself.
This subject has a lot of people aggrevated, so keep an eye on benefits information in case the system changes in the future.
Does anyone know how to transfer a portion of the benefit back to the service member once retired?
Sue, the veteran always retains the right to modify or revoke the transfer. If the service member transferred all of his or her available months, he or she can go into the Transfer of Education Benefits page at the milConnect website and change the number of months. Unless the servicemember is absolutely sure that they will use all the months, they should leave one month for each eligible beneficiary.
I hope that helps.
I'm wondering I got out back in 1995 and never used my gi bill. My daughter is now enrolled in college will I be entitled to transfer this to her?