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January 4, 2005

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"Money for college" is consistently cited as the number one reason people join the military. With the Montgomery G.I. Bill (MGIB) now paying over $1,000 per month to qualified students, program rewards are significant and applicable toward a broad range of educational opportunities. One would naturally expect that for such an extraordinary benefit, MGIB usage would be extremely high. Sadly, the data indicates otherwise - over 40% of MGIB benefits go wasted. Despite DoD/VA efforts to raise awareness for this important benefit, the G.I. Bill still remains a mystery to many. For those who take time to understand the program, they will find that this hard-earned benefit is both easy to use and quite flexible.

Created during the Servicemembers Readjustment Act of 1944, the G.I. Bill of Rights transformed America. It was the first program to make a college education broadly available to the American people. Since 1944, millions of Servicemembers and Veterans have taken advantage of the G.I. Bill, using over $1.4 billion in benefits each year. Although the program has seen countless updates and innovations, this V.A. administered program continues to help nearly 400,000 each year realize their educational aspirations.

Real dollars. In 2004, Congress passed legislation increasing the maximum monthly MGIB payment to $1,004 for up to 36 months - for a total benefit of $36,144. In some cases, Servicemembers can earn more or less depending on the length of their enlistment and participation in programs like the Navy College Fund. In addition servicemembers have the option to increase their benefits by $150 a month by contributing an extra $600 at any point during their enlistment.

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The MGIB can also be used to supplement existing DoD Tuition Assistance programs - through the "Top-Up" program. It's smart for Servicemembers to use Tuition Assistance before MGIB, allowing them to save their MGIB benefits for later. For both active-duty and Veteran participants, students can start and stop the benefit usage at will - the 36 months is simply drawn down as it's used. With the exception of "Top-up" all MGIB money is paid directly to the student, not the academic institution.

Qualifications. For the most part, all active-duty Servicemembers are eligible to enroll in the program upon entering active duty - enlisted personnel are automatically enrolled (officers are not). Officers who are commissioned through a Service Academy or ROTC students who received over $3,400 in any academic year are not eligible for the MGIB. Eligible enrollees must agree to a $100 per month reduction in salary for 12 months. Servicemembers can choose to disenroll (and keep the $100 per month) by completing form DD Form 2366 -- a permanent and irrecoverable decision. In most cases, Servicemembers and Veterans are qualified if they contributed the full $1,200 while on active-duty (or qualify under VEAP conversion), were honorably discharged, and served for at least 2 years. In addition, they must have a high-school diploma, a GED or have earned at least 12 college credits.

Reserve and Guard personnel have more complicated eligibility requirements but often find they have meaningful MGIB/State Tuition Assistance programs available to them. Fortunately, new legislation makes MGIB more broadly available to this important constituency. On October 28, 2004, HR 4200 (Chapter 1607) authorizes MGIB benefits for reserve/guard personnel activated after September 11, 2001. The benefits scale with the amount of time served on active-duty, from 40% ($14k) for those personnel serving between 90 - 360 days and up to 80% (28.8K) for personnel activated for 2 years or more. In addition Reserve and Guard members that are activated for more than 2 years may elect to pay the standard $1,200 contribution and receive the Active Duty MGIB ($36K).

Program Flexibility. MGIB benefits aren't just for 4-year degrees; they're quite flexible and can be used for post-graduate studies, flight training, college/vocational courses, distance learning, and certification tests. Veterans and Reserve/Guard personnel can also use the program to fund some apprenticeship and job training programs. To receive the full benefit ($1,004 per month), however, they must be a full-time student enrolled in a regionally or nationally accredited educational institution.

Chris Michel is Founder and President of Military Advantage, the nation's largest military membership organization. Through Military.com, the company connects over 4 million members to the lifelong benefits of military service and provides public and private sector clients efficient access to the military market. Members trust Military.com for career, education and financial services. Founded in 1999, Military Advantage has raised over $30 million from leading investors and strategic partners, including A&E Television Networks. In 2004, Military Advantage was acquired by Monster Worldwide (Nasdaq: MNST). Prior to founding Military Advantage, Chris was a strategy consultant assisting companies in the airline, entertainment, and financial services industries. Chris also served as a Naval Flight Officer in the United States Navy. While on active duty, Chris flew as a P-3 Navigator, Tactical Coordinator and Mission Commander in support of maritime interdiction operations in the Red Sea, NATO enforcement operations in the Adriatic, and counter-narcotics missions in Central America. Following his operational tour, Chris worked in the Pentagon as Aide to the Chief of the Naval Reserve. An advocate for servicemembers and veterans, Chris is a frequent speaker and has appeared in the Wall Street Journal, New York Times, Business Week, Financial Times, and others. He is also a regular guest on CNN and other national radio and TV programs. In addition, he writes the monthly "Charting your Course" column for U.S. Naval Institute's Proceedings magazine and is working on his first book to be published by Simon & Schuster in 2005. He also serves as a Director of the U.S. Navy Memorial Foundation and a Trustee of the U.S. Naval Institute Foundation. Chris earned an undergraduate degree from the University of Illinois and an MBA from the Harvard Business School.