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Big Cuts, Changes Coming to GI Bill Transfers

Edit February 10: The House has voted on this legislation. You want to read this important update.

If you’re eligible to transfer your GI Bill, do it now. Don't stop to ask "why?" Do it even if you don’t think your spouses or kids will end up using it. Do it even if you think you might want to get out and use it yourself.

Do. It. Now.

Did you do it? OK, now I'll tell you why.

The House and Senate are both working on legislation that will increase the time you are required to serve from six to 10 before making the transfer,  while also eliminating the ability for children who have been transferred a parent’s GI Bill to receive the entire Basic Allowance for Housing (BAH) payout. Instead they will only receive half the amount.

That’s a 50 percent cut for the children of service members to the cash that is supposed to help cover the cost of living for post-9/11 GI Bill users.

(Many thanks to our friends at MOAA for giving us the heads-up about this upcoming change).

If you transfer your GI Bill now and change your mind later about giving it away, you can always easily take it back. Transferring is not a permanent decision. Want to keep the benefit as it is and make sure someone other than you can use it? Transfer it now. Those who have transferred the benefit before 180 days after the new legislation is signed into law will get to use it as it currently stands.

Those who don’t? Out of luck.

Right now almost everyone using the post-9/11 GI Bill receives an E-5 housing allowance based on the location of their school (or, if the school is online, based on the national average amount). Only spouses of currently serving troops using a transferred bill do not receive the BAH payout. And to transfer the benefit you must serve six years and agree to serve four more.

But a panel last year recommended that the housing allowance be totally eliminated for children of troops using the transferred bill. They found that the BAH payment was often much higher than the actual cost of room and board at a school. For example, New School University in New York charged $18,490 for room and board for the nine-month school year between 2013-2014. But the BAH payment for that area over that period was $31,752, the Military Compensation and Retirement Modernization Committee (MCRMC) said in their report.

Rather than agree to getting rid of the entire payment for the children of service members as the MCRMC proposed, Congress is planning to cut it in half, seemingly to bring the payment more in line with actual room and board costs.

And while they are at it, they are planning to follow another MCRMC recommendation and increase the amount of time you must serve before you can transfer from six years with an additional four year service obligation to 10 years, with an additional two year obligation. That means you will be required to serve longer before you can transfer your post-9/11 GI Bill to your child or spouse.

Sounds fun, huh?

Officials with MOAA said they are choosing to focus their fight on the increase in service obligation. That’s because, they said, the whole point of giving people the option to transfer their GI Bill is to increase military retention. And if you dictate how and when it can be transferred, you take transfer choices and the ability to use them as a retention tool away from the Defense Department. Instead, they said, the DoD should change the transfer rules as needed.

The long and the short of it is this: if you can, transfer your GI Bill today – or you’re going to risk totally missing out.

Edit: Want to see the legislation? Go here.

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