Don’t Save Your GI Bill For Your Kids

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.


About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Ruby

    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!

  • michael

    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.

  • Robert

    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?

    • Derek Sides

      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.

    • KateKashman

      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.

  • margarita

    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??

    • KateKashman

      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.

      • Dawn

        Its unfortunate that they have the rules the way they are….but perhaps if your kids are willing to work together, more benefits could be given to the older daughter and she could simply give her monthly cash allotment to the younger daughter? The older daughter would have her tuition paid for while the younger daughter gets some money every month and while not completely fair, at least both are getting some much needed help while in college

  • Sue

    Does anyone know how to transfer a portion of the benefit back to the service member once retired?

    • KateKashman

      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.

  • Wayne

    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?

    • KateKashman

      Wayne, you were under the Montgomery GI Bill. There were no provisions for transferring this benefit. The transferring option is available for the Post 9/11 GI bill. It was specifically structured as a retention incentive while our country was seriously embroiled in Iraq and Afghanistan.

      Thank you for your service.

  • Des

    My brother have been in the service for 30 years , can I used his GI Bill to finish my college.

    • KateKashman

      Des, Post 9/11 GI Bill benefits may only be transferred to spouses and dependent children. Your brother can not transfer his GI Bill benefits to you.

  • Melanie

    I separated in 2007 honorably after 10 years of active duty service and still have all of my GI bill benefits unused. Can I transfer anything to my children? I entered the military as a DENTIST (Dr.) so I’m wondering if signing up for the GI Bill in 1997 was just a waste. No one could give me an answer back then, so I signed up JUST IN CASE since signing up was a ONE SHOT DEAL.

    • KateKashman

      Melanie, the transferrability option for the Post 9/11 GI Bill was not introduced until after you separated from the service. It was specifically constructed as a recruiting and retention tool.

      You are eligible for both the Montgomery GI Bill, if you bought into it, and the Post 9/11 GI Bill. They both have great benefits if you have any interest in pursuing further education.

  • Jeanie

    Well I’m not sure this is the place but it seems to be the only board I’ve found where someone is answering questions.

    My husband followed the steps to transfer his Post 9/11 G.I. Benefits to me and it went through alloting me finances until Decemeber 2015 for benefits. Since then I have recieved a denial letter. Upon further research my husband has found that the wrong form was sent and the denial stands. They told him that he is unable to transfer at this time due to him not putting the paperwork in in time. Apparently within 30 days of his re-enlistment? I haven’t found ANYTHING regarding a 30 day time span anywhere and would like to know if that is in fact accurate and if so is there any way to petition it? I have applied, enrolled, and prepared to start school once I was sent an email confirmation that I would be able to use that money and now it is all hanging on whether or not the money is there.

  • Jenni

    Jeanie, I work for a Member of Congress. You should contact your Member’s office and ask that they check with the VA and/or military to see if there’s anything that can be done. Although, a Member cannot ask the agency to go outside of current law, they can ensure that you receive every opportunity under the law. Often, when your Member inquires, your request will end up on someone’s desk that might have a way to help-especially if it’s a “red tape” error, which it sounds like it might be. Either way, it can’t hurt to check!

  • Dee

    I have enrolled in college, applied for loans and Pell starts in two husband just told me he would transfer his Gi bill to me..should I start school as planned? And if I do, and the transfer is approved, will it cover my student loans I have already taken out?

  • Alex

    I have GI benefits transferred to me from my Step-dad but have recently joined the military myself, can I still use his benefits or do I have to give them back?

    • Kate

      Alex, you are one of the lucky few who will be able to use more than 36 months of benefits. You have the benefits transferred to you, plus your own benefits (assuming that you remain in the service long enough to earn your own benefits).

      Alternately, if your stepfather has other eligible children, he can reallocate your benefits to them.

      You could also save your benefits to give to your kids, but I think that is a risky strategy for a lot of reasons :)

  • Tasha

    My husband is currently active duty in the Navy. I actually graduated college with a Bachelor’s before he went into the Navy. A lot has changed in life and I realized the field I went to school for is not what I want to do with my life. Can my husband transfer his GI Bill to me even though I already have a degree?

    • Kate

      Yes, Tasha, GI Bill benefits can be used for all sorts of educational training, including additional bachelor degrees or advanced degrees.