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GI Bill for Guard and Reserve

Book on a table with some coins & a graduation cap stacked on it highlighting GI Bill for Guard and Reserves

Navigating the many GI Bill For Guard and Reserve options

I have been a member of the Air National Guard for almost 25 years at the time of writing this article. During that time, I have served as a Drill Status Guardsmen, a Title 32 Dual Status Federal Technician, and now as an Active Guard Reserve (AGR). Each status has had an impact on the education benefits I was eligible to receive. I’ve used the G.I. Bill towards my own education. I served several years as a Retention Office Manager where I helped unit members apply for, use, and transfer G.I. Bill benefits. Now I talk to military members and veterans about ways to optimize the GI Bill for Guard and Reserve benefits as part of a holistic Financial Plan. If you are in the reserve (guard) component it is important for you to understand what you may be eligible for and how to weigh those unique options.

Which chapter of GI Bill for Guard and Reserve are you on?

When I strike up a conversation about education benefits, service members will often proudly claim “I have THE G.I. Bill”, and get confused when I ask, “Which G.I. Bill?” Many folks are unaware of just how many different G.I. Bill options exist.  The genesis of the G.I. Bill began with a single program known as the Servicemen’s Readjustment Act of 1944 following World War II that sunset in 1956. Congress has since created many new programs of educational benefits for veterans under Title 38 of the United States Code with each unique program found in its own Chapter, enough to fill an entire book! You can go right to the source at the VA site but I’ll give you a brief overview.

Chapter 1606 Montgomery G.I. Bill for Selected Reserve

  • This is a free benefit that members of the Guard and Reserve become eligible for with a 6-year service commitment.
  • A tax-free monthly stipend is paid directly to the member based on course load. Rates can be found here, currently $439.
  • Can be stacked with an additional “Kicker” offered by the service component if eligible.
  • Use or lose. Once you separate you can no longer use this benefit and will lose it forever after a one-year break in service.
  • You can still obtain eligibility for this benefit if you started your career on Active Duty and then transferred to a reserve component and agree to the service commitment.

Chapter 1607 Reserve Educational Assistance Program (REAP)

  • Another no-cost benefit, the precursor to the Post 9/11 GI Bill
  • Tax-free monthly stipend for reserve members that served on Title 10 orders after September 11th, 2001.
  • Rates were based on CH 30 MGIB and length of service:
    • 40% of MGIB for 90 days up to 1 year.
    • 60% of MGIB over 1 year but less than 2 years
    • 80% of MGIB for anything over 2 years on orders
  • Could be stacked with Kicker if the member already established eligibility.
  • This program was closed to new enrollments in 2015 and sunset for current enrollments in 2019.

Chapter 30 Montgomery G.I. Bill Active Duty (MGIB-AD)

  • Eligibility is based on Active Duty, AGR status, or lengthy mobilizations, after at least 2 years, with some unique other requirements.
  • Sorry, this one will cost you $100 per month for a year ($1,200).
  • A much more generous tax-free monthly stipend is paid directly to the member. Rates can be found here, currently $2,210.
  • You can supercharge this benefit with an additional “buy up” with an 800% ROI!
    • $20 will get you an additional $5 per month ($180)
    • $600 will get you an additional $150 per month ($5,400)
  • Can be combined with a Kicker incentive.
  • You could continue to use this benefit after you are separated from service for up to 10 years.

Chapter 31 Veteran Readiness and Employment

  • Eligible for benefits with a service-connected disability rating of 10% or more as a veteran or 20% or greater while still serving.
  • Up to 48 months of entitlement to the various programs.
  • This does not diminish entitlement from any other chapter of the GI Bill you may still have, but the use of other VA education programs is deducted from CH31 VR&E entitlement.
  • Provides a suite of rehabilitation programs found here.
  • Dependents may qualify for benefits as well.
  • Also provides a subsistence allowance, rates can be found here.

Chapter 32 Veterans Educational Assistance Program

  • This one is for the old timers, who must have entered active duty between 1977 and 1985.
  • The government matches $2 for every $1 contributed from military pay, up to $2,700.

Chapter 33 Post 9/11 Veterans Educational Assistance Act of 2008

  • Andrea Clark, CFP®, AFC® published a great, in-depth post about this benefit here.
  • A free benefit with tiered payments based on the cumulative amount of qualifying active-duty time after 9/11/2001.
  • Tuition and Fees up to 100% for public in-state institutions, paid directly to the school.
  • Basic Allowance for Housing (BAH) based on the school’s zip code or separate rate for online-only programs.
  • Tax-free book stipend paid to users up to $1,000 per year.
  • Additional coverage under the Yellow Ribbon program for participating schools once the 100% tier is reached.
  • The only benefit you can transfer to dependents, but is limited by time in service requirements and incurs a service obligation.

Chapter 35 Survivors’ & Dependents’ Educational Assistance Program or Fry Scholarship

  • Eligibility is for dependents based on the 100% service-connected disability or line of duty death of the veteran after 9/11/2001.
  • DEA is paid directly to the dependent.
  • Fry Scholarship is similar to CH 33 Benefits.
  • You cannot use this benefit as a servicemember, but make sure your family is aware of this program in the unfortunate event they become eligible.

Chapter 36 Mars Colonist College Fund 

  • Ok, I made this one up! The point is, you never know when a new program might be implemented based on the needs of the DoD that could be more valuable than the one you may be using now!

Wait, 36 + 36 + 36 = 48?

Each chapter of the GI Bill you establish eligibility for comes with 36 months of entitlement. In my case, I was eligible for three different chapters of the GI Bill (and could have bought into a fourth), so I could have amassed 108 months (or 144) right? Unfortunately, you cannot collect them like baseball cards so each time you apply for a new chapter of the GI Bill you must relinquish (permanently) the current version of the GI Bill you are using. The good news, you can start over with up to 36 months of the new GI Bill. The bad news, you cannot exceed 48 months of total entitlement when the different chapters are combined.

This limitation is one of the key planning factors when you run a scenario analysis for what GI Bill benefits to use, how much to use, and when to use it. I’ll show you a very personal example.

My story

A young 17-year-old Sam Lewis joined the Delaware Air National Guard (DANG) in 1999. At the time of my enlistment the State of Delaware paid up to 100% of in-state tuition for Delaware National Guard members to attend public schools and an equivalent amount for private schools. I was eligible for Chapter 1606 GI Bill ($276 per month) once I graduated from Basic Military Training. About a year into my contract the Kicker was introduced, and I agreed to extend (basically restarted my 6-year commitment) and would now earn another $350 tax-free per month. So, I was getting my school bill paid 100% plus $626 a month tax-free plus my regular drill weekend checks. Somehow, I always found a way to spend all of it. It can’t get any better than that right? 

I ended up getting activated in 2004 and spent just shy of a year on orders including a deployment to Iraq. When I returned to civilian life and school I was now eligible for Chapter 1607, so I relinquished my remaining 14 months of benefits under Chapter 1606 and now received $690 per month, still topped off with the $350 Kicker, 100% Tuition Reimbursement, and now E-5 monthly drill check. Somehow, I always found a way to spend all of it. It can’t get any better than that right?

I used 13 months of benefits to finish my bachelor’s degree in 2007 and did not give much thought to the remaining months of entitlement. I was unmarried and childless and not giving adequate thought to future planning. I also became a full-time Title 32 Dual Status Federal Technician that year. Although I worked full-time and wore the uniform every day, I was not eligible for the Chapter 30 GI Bill at the time based on my status, although some folks I worked alongside were. I heard mention of the Post 9/11 Veterans Educational Act of 2008, but it sounded like an Active Duty program or a benefit for folks that had deployed much longer than I had, and in my naivete, I did not investigate further.

In 2012 I became a Title 32 AGR and had to make an election within the first two weeks on a DD 2366 on whether I wanted to buy into Chapter 30 MGIB or not. I had no immediate plans to return to school and did not want to pay $100 a month for a limited benefit that I may never use, so I declined it.

In 2013 I was selected for a promotion to a new position as the Retention Office Manager (ROM) for my wing. I would help members with career irritants, explore their career change options, pay them large sums of bonus money, and help them understand and access their educational benefits. I quickly had to become the resident expert on all things GI Bill. I also married the love of my life in 2013, and quickly had to become a future planner!

The more I learned about the GI Bill the greater appreciation I had for how rewarding the benefits could be.  In 2011, the DoD made the determination that Title 32 AGR would now count towards establishing Chapter 33 Post 9/11 GI Bill benefits. This is the only benefit that could be transferred to my dependents, known as the Transfer of Education Benefit (TEB). With my current AGR time and prior periods of mobilization, I would be eligible at the 100% tier. I quickly made the election to relinquish my remaining months of CH 1607 for CH 33. Sadly, I would only have 11 months of entitlement remaining before I reached the 48-month limit. 

Since I was already at 14 years’ time in service, I quickly transferred all 11 months to my wife as soon as she was enrolled under me in DEERS. She is a law school graduate with no plans to go back to school but I wanted to start the four-year service obligation as soon as possible to get it over and done with. We welcomed our twin daughters into the world in 2016. Again, as soon as they were enrolled under me in DEERS I “took back” 10 months of benefits from my wife (she agreed) and gave each daughter 5 months of benefits. There is no new service commitment required, that is a one-time obligation. I now have the flexibility to transfer months between each daughter, my wife, and myself as we play the GI Bill shell game to best meet our needs. Do not wait until your dependent needs to use the benefits. Consider transferring now, even if you are not positive your dependent will use it, you can always pull it back until it is used.

In our fire safe at home, in the “personnel file” for each child I have a copy of the Defense Manpower Data Center letter verifying my approval for the transfer of benefits and obligation end along with my Certificate of Eligibility from the VA documenting my entitlement for 100% tier of CH 33 payments. These are filed right next to their birth certificates and 529 account information for safekeeping until they graduate high school. Again, putting on my ROM hat, don’t just say you’ve transferred your benefits to your dependents – be able to prove it!

What do I wish I could have done differently? Obviously, I look longingly at months of CH 1606 and CH 1607 I used on myself that would be much more valuable had I saved those for CH 33 and transferred them to my kids. Had I known then, I would have paid more out of pocket.  As Brian P. O’Neill, CFP®, often says, “My crystal ball was cloudy” so I made the best decision I could, based on the information I had at the time.

What questions do you need to ask?

If you first enter the military as an enlisted member, CH 1606 is probably the first GI Bill you get familiar with. If you commission after paying for college under your own steam, you could still be eligible for this benefit with a six-year commitment but it might not be as heavily touted – so ask!

If you contemplate your career beyond the initial six, you should start to ponder:

  • Do I anticipate still needing this benefit to achieve my goals? 
  • Will I be able to afford my education plan if I lose access to these benefits upon separation?
  • Do I anticipate accruing active duty periods that might make me eligible for increased benefits under other chapters?

Generally, you can use up to 12 months of this benefit without cutting into the months of entitlement of other programs in the future, so don’t leave money on the table unnecessarily.

If you have deployed or been hired as an AGR you may wonder:

  • Do I need to convert and begin using CH33 now or should I wait until I accrue more duty towards a higher tier?
  • What tuition assistance do I have access to now that will allow me to save up on my VA benefits?
  • Is it a smart play to use months of CH33 while I’m still on orders and receiving BAH?

If you establish eligibility for CH33 and have dependents:

  • How do I think these benefits will be used by my spouse and children?
  • Should I give at least one month of benefit to each dependent to make sure they will have access if our plans change?
  • Will I need to use these benefits for my own use to further my career?
  • Will an even better GI Bill be coming out in the future?

How Do I Explore The Right Strategy For Me? 

As you can see, no two service members will have the same GI Bill scenario 100% of the time. There are a lot of variables that come into play based on the educational goals of you and your family, the benefits you have earned, outside resources, and other planning factors. 

If you need more help understanding how your benefits incorporate into your financial picture and deciding which path is right for you reach out and connect with an advisor at the Military Financial Advisors Association!