A large majority of new service members are spending $1,200 on a veterans education benefit they will never use.

Military service branches automatically enroll their recruits in a decades-old GI Bill either during, or soon after, boot camp, even though modern-day service members can get a newer, more comprehensive version of the benefit ― without spending a dime.

Recruits can opt out if they choose, but, according to a recent analysis of federal data, 70 percent of them don’t.

The newer Post 9-/11 GI Bill, which troops don’t have to pay for, covers all standard, in-state tuition costs at public universities, plus a housing stipend paid to the student that is nearly as valuable and as much as $1,000 extra for books each year. The older Montgomery GI Bill is much less generous, except in rare cases.

Yet nearly three quarters of recruits pay $1,200 to be eligible for the Montgomery GI Bill.

“This means that new enlistees and newly commissioned officers spent over $134 million last year to buy into a GI Bill benefit they will probably not use,” the CFPB analysis said , citing Defense Department data from last fiscal year.

The percentage of new recruits enrolled in the Montgomery GI Bill, established in 1984, varies by service branch. According to the CFPB, the Navy had the largest percentage of new recruits signing up for the Montgomery GI Bill at 76 percent, followed by 74 percent of new soldiers, 70 percent of new airmen and 64 percent of new Marines. Among new Coast Guard members, that figure was much lower, at 13 percent.

But even as the majority of new recruits were opting for the benefit — or forgetting to opt out — and agreeing to pay $100 each month for their first year in service, fewer veterans were using it. Usage of the Montgomery GI Bill declined by 23 percent between fiscal 2015 and 2016, according to Veterans Affairs Department data. Meanwhile, the Post-9/11 GI Bill had hundreds of thousands more users, and the number of beneficiaries remained relatively unchanged.

On average, the Post-9/11 payment per beneficiary in fiscal 2016 was more than $14,000, compared to less than $8,000 for the under the Montgomery GI Bill benefit, VA spokeswoman Tatjana Christian said in an email.

The number of Montgomery GI Bill users per fiscal year has sharply declined since the Post-9/11 GI Bill benefit went into effect in 2009. Source: Department of Veterans Affairs
The number of Montgomery GI Bill users per fiscal year has sharply declined since the Post-9/11 GI Bill benefit went into effect in 2009. Source: Department of Veterans Affairs

Air Force spokeswoman Capt. Kate Atanasoff said in an email the service is working on an update to the way it trains airmen in GI Bill benefits. Come January, recruits will need to opt in to the Montgomery GI Bill to be enrolled — rather than having to opt out in order to avoid being enrolled.

Across all service branches currently, new service members get a DD 2366 form to fill out, which states that they are automatically enrolled in the Montgomery GI Bill unless they choose to decline the benefit.

The amount of time they have to decide varies by service, but new sailors have just two days to sign the form, while new soldiers have three.

Will Hubbard, vice president of government relations for Student Veterans of America, finds such time limits problematic. At boot camp, he said, education benefits are not troops’ No. 1 focus.

“The real question, I believe at this point, is why DoD is still telling and directing recruits to pay into the benefit,” Hubbard said.

DoD deferred to the VA when asked for comment on this story.

Public affairs officers for the service branches said new recruits are not steered toward a particular benefit.

“Servicemembers are not persuaded to choose one program over the other but are provided explicit details of what each program offers,” said Coast Guard spokeswoman Lisa Novak.

The same is true for new sailors, said Lt. Commander Katherine Meadows of Naval Education and Training Command. “Our goal is to ensure that they have all necessary information in order to make the best decision for them and their families.”

But a PowerPoint presentation given to new Army recruits presents the options to new soldiers this way: The Montgomery GI Bill is a one-time offer. Opting in means you have a choice of benefits down the road.

One slide states, “After declining MGIB, you cannot change your mind.” The word “cannot” is underlined for emphasis.

If service members do not sign this DD 2366 form by their service's deadline, they will begin paying $1,200 for the Montgomery GI Bill with a $100 deduction in pay each month during their first year in the service. Representatives for the Air Force provided Military Times an older version of this form that does not include information about the Post-9/11 GI Bill.
If service members do not sign this DD 2366 form by their service's deadline, they will begin paying $1,200 for the Montgomery GI Bill with a $100 deduction in pay each month during their first year in the service. Representatives for the Air Force provided Military Times an older version of this form that does not include information about the Post-9/11 GI Bill.

Besides the $1,200 price tag on the Montgomery GI Bill benefits, there are other distinct differences between the two education benefits.

The Montgomery GI Bill pays a set monthly amount directly to eligible veterans for 36 months, at a current full-time rate of $1,928 per month. Those monthly benefits can increase if service members opt to make an additional $600 contribution, above the initial $1,200 investment.

The Post-9/11 GI Bill covers full tuition and fees for 36 months at the in-state tuition rate for public schools, or up to $22,805.34 annually at private schools for service members who are fully eligible for the full benefit. While this money is paid to the school, the service members also receive a large housing stipend and money for textbooks.

The Montgomery GI Bill is good for 10 years after a veteran’s release from active duty. Under a recent change to the Post-9/11 benefit, new recruits who go on to use the benefit have no expiration date.

“For most participants, the Post-9/11 GI Bill is the best option,” the VA’s Christian said. “But in certain limited circumstances, the (Montgomery GI Bill) may be better.”

A veteran with a full scholarship attending school at half-time or less who would not qualify for the monthly housing allowance could fall into this category, she said.

Steve Clair, deputy chief of continuing education at Army Human Resources Command, also gave the example of someone who lives in a state that offers full tuition benefits for veteran students. In these situations, service members could end up pocketing more each month by using the Montgomery GI Bill.

The majority of recruits who buy into the Montgomery GI Bill benefit don’t end up using it, and, in many cases, they never see their $1,200 again. Service members who choose to go the Post-9/11 route are eventually eligible for a refund from the VA, calculated by dividing their unused Montgomery GI Bill benefits by 36 months, then multiplying that number by 1,200. The $600 fee for increased benefits is nonrefundable.

Veteran education advocates like Hubbard have proposed ending the Montgomery GI Bill all together.

“We haven’t seen any movement on this just yet. Obviously the data is still fresh and still new,” Hubbard said, adding, “It’s something that we suspected for a long time.”