There are two major issues which will affect the GI Bill’s monthly housing (living) stipend in 2011. The first is a decrease in the DoD’s Basic Allowance for Housing payment rates which will go into effect on Jan. 1, 2011. Fortunately this change in BAH rates will not affect current Post-9/11 GI Bill students because of a clause called “individual rate protection.” This clause simply states that anyone currently getting the BAH at a given level will be “grandfathered” or protected from decreases until they are reassigned. The VA has interpreted this to mean veterans are protected until they disenroll, change schools, or programs. But before you let out a sigh of relief, there’s more.
The second event which will likely affect every veteran using the Post-9/11 GI Bill is the recently passed Post-9/11 Veterans Education Assistance Improvements Act of 2010. If signed into law, these changes will go into effect on August 1, 2011. Here is a quick look at the pros and cons of the changes that will directly affect the monthly housing stipend if the bill is signed by the President:
Con – Prorated Payments – The monthly housing stipend will be prorated based on your “rate of pursuit” (the number of course hours/credits taken). For example a half-time student will receive 50 percent of BAH for their location; a three-quarter time student will get 75 percent of the BAH for their location, etc…While this change is fiscally smart, it will result in a reduction in benefits for many veterans.
Pro – Eligibility to Include Distance Learners – “Distance learners” who are taking 100 percent of their classes through online, correspondence, etc, will be eligible to receive 50 percent of the national average for BAH (forecast to be $673.50 for 2011) – which will also be prorated to the rate of pursuit. This change goes into effect on Oct. 1, 2011 and is not retroactive. Some may complain that it is not the full stipend, but the truth is, given the current fiscal situation, this may be the best we can hope for.
Con – Break Pay Gone – Break or interval pay is no longer payable under any VA education benefit program unless emergency circumstances exist, for example catastrophic conditions or national emergency.
Pro – Equalizes Voc-Rehab – The new law will enable disabled veterans who are entitled to assistance under the Voc-Rehab (VR&E) program and are eligible for the Post-9/11 GI Bill, to opt for the P911 Housing Stipend in place of the VR&E subsistence payment.
Unlike the annual adjustments to BAH payment rates, individuals will not be protected from changes due to prorating the stipend or the elimination of break pay. This means that most vets will see some change in their housing stipend come next fall.
Unintended Consequences and Collateral Damage
Virtually everyone using the Post-9/11 GI Bill will be adversely affected. The changes to the housing stipend calculation will mean that before making payments the VA must calculate each student’s payment based on three factors – their eligibility tier, rate of pursuit, and BAH locality rate. Rumor has it that it will take the VA at least 18 months to update their automated claims processes. This will surely cause a slow down in GI Bill processing time.
Just like the original Post-9/11 GI Bill, the VA will not be given enough time to properly respond and make the changes needed in time for the August 1 deadline. Some at the VA are predicting an administrative nightmare next fall – you can count on it.