The real tax on troops

A recent blog post by the Consumer Financial Protection Bureau (CFPB) highlights an alarming trend as recruits join today’s All-Volunteer Force. According to CFPB, during last fiscal year, 70 percent of new recruits paid into the Department of Veteran Affairs’ (VA) Montgomery GI Bill (MGIB) program:

“New data from the Department of Defense reveals that last fiscal year 70% of new recruits (over 112,000 recruits) still pay the $1,200 to buy into the MGIB, even though they likely qualify for the more generous Post-9/11 GI Bill for free. 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.”

{mosads}Those who sign up for MGIB agree to have their pay reduced by $100 over 12 months with that money accumulating in DoD’s coffers. As the blog points out, it’s not easy to get that money refunded and it rarely happens. Never mind the fact there’s a maximum time limit of 10 years to use it upon separating.

MGIB is an education benefit from the Jurassic-era of federal programs. It’s at least three generations old.  Established in 1984 it has since been surpassed in use and financial payout by the Post-9/11 GI Bill and Forever GI Bill. VA projects that by fiscal year 2019 only 27,000 trainees will be using MGIB compared to nearly a million using the Post-9/11 GI Bill.

Yet, recruits still pay into it which begs the question: why are recruits still being encouraged to pay into a program created when Indiana Jones and the Temple of Doom came out in theaters?

The author provides a novel alternative by investing that money into a Blended Retirement System, but that doesn’t account for those who’ve already paid in and either passed the time limit or never qualified for a refund. 

What Congress can do is sunset MGIB and properly end it. Any funds still in DoD’s coffers can be put back into the pockets of our nation’s warriors, or invested back into sustaining VA programs like upgrading information technology infrastructure for processing GI Bill enrollments.  

Doing so will send a message that it’s time to stop steering recruits into an obsolete program. We can teach them the benefits of an education and how they are more likely to succeed academically in school using the Forever GI Bill which Congress passed this summer and doesn’t have a time limit for use. DoD a excels at turning recruits into warfighters. Now they have an opportunity to create warrior monks.

Barrett Y. Bogue is Vice President for Public Relations and Chapter Engagement at Student Veterans of America. Barrett is a former Marine and Presidential Management Fellow. Will Hubbard is Vice President of Government Affairs at SVA, is a currently serving Marine Corps Reservist, and deployed last year to Central America.