New GI Bill too popular for the Pentagon's own good?

Veterans are scrambling to sign up for a generous new GI Bill, accepting a nation's collective thanks for serving in the military since 9/11. But there are questions about whether the government's magnanimity will create a military exodus.

Since May 1, more than 25,000 veterans have signed up for the new GI Bill, which will pay 100 percent of in-state college tuition, housing, and other expenses. When the Department of Veterans Affairs (VA) opened the online registration site two weeks ago, the system crashed from the weight of interest. The stream of applicants has been steady ever since.

The concern is that the program could be so enticing that many service members will leave the military to go to school. "Some observers believe there is going to be a giant sucking sound from a large number of individuals saying, 'Why wouldn't I go to college, this is a great opportunity,' " says Cindy Williams, a security analyst at the Massachusetts Institute of Technology in Cambridge. "I would say nobody knows – in particular, the VA doesn't know and the Department of Defense doesn't really know."

The new GI Bill is an overhaul of the original 1944 law that was responsible for sending a generation of veterans to college. It will not replace the World War II-vintage bill, known as the Montgomery GI Bill. It is an additional offering by the VA.

The new bill is proving more popular, though, because it pays the full cost of tuition for public undergraduate schools. The Montgomery bill pays a flat rate. This bill will cost taxpayers $62 billion during the next decade as it aims to reward some of the 2.1 million veterans who served any time after 9/11 for at least 30 days.

The VA points to Mike Dakduk as a poster boy for the program. He enlisted in the Marine Corps in 2004 after traveling from Nevada to see the remains of the World Trade Center. Inspired to serve by the destruction he saw, he enlisted in New York City. His four years in the Marines included a tour in Iraq followed by another in Afghanistan.

Now, he is studying public policy at the University of Nevada, Las Vegas. The government is already picking up some of his expenses, because he is on the old GI Bill. But when the new one kicks in on Aug. 1, the federal government will pay all his tuition, as well as a living allowance of as much as $1,400 per month – in a city where he now pays $600 per month to live.

"This is probably one of the most beneficial benefits packages. This is a major breakthrough," he says.

He thinks the program may encourage some to get out of the service to attend school, like he did. But others will want to stay in the military. A Marine buddy, for example, opted to stay in the corps, because he liked his life there.

"For me, it was education, for him it may be continuing down the path he was on in the military," says Mr. Dakduk.

But Dakduk adds that he may yet return to the service: When he gets his degree in two years, rejoining the corps as an officer is among his top three choices. "I had a great time in the military," he says.

Pentagon personnel officials won't have a sense of the impact of the new GI Bill until a few months after the Aug. 1 start date, when trends should become clearer. But one provision added to the bill could encourage members of the military to remain in the force for at least one more four-year term. If they do, they can transfer the benefits of the GI Bill to an immediate family member. The provision gives veterans 36 months of benefits that can be divided among a spouse and children.

In addition to improving retention, the transferability clause of the GI Bill could also be a strong recruiting tool.

"The GI Bill, as we see it, will be a net positive for retention," says Bill Carr, deputy under secretary for military policy at the Pentagon.

About 88 percent of service members who participated in a Pentagon survey about the GI Bill say the transferability option is "important," says Mr. Carr.

The GI Bill comes at a time when the effort to recruit and retain troops is in flux. All four services are meeting or exceeding their active-duty recruiting and retention goals this year. But cost-cutting at the Pentagon could undermine those successes, because recruiting and retention rates are buttressed by billions of dollars in bonuses.

On the other hand, recruiting always improves during hard economic times as military jobs become more desirable. That has reduced the need to spend so much money on recruiting and retention. Military pay also has kept military service attractive, increasing by more than 28 percent since 2001.