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Report: Veterans Who Use GI Bill Have Lower Incomes After College Enrollments

By Derek Newton
Reposted from Forbes, with permission.

The post-9/11 GI Bill (PGIB) is an enormous and generous education benefit package aimed at getting veterans into and through college. According to the authors of a new report published in the National Bureau of Economic Research (NBER), its annual price tag is more than $13 billion, which is more than all the grants and scholarships provided by all the states combined. They say it represents half of total Pell Grant spending.

They also say the program isn’t working.

For example, years after accepting the benefits of the PGIB and enrolling in college programs, the incomes of the veterans in the program are actually lower than if they’d not gone to college at all. That emerging reality is driven in part by the poor quality of the for-profit colleges many veterans are choosing – programs and degrees that, even when completed, return little to no value.

On the surface, the failure of for-profit colleges and programs is not news. Nonetheless, the new report by researchers from Texas A&M University, the University of Michigan, Dartmouth College, William & Mary, and the U.S. Department of the Treasury has some jarring findings.

First, the headline. The report says flatly, “the PGIB reduced average annual earnings nine years after separation from the Army by $900 (on a base of $32,000).” When your annual income is $32,000, losing nearly a thousand dollars is a big deal. Worse, the report says, “Under a variety of conservative assumptions, veterans are unlikely to recoup these reduced earnings during their working careers.”

The researchers say that the loss of income stems in part from loss of work experience while in school, the relatively low-skill levels and weak educational foundations of some veterans as well as increased enrollments in heavily-marketed, low-return for-profit colleges.

Those factors tend to overlap. Veterans with low skill levels are more likely to enroll in bad for-profit options, compounding their deficit. Quoting the report, “less advantaged veterans – those in ‘lower-skilled’ military occupations and those with lower AFQT scores – are more likely to enroll in college overall, but this is largely driven by increased enrollments in for-profit institutions. These veterans also experience larger negative earnings effects.”

In addition to earnings, the PGIB fault line between for-profits and public schools also shows up in degree attainment, where the report finds, “positive effects for those enrolled in four year public and community colleges, and negative effects for those enrolled in for-profit institutions.” The report also finds that, “longer-term labor market returns depend on the extent to which the resulting periods spent enrolled represent high-quality investments.”

In other words, if veterans make good educational choices and avoid the bad, mostly for-profit programs, they’re more likely to see a return on their investment of time and our collective investment of money. Unfortunately, those wise choices within the PGIB appear to be lacking. “Those who made their enrollment decisions after the expansion of [PGIB] benefits appear to have made less productive investments, with a greater probability of for-profit enrollment and a lower likelihood of degree attainment conditional on additional enrollment,” the report says.  

It’s a political wonder why policy leaders allow veterans and others to make “less productive investments” with tax dollars. If we all know where the pitfalls are – and we do – there is no reason we should continue to allow anyone, veterans especially, to be pulled into them. It’s not good for them. And it’s not good for taxpayers.

On the topic of bad for taxpayers, the report also says that the “implied average cost” for every marginal bachelor’s degree the PGIB produces – a degree that would not have been earned without PGIB benefits – is between $486,000 and $590,000.  

That’s beyond irrational.

If this paper’s findings are accurate and substantiated, it’s difficult to say the PGIB is succeeding at its mission – helping veterans improve their post-service lives by delivering the benefits of college. It is at least not doing that well, or efficiently.  

“This is sad to say, that the GI Bill does not work for many servicemembers, veterans and their families. What’s even sadder is that if you drill into the data, to the institutional and program level, it will likely be worse. There are many programs, for-profit and non-profit, that do not work out for servicemembers, veterans, and their families,” said Dahn Shaulis, a long time observer of veterans’ educational benefits and programs.

That is sad to say. It’s downright depressing that it will probably continue to be that way.

Originally posted on Forbes on July 30, 2021.