By Watson Scott Swail, President & Senior Research Scholar, Educational Policy Institute

On a day where we take time to remember the service members who sacrificed for our countries, it is an appropriate time to talk about how we repay them. The GI Bill has been seen as a critical safety net for our military men and women when they return from service. The GI Bill, created in 1944 by Congress as the Servicemen’s Readjustment Act, has been tweaked over the years, with a major reform in 2010.

Exhibit 1. The poppy is the emblem for Remembrance Day in both Canada and Britain, and emanates from the Poem, In Flanders Fields, written by Lieutenant Colonel John McCrae of the Canadian Expeditionary Forces in 1915. McCrae, a medical doctor, died in Belgium in 1918. Click here for a video reading of the poem.

The GI Bill came about in the midst of the World War II, when there existed great worry about what would happen to the millions of returning veterans from Europe and the Pacific. A White House Agency, the National Resources Planning Board, estimated that 15 million veterans would be unemployed after the War, plummeting the country into another major depression. They had good reason to be concerned. While most people are cognizant of the Great Depression in the 1930s, they are less aware of the depression of 1920-21, which was caused, in part, by the return of troops from the First World War in Europe. To this day, the 1920-21 18-month depression resulted in the largest one-year deflation in the history of the United States. The Dow Jones lost half of its value during that period. Although the US recovered and history documents the “roaring 20s,” the crash of 1929 brought the US and the world to its knees.

During World War II, Congress was right to be concerned, and they were interested in taking proactive action to ensure the aftermath of World War I would not happen again. After all, the Great Depression of the 1930s was lifted, in large part, by the large investment of manufacturing and personnel supported by the US Government. Some economists say that if Roosevelt had injected higher levels of investment earlier in the 1930s the Depression would have eased. And while World War II managed to pull the US out of the Depression, the huge expansion of US military forces created greater potential for a devastating depression.

 

Exhibit 1. First Page of the Original Act (click on graphic for larger pdf version)

 

 

Exhibit 2. Signature Page of the Original Act (click on graphic for larger pdf version)

In January of 1944, the first version of the GI Bill was introduced in Congress and both the Senate and House unanimously approved their versions on June 12 and 13^th, respectively. The final version was signed into law by President Roosevelt on June 22.[1] (See Exhibits 1 and 2 above).

Most of us think of the GI Bill as an education bill, but it was an economic bill that had education as part of the solution. The primary components of the bill included low-interest, no money down housing loans for veterans, which resulted in a housing boom in the late 1940s and 50s—The Baby Boomer Years. A second component was the 52-20 rule, which gave unemployed veterans $20 a week for a full year while they looked for work. Although $20 doesn’t sound like much, it is akin to $270 today, or about $1,200/month in government subsidy. In the end, only a fraction of the funds made available for this program were used due to the massive job growth that propelled the US to the top of global industry and manufacturing. In 1938 unemployment in the US was 19 percent; the rate declined to less than 4 percent after the conclusion of WWII.[2]

The education component of the Bill, known as Title II, provided up to $500/year for tuition, books, and other sundries, plus a maintenance grant of $50/month for students without dependents or $75/month for those with dependents. In today’s dollars, this amounts to over $6,600/year and either $661 or $992/month.

Between 1944 and 1951, over 8 million veterans utilized the education provisions of the GI Bill, and the number of college degrees doubled between 1940 and 1950.[3]

The GI Bill evolved over the years, with a notable expansion in 1984 that became known as the Montgomery GI Bill, named after former Mississippi Congressman Sonny Montgomery, a gentleman I had the privilege of knowing several years ago in Washington. Congressman Montgomery passed in 2006. The Montgomery GI Bill provided more funds in tuition, fees, and living expenses, as well as other vocational benefits.

In 2008, The Post 9/11 Veterans Educational Assistance Act of 2008 updated the educational benefits, and in 2010, benefits were made transferable to spouses and children, dependent on the number of years of service.

For our Canadian readers, Canada created a similar plan to the US plan in 1945, called the Veteran’s Rehabilitation Act (VRA) that demonstrated similar outcomes.[4] By 1946, 45 percent of all Canadian post-secondary students were veterans.[5]

Something to think about on Veterans Day in the US and Remembrance Day in Canada.

 

Here are a few websites and videos worth a look:

1. A 1944 Social Security Bulletin about the GI Bill: http://www.ssa.gov/policy/docs/ssb/v7n7/v7n7p3.pdf

2. A video of the pre-game tribute by the Toronto Maple Leafs, November 9, 2014. Worth watching: https://www.youtube.com/watch?v=U71qbJw5qjw

3. A short video of former Tonight Show Co-Host Ed McMahon about his experience and the GI Bill: http://www.history.com/topics/world-war-ii/gi-bill/videos/ed-mcmahon-and-the-gi-bill

 

Endnotes

[1] http://www.ssa.gov/policy/docs/ssb/v7n7/v7n7p3.pdf.

[2] http://www.infoplease.com/ipa/A0104719.html.

[3] http://www.ourdocuments.gov/doc.php?flash=true&doc=76.

[4] http://www.nber.org/papers/w6718.pdf.

[5] http://xcan.wordpress.com/govt/veterans-rehabilitation-act/.