July 26, 2022

GI Bill Benefits and Accrual Schedule


The Post 9/11 GI Bill is a great benefit for service members. It allows them to earn a monthly housing stipend (BAH) while having the government pay up to $26,000 per academic year in qualifying tuition for up to 4 academic years. Further, members may transfer this benefit to their dependents (spouse and children) to be used years down the road. Understanding this benefit is a crucial part of understanding the complete military compensation package, especially for service academy and ROTC graduates that are looking at separation after their commitment is over.  

What Benefits Pay For:

  • 4 academic years (36 months) of benefits if you qualify for 100% benefits:
  • Tuition and fees at any public school or up to $26,381.37 at a private school per academic year effective Aug 1, 2022. This can be for an undergraduate or graduate degree, vocational/technical training, entrepreneurship training, flight training, test fees, co-op training, work study and even correspondence or online training.
  • Yellow Ribbon Program: If you are using a 100% GI bill benefit, many schools are part of this program where they pick up most or all of the remaining costs beyond the $26,381 benefit at a private school. This is how you may have heard of kids going to get Harvard MBAs for free and this is a crazy benefit if you can pull it off. This makes 8 years of service more attractive for a service academy graduate.  
  • Monthly Housing allowance for an E-5 based on the zip code you are in. This can range from $1,200 to $2,700. If you attend a 100% online school, you will receive half the average stipend.  
  • Book and supply stipend: $1,000 per year  
  • One-time relocation allowance: benefit of up to $500  

Accrual of Benefits:  

The below table and graph sum up not only how benefits are accrued, but also the estimated marginal benefit per month, based on the maximum tuition benefit and the housing stipend in Colorado Springs, CO:  

Breakout of GI Bill Benefit Accrual by Months of Service

Monthly Marginal GI Bill Benefit Accrual by Months of Service

How you interpret the above is the monthly benefit earned for each month of service within that time period. So if you do 3 months (or technically 90 days), every month is worth over $30,000, but additional service to 6 months only brings an additional $6,113 of benefit for each month. The interesting thing about the above graph is that the marginal benefit of additional months of service diminishes drastically after the first 3 months of service, and then a little more after 6 months. The first few months of qualifying service are so fruitful in this case. This is important to know as a service member who has just entered the service or a service academy graduate who has completed their commitment but is considering separation soon after. Completing just a few more months of service can bring immense financial benefits if you are pursuing education after your military career. If you do 3 more years past your initial commitment and use a Yellow Ribbon program, your compensation for this service could be somewhere around $300k+. It's important to have awareness of this accrual and what you may or may not be leaving on the table by separating.  


The key thing here is that you need to transfer benefits to each dependent while you are in service to get them in the system. The application for transfer is linked here. You cannot add additional dependents after you separate, but if they are in the system with at least a month of benefit each, you can change your GI bill benefits anytime. Once you transfer your benefit, you incur a 4-year Active Duty Service Commitment (ADSC). In practice, this is why many service academy and ROTC graduates make their last big decision around the 11-12 year mark. This is after a 4-5 year commitment from school, 3 years to gain 100% GI bill, and 4 years for the transfer to dependents.  


There are all kinds of nuances out there to the GI bill and endless information on the internet, I just wanted to hit the highlights and focus on the marginal accrual of benefits at different months of service.  

  1. Know your benefits and be aware of when you separate and how much money you may be giving up  
  2. Be aware of the timeline for transfers to beneficiaries  
  3. Utilize the Yellow Ribbon program if possible when attending private school.  
  4. Benefits can be used by you or spouses to attend any class and collect E-5 BAH. This can be $2,000 or more per month.  
Start planning for financial freedom today.

Hop on a 30 minute call to talk about your situation, and we will help you make an educated decision about your next steps, regardless of it is moving forward with our firm or not.

Schedule a Call