Why veterans on GI Bill benefits continue to take out student loans

Nearly 6 in 10 U.S. military veterans who have taken out student loans cite living expenses, such as housing and child care, as the main reason for borrowing, according to a nationally representative survey, the first like, from veterans who took out student loans.

The survey, conducted for The Pew Charitable Trusts among veterans who served after September 11, 2001, sheds light on a key mystery: why so many people incur student debt when they have access to strong benefits from the post-9/11 GI Bill, which covers full tuition and fees at public universities and at least a portion of tuition and fees at private universities. These benefits also include allowances to cover books and supplies, as well as housing allowances.

A separate Pew analysis done earlier this year using data from the US Department of Education found that just over a quarter of undergraduate program veterans had taken out loans, with a median amount of $ 8,000 during the 2015-2016 academic year.

The survey questions were designed to give a better idea of ​​how veterans use the borrowed money, including a request for a classification of expenses covered by student loans. Among the main conclusions:

  • 58% of those who took out student loans said they borrowed mainly to cover living expenses. The most frequently cited expenses were shelter costs (21%) and living expenses, such as groceries and child care (17%). (See Figure 1 for details.)
  • 42% cited education expenses as the main cost they borrowed to cover. Most chose tuition and fees (36%), while a small proportion chose books and supplies (6%).

For many, these results may be surprising, in part because the Post-9/11 GI Bill offers a Monthly Housing Allowance (MHA) designed to cover – or significantly defray – the cost of housing while veterans are enrolled in a college or university. But the findings support reports that the costs of living have become “dominant components of the cost of a college education” relative to tuition. This is especially the case for older students, such as veterans, who often have to juggle other financial obligations, including possibly caring for children or other family members.

Pew’s recent analysis of data from the Federal Department of Education shows that veteran students are twice as likely as the general student body to have dependents, which may increase their living costs relative to students. more traditional.

Over the next few months, Pew plans to take a closer look at the wealth of data from this unique survey to create a more detailed picture of the extent and magnitude of veterans’ student debt. Future work will delve into specific factors that may be related to this borrowing, such as experiences of using the GI Bill Post-9/11 monthly housing allowance, use of other financial aid resources, socio-economic factors, credits obtained for military skills. and knowledge, and other relevant issues.

This analysis is based on data from an online survey conducted by Penn State’s Clearinghouse for Military Family Readiness on behalf of The Pew Charitable Trusts. The nationally representative survey of 3,180 veterans was open to respondents from November 14, 2020 to January 5, 2021. The margin of error with design effect for the total sample is plus or minus 1.9 percentage point at the 95% confidence level.

Phillip Oliff is a Director, Scott Brees is an Officer, and Richa Bhattarai is an Associate with The Pew Charitable Trusts Student Loans Research Project.

About Judith J. George

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