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

Nearly 6 in 10 U.S. Army veterans who have taken out student loans cite living expenses, such as housing and childcare, as the main reason for borrowing, according to a first-of-its-kind, representative survey nationwide veterans who took out student loans.

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

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

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

  • 58% of those who took out student loans said they borrowed primarily to cover living expenses. The most frequently cited expenses were housing costs (21%) and day-to-day 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%).

To many, these results may come as a surprise, in part because the post-9/11 GI bill provides a Monthly Housing Allowance (MHA) designed to cover – or significantly defray – the cost of housing while former fighters are enrolled in a college or university. But the results support reports that the cost of living has become “a dominant component of the cost of college” compared to tuition. This is especially the case for older students, such as veterans, who often have to juggle other financial obligations, possibly including caring for children or other family members.

Recent Pew analysis of data from the Federal Department of Education shows that student veterans are twice as likely as the general student population to have dependents of their own, which may increase their living expenses compared to more traditional students.

In the coming months, Pew plans to take a closer look at the detailed data from this unique survey to create a more detailed picture of the scope and magnitude of veteran student loan debt. Future work will dig deeper into specific factors that may be related to this borrowing, such as experiences using the Post-9/11 GI Bill monthly housing allowance, use of other assistance resources financial, socio-economic factors, credit earned 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 through 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 loan research project.

About Judith J. George

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