Time for a New GI Bill?

Charles Schelberg might never have gone to college were it not for a rush of government generosity more than 60 years ago. Born into a family of fishermen on Maryland's Eastern Shore, Schelberg joined the Navy in World War II and spent two years aboard a destroyer escort in the Pacific. By the time he returned home in 1946, his father had died of pneumonia and the family financial situation, not good to begin with, had grown worse. Schelberg, now 82, says it was his luck that while he was at war Congress had passed legislation known as the GI Bill (officially the Servicemen's Readjustment Act). It paid full tuition for veterans at any public or private university along with housing, books and a $50 monthly stipend. "It was like pennies from heaven," he says. In three years, he got a bachelor's degree at Washington College in Chestertown, Md., and was earning more than his father ever had.

Until President Franklin Delano Roosevelt signed the GI Bill into law, America had almost never treated its vets well. Just a decade earlier, Congress refused to approve bonus payouts to veterans of World War I made poor by the Great Depression. When 20,000 of them marched on Washington in the summer of 1932, President Herbert Hoover sent troops (led by Douglas MacArthur) to burn down their tent encampment. Roosevelt, in a 1943 fireside chat, harked back to that confrontation and vowed new vets wouldn't face the same hardships. "They must not be demobilized into an environment of inflation and unemployment, to a place on a bread line, or on a corner selling apples." The GI Bill he pushed through a year later, in addition to paying for college, provided vets with low-interest mortgage loans and help finding jobs.

Now Americans are once again coming home from war, and Schelberg's grandson is among them. Matthew Schelberg enlisted in the Marine Corps Reserves in 2001 and took part in the invasion of Iraq two years later. He spent six months south of Baghdad and returned for a second tour in Haditha that ended earlier this year. Like his grandfather, Schelberg went from an overseas deployment to a college classroom. But as he studies at Bucknell University, the debt piles up. Schelberg's GI Bill, a scaled-down version of the original, pays less than one tenth of his university and housing fees, which come to $46,000 a year. By graduation, he expects to have taken out $60,000 in student loans.

Is it time for a new GI Bill? Veterans of the wars in Iraq and Afghanistan face so many other difficulties, it's hard to imagine the government's making their college subsidy a priority. Huge numbers suffer from brain injuries and emotional trauma and aren't getting enough care. The Veterans Affairs administration, which handles health benefits and disability payments, is underbudgeted by the Bush administration and oversubscribed. Even some advocates of better vet care question if the government has the same moral obligation to volunteers in today's military as it did to draftees six decades ago. Yet the argument for a new contract with troops sheds light not only on the way it might resolve some veterans' woes but on some of the military's (recruitment, for example). And its promoters say it might re-infuse America with the sense of possibility that followed World War II. "President Bush keeps talking about these people as the next Greatest Generation," says Sen. Jim Webb, who fought in Vietnam and whose son recently returned from service in Iraq. "All I'm saying is, let's give them the same educational chance that the Greatest Generation had."

The impact of the GI Bill after World War II is difficult to overestimate. Eight million returnees from war got a college education or vocational training on the government's dime. Universities that were traditionally elitist and often discriminatory handed out twice as many degrees in 1950 as before the war. With their college diplomas and their homes in the suburbs, vets helped form the country's middle class and its new cadre of achievers. Fourteen of them went on to win Nobel Prizes and three became presidents (Gerald Ford, Jimmy Carter and George H.W. Bush).

Since then, the story is best illustrated by two crisscrossing lines on a graph: one marks the decline in GI benefits, the other the rising cost of college tuition. Congress voted on the current version of benefits, known as the Montgomery GI Bill, in 1985, when the military was on a peacetime footing. "It was designed as a recruitment incentive, a little bump," says Webb. "Not as a wartime benefit." Active-duty GIs contribute $1,200 to their fund in the first year of service and get a $9,900 subsidy for each of their four years at college (reservists like Schelberg get less). The amount is sufficient to cover in-state tuition at most public universities but leaves little for housing and other costs. It puts private universities beyond reach.

Webb wants to raise the annual allowance to about $22,000—enough to pay tuition and housing at any public university and to provide vets with a decent living expense. A bill he introduced almost a year ago is languishing in committee, in part because the Bush administration opposes it. Last month two Pentagon officials appeared at the committee to explain how the bill would hurt the military. While it would attract recruits, they said, retaining them would be more difficult. "There's a fragile balance here," says Curtis Gilroy, a Pentagon recruiting-policy director. "If the benefit is too large, many troops will leave the military after their first term."

Webb estimates the extra benefits would double the annual price of the GI Bill from $2 billion to $4 billion. Can we afford it? Congressional staffers say the perception on Capitol Hill is no. "It's a great bill, everyone loves it, but it's really too expensive to get out of committee," says one aide who declined to be named so as not to embroil her boss in the argument. Others take a longer view. Jerome Kohlberg, an 82-year-old financier and GI Bill recipient who last week launched a fund to help Iraq vets get through college, believes America wouldn't have prospered had it not been for the government program. "We would have been a moribund country stuck in the mud," he says. Joseph Stiglitz, the Nobel Prize-winning economist from Columbia University, says the government made back its GI Bill investment several times over by getting more money in taxes from vets who increased their earning power with college educations.

That was the case with the elder Schelberg. After getting an economics degree, he found himself on a park bench one day next to the director of the only bank in Queenstown, Md. "He told me he was retiring," says Schelberg. "Then he asked me if I wanted to take his job." Schelberg was suddenly managing four people and on his way to a prosperous banking career. He was 25 then, the same age as his grandson now. With the high cost of tuition, Matthew Schelberg also sees banks in his future. But for different reasons.