Air University Review, May-June 1980

The Military and the Civilian Economy
 Since the Loss of the GI Bill

THE purpose of the educational benefit portion of the GI Bin of Rights--to make service in the U. S. Armed Forces more attractive by "extending the benefits of a higher education to qualified and deserving young persons who might otherwise not be able to afford such an education"--was established by Congress.¹ It ultimately helped millions of people achieve vocational and educational status who might not have attained these objectives had they not served their country.

The GI Bill program following the Second World War initially gave one-year educational benefits to all persons serving at least ninety days, regardless of the type discharge. In addition, for time spent in the active force between 16 September 1940 and 25 July 1947, additional benefits accrued up to a total maximum of four years. The Korean conflict G I Bill program gave veterans one and a half months of benefits for each month of active duty served and was designed as a means of vocational readjustment and restoration of lost opportunities to those whose careers were interrupted or impeded by reason of active duty before 31 January 1955. The 1966 law for Vietnam veterans originally gave one-month benefits for each month of service up to thirty-six months benefits.

In 1975 two proposals to terminate the GI Bill and subsequently those benefits described were presented and passed in Congress,² thereby reducing the GI Bill educational benefits to those joining the services after 1 January 1977.

The program at that time was costing approximately $5 billion annually and providing benefits to over two million former service people.³ This became a case of considering subjective needs versus extensive costs during the initial All Volunteer Force period where financial constraints began to take precedence over all other considerations. What the demise of the GI Bill would mean to the socioeconomic balance of the forces, minorities, the sustainability of the All Volunteer Force, the quality of enlisted personnel, educational institutions, and the tax base were all being weighed in terms of pure economics.

One study conducted at that time predicted that the termination of the GI Bill would hinder enlistment incentives which "help insure the ideological socio-economic balance of the all voluntary military period." Based on indicators, the study predicted that one-third of the number of potential recruits who were planning on a college education would not join the military without the availability of these educational benefits. The study also predicted that potential recruits would be dropouts or people with below average high school grades.⁴

In 1977, 43.9 percent of enlistees in the U.S. Army were non-high school graduates.⁵ This appeared to confirm predictions that, with termination of the GI Bill, a decline in recruiting would occur among the white middle-class and suburbanites, while the increases in recruits would be mainly from minorities and youth from the inner city, resulting in a shift in the total balance of the socioeconomic background.⁶ This has subsequently proved to be true, although not documented as being a direct result of the termination of the GI Bill; the perceived or real loss of benefits has been generally blamed for the recruiting problems, and the GI Bill reduction is a prime example.

A wide cross section of people not only provides a socioeconomic balance but also assures a military which, hopefully, will be more responsive and responsible to civilian interests. They are the disabled veterans, the infantry-related personnel, and large numbers of minorities. And, ironically, the minorities have increased in numbers since the termination, many because of poor economic conditions⁷ and the pay incentive, which in fact attracts more of the lesser-qualified youth.

While black representation accounted for 12 percent of the force in the 1960s--a comparable figure to its representation in society--the proportion of blacks has more than doubled since pre-Vietnam days. With the addition of nearly 5 percent Hispanics, approximately 30 percent of today's recruits are from minorities.⁸ And it is these groups that are being most affected by termination of the GI Bill; having been denied ready opportunity, they need access to education the most. To state this Catch-22 situation in yet another way, one-half of the blacks and one-third of the whites who left the service in 1970 were in military occupations that were not readily transferable to civilian jobs. Yet, the demands of their military jobs prevented them from securing additional education while in service.⁹ Although this situation has changed significantly since the end of the Vietnam War, it is still difficult for many military personnel to obtain any formal college-level education before leaving the service.

GI Bill benefits have existed for more than three decades, but it was not until the late 1960s that minorities began to take advantage of these educational opportunities for upward mobility in any significant numbers. Programs that provide educational and upward mobility benefits become critical national measures to combat unemployment and thereby fulfill the original economic readjustment purpose of this legislation. As the services minority population greatly increases, especially in the army, the problem created by the termination of the bill as predicted is exacerbated. For many blacks, the military became an alternative to the streets, despite any inequities that might be felt. The Congressional Black Caucus was clearly sensitive to this pending problem, as all members of the Black Caucus voted against the repeal measure in House Bill 9576, despite the attractive provisions of the total bill.¹⁰

Many people felt that the All Volunteer Force initially benefited from a period of high unemployment and attracted many upward mobile young people who would have sought opportunities elsewhere if they were available.¹¹ The Defense Manpower Commission concluded that "the sustainability of the All Volunteer Force during peacetime will depend upon the economic situation and other interrelated facts some of which--such as public attitudes toward the armed forces--cannot be predicted with any certainty."¹²

The economic situation began to turn around in 1976, and indicators of its subsequent impact have begun to emerge. The employment rate in late 1976 was 7.9 percent. That rate as of March 1978 dropped for the fourth consecutive month to 6.1 percent, the lowest rate since October 1974.¹³ The Congressional Budget Office predicts an unemployment rate of just over 4 percent in 1982.¹⁴ This trend easily raises the question of the ability to recruit for and sustain the All Volunteer Force in a competitive environment, especially when the perceived erosion of benefits begins to take on more of a consequence.

The bill, as a wartime benefit, became a major argument of those wishing to terminate it. The Ford administration, in taking a position against the continuation of the bill, expressed concern that since the war has ended, benefits should also end. They did not consider that today's society is different, as are its needs. The thinking should have changed and recognized the benefits to the total society rather than being tied to historical precedence. Two additional arguments used against maintaining the bill were that significant numbers of people abused the programs and/or left the services solely to take advantage of the educational opportunities. These were minimal management problems and should have been handled as such. They should not have been used as justification for abolishing the program, but instead should have served as incentives to better monitor the enforcement of standards or progress in the program.¹⁵

the GI Bill as an
incentive toward recruitment

From the inception of the All Volunteer Force, numerous studies have been conducted to examine attitudes and incentives for joining the U.S. Armed Forces. These studies generally indicate that a high priority is placed on educational benefits as incentives for recruitment and retention in the U.S. Armed Forces. However, in following the recommendation of the Gates Commission to increase pay as a recruiting tool, the services were faced with the dilemma of "more visible pay" being a double-edged sword. Surveys show that high pay motivates less qualified youth (e.g., high school dropouts, those with poor grades) to join the service.¹⁶

While the GI Bill was not used as a recruiting tool (because its funding came from the Veterans Administration), one study indicates a potential loss of one-third of the potential recruits who plan on a college education.¹⁷ In addition, a 1975 study by the Manpower Research and Data Analysis Center (MARDAC) of 13,000 army people indicated that 21 percent would not have joined the services without the GI Bill, while 12 percent of the group indicated that the college educational benefits were the determinants of why they entered the service. Another army in-house survey of more than 50 percent of the army volunteers indicated that 25 percent would not have enlisted without the GI Bill benefits. While these predictions varied in number, the negative impact of these losses becomes more significant as the numbers grow. Although a 5 percent loss was considered insignificant, losses from 15-30 percent would have several impacts economically and professionally.

Earlier studies such as the Gilbert Youth Surveys and Youth in Transition by Johnston and Buchanan, which were completed in 1970, reached similar findings concerning education as a priority. The Gilbert Youth Surveys found money as an incentive for joining the services to be somewhat higher than education (19 percent compared to 12 percent), but those selecting education as a priority had higher abilities.¹⁸ The University of Michigan study also concurred that those attracted to the services because of the GI Bill are more intelligent, possess greater ability, and have leadership capabilities.¹⁹ The Johnston and Buchanan survey of 1273 men concerning recruitment incentives indicated that 24.5 percent favored paid education as an incentive, a 10 percent higher percentage over pay as an incentive. Additionally, those young people favoring paid education over higher pay scored higher in intelligence tests, occupational ambitions, and self-esteem. Other surveys during that period supported these findings and indicated that those who had selected education and training incentives had a higher propensity to enlist.²⁰ The availability of and possibility of educational opportunities also have a positive impact on reenlistment.²¹

These findings certainly indicated at that time that there needed to be concern about the sustainability of a quality force. This was again substantiated in a 1977 survey which found that the services were facing increasing difficulties in attracting people to enlist.²²

Recognizing that economic inducements are not adequate to recruit a quality manpower force, Charles Moskos proposed the development of a two-year enlistment restricted to the combat arms, heavy labor jobs aboard ships, and other hard duty fields in return for what he describes as generous educational benefits.²³ Essentially this program would offer four years of college in exchange for two years in these hard duty jobs and would also incur a part-time reserve obligation following discharge from active duty service.

Moskos states that "the conditions of Service would be honest and unambiguous, eliminating the 'post-entry disillusionment' syndrome." He is also confident that the reserve commitment will help ease the serious manpower shortage facing the Reserves and National Guard. Moskos indicates that this program would attract the middle class and upward mobile youth who have turned away from the military in recent years. With the growing trend of this particular population to take time off between high school and college, a diversion providing educational returns will be welcome. He also feels that the cost of this "new GI Bill" would be set off by thus reducing the current costs of high attrition and eliminating bonuses as those for combat arms.

Another problem that can be abated through this program is that of quality and education.

The military services must be able to perform their mission fully and effectively. Traditionally, a high school diploma has been a standard of determining quality. The value of the diploma is not simply that it reflects what has been learned; it also shows perseverance in completing a goal and reflects some potential for accomplishment and growth.

With a smaller force, one hopes for an educational level that implies familiarity with the essentials of good citizenship and respect as well as some understanding of the society which the military member serves. Completion of a high school course suggests this kind of awareness. Furthermore, the day of the simple musket is long gone. With constantly increasing technological demands, the military services need personnel with the mental capacity to absorb various types of training on tanks, ships, aircraft, and other weapon systems as well as maintenance training for sophisticated mechanical equipment and automated management systems.

To justify the existence of these standards, many young people without diplomas were given high school equivalency credit through examination. The high school General Educational Development (GED) test was originally designed for the armed forces for this purpose, even though its role has greatly expanded into society. However, the real value of the test concept came under question as it was believed that equivalency tests were being given to meet recruiting quotas rather than to identify qualified non-high school recruits. Thus, the services developed the Pre-Discharge Education Program (PREP) to provide classes for those requiring additional work to finish their high school education.²⁴

PREP, as part of the GI Bill, began for service personnel after they completed six months of service. No charge was placed against a person's entitlement.

The law required that one-half the participation in the full-time program (25 hours) be during duty hours unless the military mission would be negatively affected. The courses were operated by local high schools and colleges on the military bases. In 1975, 28,000 soldiers got their high school diplomas through PREP; and in 1976, at a time when the army had an enlisted force of only 50 percent high school graduates--at the same time they had a goal of 65 percent high school graduates--this vital program was being terminated.²⁵ Now only those enlisted personnel who participate in the payroll deduction plan can participate in the program. In addition, they can do this only during the final six months of their first enlistment, hardly a beneficial time for the services.²⁶ Completion of the PREP program results in a diploma, not an equivalency. This program, of course, suggests a sense of accomplishment, but those with PREP degrees have the same attrition rates as high school graduates; those with GED equivalents have similar attrition rates as non-high school graduates. This is an important consideration when attrition rates are at an all-time high.²⁷

Clearly, the incentives for those with high school diplomas to enter the service would diminish with the termination of the GI Bill, but to what extent, no one could truly predict.

The Quality Soldier Study also found that educational levels impact on the following factors and by so doing have further economic ramifications on services by their having to accept a less educated force:

• loss rate in training,
• loss rate in self-paced instruction,
• loss rate in accelerated promotion in training,
• higher disciplinary problems and loss rates in units,
• lower leader performance in units, and . poorer job proficiency in units.²⁸

As it seemed apparent that armed forces personnel would be of reduced quality with the termination of the GI Bill, there was also a need to examine the economic strain on the defense budget and the educational institutions themselves.

With the termination of the GI Bill, more demand was placed on the already strained DOD Three-Quarters Tuition Assistance Program. During the early '70s, the Defense Department spent more than $80 million a year for this program (including overhead). The army, the service most heavily dependent on civilian schools, provides DOD funding to its officers at the graduate level only if they have used up their GI Bill benefits. The latter is the more popular of the two programs as there is no payback and all tuition costs are paid. Without those benefits and with more emphasis on partial funding to meet the services' increased educational requirements, it is obvious that the DOD tuition assistance program quickly became overburdened due to the already limited funding. In IT 1974 alone there was a 15 percent increase in enrollments for those using the GI Bill, despite force reductions at that time. The use of the GI Bill was at an all-time high in November 1974.²⁹

The American Association of Community and Junior Colleges recognized the unique problems of the mobile armed. forces and the high level of training and education internal to the services and, in cooperation with the Defense Department, established the Servicemen's Opportunity College (SOC) in 1973. This program was designed to adapt a mobile military career pattern to a traditionally inflexible academic credit transfer and residency requirement system. This program met with great Success and was extended to four-year schools through the American Association of State Colleges and Universities and thirteen national associations of higher education. By 1976, there were 159 community colleges and 176 four-year schools participating in the consortium.³⁰

These institutions, along with the colleges, universities, and 172 regional and national educational associations, expressed grave concern over the effect the termination of the G I Bill as an entitlement would have on the national goal of equal educational opportunities, recognizing that G I Bill benefits account for over 30 percent of all federal funds for student financial assistance. Also, in a period of spiraling costs for education, many institutions are facing more demand from their students for financial aid, or they are having to compete with paying students. Therefore, loss of these funds will have a harmful effect on the stability of higher education.

Fifteen percent of American college and university students were receiving veterans' benefits. In addition, schools receiving state funds usually are budgeted based on either the full-time equivalent (i.e., a student who enrolls in 15 semester units), individual headcount, or a combination of the two. Thus, any termination of the GI Bill could gravely affect them. Since the full loss will not be realized until veterans no longer have funding from the GI Bill, it is difficult to anticipate the negative results. In fact, because of time limitation for using these benefits, there may even be an upsurge of GI Bill use in the near future.^3l

At the present time, many students still eligible to use the GI Bill educational benefits are being driven in their choices for education by the great differences in tuition rates of colleges and universities. While some college students on the GI Bill can cover almost all their expenses, others are precluded from attending the more prestigious, independent, and private institutions because their benefit entitlement would cover only a small portion of the fees.³² This results in many students attending schools of lesser quality or their not being able to meet the gap between costs and income. For others choosing state community colleges, a better economic situation exists. Thus, states such as California are benefiting economically by receiving a much higher share of money, with as many as 53.9 percent of the state's veterans using the benefits. On the other hand, Massachusetts, with a great number of private institutions, has only 29.9 percent of the veterans using their benefits.³³

With a fairly equal distribution of people eligible for G I Bill benefits, some states are getting a disproportionate share of the funding. Of the $5 billion spent in 1976 for scholarship benefits to veterans, $3.6 billion went to individuals and institutions in the South and West. At the same time, unemployment rates in the Northeast and to a lesser degree in the Midwest have been above the national average while the Southern and Western states have begun to pull out ahead. This, of course, raises the question of whether the GI Bill is to provide opportunities for the individual, the institution, or the state.³⁴

Finally, recent statistics indicate that for every dollar spent on the G I Bill, at least $3 and as much as $6 were returned to the government in the form of higher taxes paid by those with more education whose careers were greatly improved because of this education. A statement recognizing the impact of reduced tax revenues, entered into the Congressional Record on 19 February 1974, noted that "veterans using the G I Bill return to the federal treasury more than the nation invests in them to pay for the 36 months of college. "35 Of Vietnam veterans, who have experienced excessively high unemployment rates, 83.1 percent who have completed training with GI Bill benefits prior to June 1973 are employed in the same field as their training or are using their training beneficially.36 This again confirms that there are economic benefits to using the bill.

IN SUMMARY, the GI Bill educational benefits have had far-reaching consequences that go beyond those directly serving in the armed forces by touching every aspect of today's society. It is predicted that in giving up these benefits, higher education and society itself are negatively affected. Already, at one end of the pipeline, the armed forces' recruiting effort is affected by the demise. There is no indication of the impact at the other end since veterans are still using their benefits and will continue to do so for some time. Finally, there is yet another underlying question as to how our democratic society can sustain a quality yet socioeconomically balanced All Volunteer Force while providing opportunities for upward mobility in society in return for serving one's country.

l. Title 28. Chapter 34 of U.S. Code (Section 1651).

2. The passage of S1805 before Senate Committee on Veterans Affairs and HB9576 in the House brought forth Public Law 94-502, which changed the eligibility benefits after 31 December 1976.

3. Cecile Landrum, "The G.I. Bill Today," Defense Manpower Commission, Staff Studies, volume IV, May 1976, p. 2.

4. Institute of Social Research, University of Michigan--1976 study on the GI Bill.

5. Department of the Army statistics on accession.

6. Institute of Social Research, University of Michigan--1976 study on the GI Bill.

7. Charles Moskos, "The Enlisted Ranks in the All Volunteer Army." to be published in White Burkett Miller Center of Public Affairs, University of Virginia, Military in American Society study, Spring 1978, p. 55.

8. Ibid, p. 8.

9. Taken from Market Facts, Youth Attitude Tracking Study (Chicago: Market Facts, 1977), p. 126.

10. See House Vote HB9576, 1976.

11. Employment and Earnings, Bureau of Labor Statistics, January 1976.

12. Defense Manpower Commission: "The Keystone to National Security," April 1976.

13. Employment and Earnings, Bureau of Labor Statistics, January 1976 and March 1978.

14. "Defense Manpower Compensation Issues for FY 1977," Congressional Budget Office, Background Paper #6, April 2, 1976.

15. Landrum, p. 4.

16. Charles Moskos, "Military Compensation and the Military Institution," February 1978.

17. Quality Soldier Study, TRADOC, Volunteer Army Division, May 14, 1975, Section 10.

18. These surveys were covered extensively in articles by Andrew Dougherty and William L. Buesse, "Educational Incentives: The Critical Element to the Success of the All Volunteer Force," and H. H. Fisher, Jr., "Attitudes of Youth Toward Military Service."

19. Institute of Social Research, University of Michigan—1976 study on the GI Bill.

20. Dougherty and Buesse, "Educational Incentives: The Critical Element to the Success of the All Volunteer Force."

21. Personnel Survey, conducted in-house by DOD, OASD/M&RA, 1973.

22. Charles Moskos, "The Enlisted Man . . ." in reference to Market Facts, p. 12.

23. This section is based on a discussion "A New GI Bill" from the article "The All Volunteer Force" by Charles Moskos, The Wilson Quarterly, Spring 1979.

24. Public Law 91-219, March 26, 1970, established the PREP program. Public Law 92-540, October 24, 1972, authorized an outreach program to encourage enrollment into PREP and authorized release from duty time for atleast 2½, hours required to complete the program.

25. Department of the Army Statistics.

26. Title 38, U.S. Code, chapter 32.

27. The concern for the high attrition was the subject of a conference, "First Term Enlisted Attrition," April 4-7, 1977, sponsored by the Navy Manpower R&D Program of the Office of Naval Research.

28. Quality Soldier Study, TRADOC, Volunteer Army Division, May 14, 1975, Section 10.

29. DaD Statistics OASD/M&RA, Education.

30. Ibid.

31. By law, no entitlement may he used beyond ten years after the veteran returns to civilian life or the enactment date of the legislation, whichever comes last.

32. The subject of inequity of benefits is addressed in bills HR2231 and HR8419 pending before the 95th Congress and discussed before the Subcommittee on Education and Training, Committee on Veterans Affairs, House of Representatives, September 15 and 16, 1977.

33. Ibid.. p. 196.

34. Ibid., pp. 311-12.

35. Testimony of Dr. John O. Edison, Vice Chancellor, University System of Georgia. for the United States Senate Subcommittee on Readjustment, Education and Employment of the Committee of Veterans Affairs, October 2, 1975.

36. Veterans Administration. Completion Rate Study, June 1976.

Cecile S. Landrum (B.A., Boston University) is attached to SAF/OSX. She was a manpower analyst, Assistant Chief of Staff, Studies and Analysis, Hq USAF, and served two years as staff member of the Presidential Defense Manpower Commission. She has also served on the staffs of Senator Henry M. Jackson, Speaker of the House Thomas P. O’Neill, and Boston Mayor Kevin H. White. Mrs. Landrum is a previous contributor to the Review. She is a graduate of the Industrial College of the Armed Forces.

Disclaimer

The conclusions and opinions expressed in this document are those of the author cultivated in the freedom of expression, academic environment of Air University. They do not reflect the official position of the U.S. Government, Department of Defense, the United States Air Force or the Air University.

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