Recruit, Reward, Retain

By Lieutenant Commander Brendan R. Stickles, U.S. Navy

A G.I. Bill for those who have given so much to our country, often including repeated combat tours, should be viewed as an obligation. We must put together the right formula that will demonstrate our respect for those who have stepped forward to serve in these difficult times. First-class service to country deserves first-class appreciation. 2

What Senators Hagel and Webb may not have anticipated was that the national show of “appreciation” may have driven Lieutenant McAndrews out of military service and replaced him with a person of equal rank but inferior experience. Their proposed bill evolved into HR-2642, officially the “Military Construction and Veteran’s and Related Agencies Appropriations Act.” High-profile objections from the Defense Department, President George W. Bush, and Senator John McCain (R-AZ) were assuaged with the inclusion of a “dependent transfer option” to offset retention concerns. Service members who agreed to serve for four additional years could transfer the G.I. Bill benefits to their spouse after six years of service and to a child after ten years.

The bill was initially funded by a .47 percent increase on high-net-worth taxpayers, but the Senate removed that provision and replaced it with the simple clause that the funds to pay educational assistance will be “otherwise made available.” With that, HR-2642, known better as the Post-9/11 G.I. Bill, passed in the House with a vote of 409 to 2 and in the Senate by a resounding 92 to 1. 3 Proponents compared the legislation to the original post–World War II G.I. Bill, which provided an education to millions of the “greatest generation” and helped usher in a new era of economic prosperity.

However, unlike the postwar legislation it was modeled after, HR-2642 was written without a deadline. The estimate of $18 billion over five years blossomed into a $30 billion payment in just over four. Current events necessitate immediate changes. The drawdown of standing forces, current fiscally constrained environment, the changing requirements of the all-volunteer force, and the generational transformation of the American public requires evolution of the law and its implementation. Targeted legislation, combined with modernized active-duty use will make sure that post-9/11 commitments are honored, while concurrently recruiting and retaining the talent and experience required for future operational success.

The Bill’s Precedents

As the United States’ gross domestic product bottomed out in the summer of 1932, 17,000 veterans from the Great War marched on Washington, D.C. Their primary demand was full payment awarded by the “World War Adjusted Act of 1924,” which allotted bonus compensation based on the number of days served. However, the combination of a 20-year payout plan and mass national unemployment galvanized the former soldiers in protest. The standoff ended when U.S. troops were dispatched to remove the veterans from the National Mall. The Great Depression continued without any resolution for the largely overlooked population of veterans who had been discharged with nothing but $60 cash and a train ticket home.

In the wake of World War II, the U.S. government vowed not to make the same mistake. The Serviceman’s Readjustment Act of 1944 had three purposes. First and foremost, the act recognized that the transition to civilian life after wartime service required education, training, and monetary compensation. Second, it helped soften the economic consequences of a reduction in military acquisition and employment by decreasing the job-seeking population. Finally, it served as a vehicle for social progress and economic mobility by providing educational opportunities to veterans who otherwise would never have dreamed of college.

Introduced on the House Floor on 10 January 1944 and in the Senate the following day, the G.I. Bill, as it went on to be called, was signed into law on 22 June 1944 by President Franklin D. Roosevelt. By 1956, almost half of the 16 million World War II veterans had used its education funding. At its peak in 1947, 49 percent of American college students admitted were veterans of the war.

The G.I. Bill had a significant economic effect on the population. 4 Higher education, which before 1940 had been mostly reserved for privileged Americans, opened to previously disadvantaged groups. Recipients included future Presidents Gerald Ford and George H. W. Bush; Supreme Court Chief Justice William H. Rehnquist and Justice Byron R. White; Senators Bob Dole, John Glenn, and Daniel Patrick Moynihan; and, after later conflicts, entertainers Johnny Cash, Clint Eastwood, and Paul Newman. 5

America would go on to fight wars in Korea and Southeast Asia without overhauling or reinstituting the G.I. Bill. An opportunity returned in 1984 when Mississippi Congressman Gillespie V. “Sonny” Montgomery, himself a World War II Army veteran, revamped the bill for peacetime. The “Montgomery G.I. Bill” was in effect on 3 January 2007, when former Secretary of the Navy Jim Webb was sworn in as the Democratic senator from Virginia. His first piece of legislation was SR-22. Opposition from both President George W. Bush and the Department of Defense thwarted the bill’s progress, but its major provisions were written into HR-2642. The Post-9/11 G.I. Bill finally went into effect in August 2009.

While Veterans Administration expenditures have drastically increased since Fiscal Year 2002, education spending vastly outpaced any other line item. Since 2002, total spending increased by 162 percent, despite a 14 percent decrease in the number of veterans. Medical care and compensation also increased by 142 percent and 151 percent, respectively. However, “Education & Vocational Rehabilitation/Employment,” which in 2002 was $1.9 billion, ballooned up 528.77 percent to $11.9 billion in 2013. That is the equivalent annual cost of one new aircraft carrier, or six weeks of war in Afghanistan. 6

Retaining Top Talent

By 2011, Lieutenant Brendan McAndrews was a naval aviator with 11 years of experience. He was eligible for the Aviation Continuation Incentive Program after concluding his two-year duty deploying with Special Forces. At 33 years old, he was more than halfway to retirement and in the midst of a distinguished career.

Financially, his options were twofold. First, he could remain on active duty and keep his current salary, with an additional bonus of $25,000 a year. With tax exemptions for allowances, this would equate to a comparable civilian salary of approximately $136,000, with a commitment of five years. 7 However, his commitment extensions would likely result in an additional nine years of service instead of the required five, since the military retirement “cliff-vesting” system rewards 20 years of service with immediate lifetime pension.

McAndrews’ second option was to forgo the bonus and leave the service. Under the G.I. Bill he could receive an advanced degree for minimal out-of-pocket cost and without tax repercussions, because the tuition payments are made directly to the school. Under the living stipend provision he received an “E-5 with dependent” housing allowance for the location of the school, which on the island of Manhattan was $2,900 per month for a total payout of $58,000 over 20 months. Forbes magazine recently valued the average total cost for a top business school at $102,255. 8 At the end of the day, Lieutenant McAndrews was presented with a bonus offer of $125,000 to stay in the Navy or a $160,000 incentive to get out.

Even forgoing the opportunity cost of two years’ salary and the potential of retirement pay, his decision was financially sound. The same Forbes article estimates that graduates from the top business schools (Columbia University is ranked eighth in U.S. News & World Report ’s 2015 rankings) can expect to make between $5 million and $8 million over the course of a 40-year career, compared with only $2.3 million for their counterparts with a bachelor’s degree. 9 Considering the added $1.2 million expected value of a military retirement, business school is a good financial decision.

“I didn’t get out because of the G.I. Bill,” McAndrews insisted, “but it made the decision to get out easier. It nullified any financial decision to stay in, and made the idea of getting an expensive graduate degree after turning 30 more reasonable.” He isn’t alone in making that assessment. Outside of the active-duty ranks, similar changes are evident. “The G.I. Bill has had a clear effect in the top MBA programs,” said McAndrews, who was active in the student veteran organization. “Prior to 2009, Columbia Business School had about five to seven veterans out of each class. It now has over 25. The numbers at other programs are similar.”

Recent literature demonstrates similar retention shortfalls in the U.S. Army. A July 2013 article by the Strategic Studies Institute and the Army War College recognized a significant shortfall of officers between 9 and 16 years of service. 10 Only after 18 years of service, when required inventory tapers significantly and inventory remains constant due to the “cliff-vesting” retirement system, do the officer requirement and inventories correspond.

In his article “Keep A Weather Eye on the Horizon,” U.S. Navy Commander Guy Snodgrass summarizes the misaligned goals of retention quality:

A four-star admiral speaking at the January 2014 Surface Navy Association conference commented that “We don’t have a retention problem,” sparking many in the audience to wonder about the quality of his staff’s fact-checking. The reality is, however, that his comments were largely correct—if you define retention as the ability to simply fill the number of required job billets with a body. . . . Our manning system tends to focus heavily on the quantitative needs of the service at the expense of retaining the right officers. 11

Recruiting Potential

After peaking post-9/11 at 570,000, the Army’s troop numbers are scheduled to drop in the coming years to as low as 440,000, its smallest force since 1940. 12 This reduction creates the opportunity, and necessity, to improve the quality of recruits to correspond with and compensate for the decreased quantity.

As we maintain our current levels of readiness, we are recruiting a generation of soldiers that will be in leadership positions during our next conflict. As former Undersecretary of Defense for Policy Michele Flournoy remarked in a 2014 Economics of National Security discussion at Harvard University, “Any drawdown of forces requires a disproportionate amount of leadership training and retention, assuring the future capability of quickly ramping up the force in order to meet any unforeseen challenges.” 13 A smaller pool of people, still capable of meeting future leadership challenges, must be better skilled than their predecessors, who joined from a larger group of recruits.

The selectivity opportunity created by a reduction in force, the increasingly complex and technological nature of warfighting, and the likelihood that today’s recruits will be in leadership positions during the next major conflict, all necessitate an improvement in the quality of our enlisted force. Unfortunately, for a variety of reasons, and despite the recent improvement in caliber of enlistees, there is a correlation between states with high rates of military service and a low caliber of high-school education programs.

According to a 21 April 2014 article in U.S. News & World Report , the states with the best high-school programs are Maine, California, Connecticut, Massachusetts, and Maryland. 14 Maine is the only one of those states with a military enlisted recruit ratio commensurate with its population. When broken down by region, the correlation is starker. The Northeastern states have the greatest underrepresentation of recruits. Unfortunately, according to the same article, they also have the best high schools.

In the simplest terms, if you join the military today and serve for three years, you receive a free college education. Next time you watch television, pay attention to military advertising. The G.I. Bill is a $12 billion compensation that is never mentioned—not in a single commercial.

For-Profit Colleges

While the Navy forgoes recruitment opportunities, some businesses are successfully exploiting increased education benefits. After 2009, for-profit colleges quickly capitalized on the increase in available federal dollars. A 2013 congressional study found that 37 percent of G.I. Bill benefits went to for-profit colleges and 8 out of the top-10 receptions of VA education funding were private companies. 15

Many schools have put the majority of their marketing resources into recruiting and enrolling students eligible for VA benefits. They have also adjusted their tuition to match the maximum allocation. The solicitations often look like official Navy websites and pander to the fear of expiration and growing distrust of policymakers.

In 2013, an organization called “Student Veterans For America” conducted a study referred to as the “Million Veterans’ Project.” They looked at the success rates of veterans enrolled in post-secondary education from 2002 to 2010. The post-secondary degrees they sampled ranged from a certificate to a doctorate. They found that of the entire population of veterans (788,915 sample size) who enrolled in a post-secondary program, slightly more than half—51.7 percent—attained a degree. Of the veterans who did, in fact, earn a degree, 71 percent attended public schools. 16

Current fiscal constraints require regulated and efficient investment in veteran education. In theory, for-profit colleges could improve educational opportunities for veterans with increased convenience, the flexibility to retain outside employment, and online courseware. Congress must require that companies be held accountable for providing a quality education in exchange for federal funding. The metrics that define success must be based on outcome, not inputs. Without mitigating the profiteering opportunities and mandating a return on G.I. Bill investment, the prevalence of for-profit colleges siphoning VA education dollars without an appropriate return exposes the legislation to unfair criticism and decreased funding. Federal law and regulations currently do not align the incentives of for-profit colleges and G.I. Bill expenditures.

Continuing Education

Today’s technologically sophisticated and exacting jobs and smaller force size require a well-educated and diverse fighting force. In 2015 there are several ways that someone on active duty can receive DOD financing for education. In 2013 the Navy published its 2014 post-secondary education vision, the goal of which was “to provide the foundation to sustain our technological advantage and develop the skills to plan for and operate the Navy of the future while eliminating strategic and operational energy vulnerabilities.”

The FY 14 plan provides over 1,550 funded opportunities for degree and non-degree programs across the full spectrum of communities and ranks that include 480 quotas at naval postgraduate school, 145 quotas at top civilian universities, 220 quotas at the Naval War College, 225 quotas at Joint and other service colleges, and 70 quotas for fellowship and training with industry opportunities. 17

As of 7 May 2014 there were 53,240 officers in the Navy on active duty. Last year, fewer than 3 percent of them were enrolled in a funded education program, and only .2724 percent of them were offered funded education opportunities at a civilian institution. 18

What Must Be Done

Today’s military faces significant challenges. Following the tradition of Congressman Montgomery, minor legislative changes can empower the active-duty force to recruit and retain a motivated, upwardly mobile, and well-educated force.

Solidify Commitments: The political polarization, persistence of “continuing resolutions,” sequestration, and wavering commitment to current benefits foster a “use-it-or-lose-it” environment. A clearly defined “grandfather clause” for all service members currently on active duty would alleviate the pressure they currently experience to exit the service as soon as possible to secure benefits prior to their removal.

Separate Expiration from Funding: Drop the “Post-9/11” title from the G.I. Bill; it must continue to work as recruiting and retention tool for the peacetime military. Establishing a time frame, removing the reference to combat requirements, and a transparent evaluation of the cost will improve recruitment and retention.

Demand Accountability: The combination of federal student loans and G.I. Bill funding accounts for a significant portion of the federal budget. For-profit institutions must be held accountable for transparency, productivity, and results.

Add Incentive: Simplify the transferability rules and regulations to incentivize retention. A legal guarantee that 12 years of service secures all current G.I. Bill benefits to any future dependent would motivate those most likely to leave the service.

Recruit: With modern demographic tools and an increased necessity for a skilled workforce, the military can solicit a highly qualified generation of warfighters. A stable and sustainable G.I. Bill will permit the DOD to properly advertise the social mobility and opportunity that active-duty service provides.

Retain: There are not enough funded education billets. With very little investment and minor cultural compromise, the G.I. Bill can provide educational opportunities for our active-duty service members without driving the best officers out of the military. For example:

• Have community managers adjust career tracks to allow service members to get a master’s-level education while remaining on active duty and achieving career milestones.

• Double the funded education programs so that 6 percent of the active-duty officer corps is enrolled in a full-time master’s program. Provide relocation assistance and pay in exchange for G.I. Bill use.

• Allow and encourage “education sabbaticals” for anyone who is admitted into a one-year master’s program. In the past two years, a Navy SEAL and a fighter pilot were the first Harvard graduate students to earn a master’s degree on the G.I. Bill while on sabbatical— at no cost to the Navy . Both returned to active duty. Expansion of the “Career Intermission” program will cost the Navy almost nothing. Properly used, it can have a significant effect on retaining the millennial generation by fulfilling their expectation of advanced education opportunities.

Reward: The small number of men and women who serve in our all-volunteer force deserve financial support as they transition out of uniform. If properly implemented, today’s G.I. Bill will bolster the economy, provide for economic and social mobility, and compensate those who have, as President Obama said, “Put their very lives on the line for America, and borne the responsibility of war.” 19

Since World War II, the G.I. Bill has provided veterans with education as both a reward for service and as a social investment in America’s future. The United States must continue the tradition of funding veterans’ training and transition. However, the military cannot afford to spend $11 billion a year on programs that fail to recruit the top talent. The active-duty force cannot accept our top performers leaving for civilian education opportunities. The services must concede that the new generation of warfighter has a different career vision and an expectation of a diverse education. Small cultural changes will allow improvement in our capabilities and foster top talent retention.

With proper legislative commitment and active-duty execution, the G.I. Bill can be used as a tool to improve and refine our nation’s professional military force.

1. H. Pulizzi, “Obama Hails Post-9/11 G.I. Bill as a Reward for Veterans,” The Wall Street Journal . 3 August 2009.

2. James Webb and Chuck Hagel, “Post-Iraq G.I. Bill,” The New York Times , 11 September 2007, ?.

3. Ravi Shankar, “Post 9/11 Veteran’s Educational Assistance Act of 2008.” Harvard Law Journal on Legislation . vol 46, no.1 (January 2009).>.

4. “Education and Training.” History and Timeline , Veteran’s Administration Website,> .

5. Suzanne Mettler, “How the G.I. Bill Built the Middle Class and Enhanced Democracy.” Scholars Strategy Network , .

6. “A new way forward: Re-thinking U.S. strategy in Afghanistan,” A New Way Forward . .

7. Calculated via the DOD website: . Additional $25,000 bonus and $,7200 flight pay.

8. “Grad School: Still Worth the Money?” Forbes , 5 April 2012, .

9. Best Business School Rankings, U.S. News & World Report , .

10.> .

11. CDR Guy Snodgrass, USN, “Keep a Weather Eye on the Horizon: A Navy Officer Retention Study.” .

12. Thom Shanker and Helene Cooper, “Pentagon Plans to Shrink Army to Pre-World War II Level,” The New York Times , 23 February 2014, .

13. Michele Flournoy, Former Undersecretary of Defense, “Economics of National Security,” talk delivered 11 February 2014 at Harvard University.

14. U.S. News & World Report , .

15. .

16. Press Releases. SVA Releases Findings from the Million Records Project . .

17. .

18. .

19. H. Pulizzi, “Obama Hails Post-9/11 G.I. Bill.”

Lieutenant Commander Stickles is a naval aviation and the prospective Executive Officer of Electronic Attack Squadron 130 (VAQ-130). A 1999 graduate of the U.S. Naval Academy, he has an MA in business administration from the University of North Carolina and an MA in public administration from Harvard University. He has logged more than 2,500 flight hours and 350 traps in EA-6B, F/A-18E/F, and EA-18G aircraft.


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