Tuesday, August 4, 2009

Post 9/11 GI Bill: MBA Fact and Fiction

Update 2012: Click here for a 2012 update on the Post-9/11 GI Bill for business school. 

The original article follows...

It is the finally the official start of the Post 9/11 GI-Bill, and I am still trying to differentiate fact and fiction. Now that the facts are getting clearer, the GI Bill is becoming more and more of a disappointment if one wishes to attend HBS. It appears that because of the language of the bill, one will actually receive more tuition assistance at an overall lower cost school than one will at Harvard. Support for other schools can range significantly. I'll explain...

The GI Bill pays for two categories: tuition and fees. While these are often grouped together, they are in fact two separate accounts. Many public schools keep tuition rates artificially low, and hide the costs in "fees." If you are reading this, you probably already know that the GI Bill is supposed to pay up to the maximum in-state public school tuition plus fees of the state to which you plan to go to school. So let's look at Massachusetts as an example.

In Massachusetts, the most expensive in-state public school is University of Massachusetts at Amherst, and it lists its tuition/fees at $11,732. So how much do you get for HBS? Well, the University apparently only charges $71.50 per credit hour because most of the costs are in "fees." HBS counts as 16 credit hours per term, so one receives 16 x $71.50 for tuition assistance per semester at HBS. That's $1144 in tuition assistance per semester with 100% coverage of the new GI Bill. HBS tuition by the way, is $46,150. As you can imagine, I was rather disappointed to find this out. There is of course housing allowance on top of that, Yellow Ribbon program for those who qualify, and "fees" that get covered on top of tuition. I compiled a list of top 20 schools and calculated everything based on my best understanding of the bill. Please note the following figures are based on my own personal research, and you should follow up with the VA and your school of choice to verify any changes and complete accuracy.

UPDATE 8/31/09: VA raised its Massachusetts tuition credit from $71.50 to $330. This reflects an increase from $1144 in tuition assistance to $5280 per term. Updated numbers are reflected below.

What about the extra "max fees" per term? Well, Massachusetts max fees are $17,787 per term. However, since HBS has relatively low fees (most of the cost is in tuition), you get only the Program Fee, Analytics Support Fee, and Health Insurance covered. That's still a lot better than nothing, but the rather complicated framework of the GI Bill will definitely benefit some schools over others (based on their geographic location and finance structure).

If you do not qualify for 100% of the GI Bill, take the percentage you do qualify for and multiply that by the "1 year total w/o Yellow Ribbon" column below. If you qualify for 100%, you can generally count on the total amount in the far right column. This information is not official and is just based on my personal research...

If anyone has an update to the above numbers or corrections, please let me know and I will update the tables. The Yellow Ribbon program numbers were taken off the VA web site, and it's possible it's not completely updated.

There is one additional benefit to consider, and that is the school "fees." Most likely, all or most of your school "fees" will be covered, but you can check the coverage here to make sure. HBS charges approximately $9,000 a year in fees (including health coverage), so you can add that to the benefit numbers. Fees, as separate from tuition, are not normally broken down on school web site, so contact the school of your choice for specific details. As a rule of thumb though, school fees for top MBA school will probably be in the $3000-$10000 range. These fees will therefore in general be covered in addition to the benefits listed above.

Update (12/29/2010): Update GI Bill number for business school