Pass The Bill or the Troops Get It: Army Abruptly Suspends Tuition Assistance Program
The Army abruptly suspended its popular Tuition Assistance Program, effective Friday, March 8th, citing the combined budgetary constraints of sequestration and the looming potential expiration of the continuing resolution that funds Department of Defense operations and activities only through March 27th. Troops currently in school could finish out their terms, stated Army sources. But no new applicants would be accepted after 1700 Eastern Time on March 8th. (UPDATE: Even if you got in a registration prior to 1700 ET on the 8th, don’t expect it to be funded. An Army spokesperson informed us that funding had already been cut off. – Ed.)
The news came out with less than 24 hours to go before the deadline, and the notice and sent soldiers around the world flocking to computer terminals, trying to get in their applications.
(UPDATE: Even if you got in a registration prior to 1700 ET on the 8th, don’t expect it to be funded. An Army spokesperson informed us that funding had already been cut off. Why the confusion over the deadline? According to the spokesperson, the Army intended to give no notice, specifically to avoid confusion. But Military Times got wind of the impending decision, forcing the Army to go public with the news sooner than they intended, and were forced to rush some of the communications. Hence you had soldiers standing in line trying to get their applications in on Friday. – JVS.)
The news affects all components of the U.S. Army, including the Reserve and National Guard.
The news only affects the federal Tuition Assistance program itself. Other popular veterans and military education programs are not affected at this time. Soldiers continue to pursue their educational goals with VA education benefits, if applicable, that include the Montgomery GI Bill-Active Duty, (Chapter 30), Montgomery GI Bill-Selected Reserve (Chapter 1606, Reserve Education Assistance Program (Chapter 1607), The Post 9/11 GI Bill, federal grants and federal financial aid. National Guard soldiers may also be eligible for state Tuition Assistance benefits.
Last fiscal year, some 201,000 soldiers in the Army alone enrolled in the Tuition Assistance program. The program provided $373 million to soldiers pursuing their educational goals. Using the program, 2,831 soldiers earned associate’s degrees, 4,495 earned bachelor’s degrees, and 1,946 completed graduate degrees. On average, that equates to about $40,229 per degree earned.
The U.S. Marine Corps has also suspended its tuition assistance program, and also announced that the cuts would also interrupt benefits for those already enrolled. The Air Force and Navy have not yet decided to do so, though the Defense Department has urged the service chiefs to consider slashing their funding for the program.
Sailors and airmen interested in participating in the program should enroll now, as the other services will likely follow suit in the next few days.
While troops putting their lives on the line are having their benefits cut, the Government continues to provide for the Lifetime Learning Credit and the American Opportunity Credit – both of which provide a dollar-for-dollar tax credit for attending college to those who meet the strict income thresholds.
Enlisted Ranks Hardest Hit
Nearly all officers already have bachelors’ degrees, though some enroll in the Tuition Assistance program to pursue graduate degrees. Officers who do so incur an additional service obligation, in exchange.
The program has a flat cap of $4,500 per enrollee for all ranks. That $4,500 value is a much greater percentage of compensation for a junior enlisted soldier or NCO than it is for officers. They are less likely to be able to afford to pay out of pocket for their educational expenses than officers. Lower-ranking troops will likely feel more pain from the decision than the officer corps.
The American Opportunity Tax Credit provides up to $2,500 per student each year for up to four years of college, while the Lifetime Learning Credit provides a tax credit of up to $2,000 annually. There is no cap on the number of years a taxpayer can claim the Lifetime Learning Credit. The income threshold for the full American Opportunity tax credit is an adjusted gross income of $80,000 ($160,000 for married couples filing jointly). Your credit amount is reduced for any amount you earn over those thresholds, and disappears entirely for those with incomes of $90,000 for singles and $180,000 for married couples filing jointly.
Most troops can qualify for the American Opportunity Tax Credit (though if all your income is tax-free combat zone income it might not do you much good).
The Lifetime Learning credit is a credit equal to 20 percent of the first 10,000 of qualified tuition. Credit eligibility begins to go away at an income of $47,000 per year for single individuals, and phases out completely at $57,000. For married couples, the thresholds are $94,000 and $114,000, respectively.
Soldiers can also use the GI Bill to pay for higher education courses, rather than tap into TA. However, as the Veterans of Foreign Wars points out, though, Tuition Assistance and the GI Bill have different missions. The Tuition Assistance program was developed to make it easier for discharged servicemembers to integrate into the civilian work force. Congress intended for the GI Bill education funding to benefit troops themselves, personally. The Tuition Assistance Program, on the other hand, was developed to benefit the military – under the assumption that the military would benefit from a more educated force.
In other news, the Obama Administration has announced that it intends to give some $450 million in foreign aid to Egypt. The Department of Defense is also providing matching contributions to civilian DoD employees who make contributions to their Thrift Savings Program. And the State of Colorado is all set to grant illegal immigrants in-state tuition while denying it to out-of-state American citizens and legal residents.