Issues in the Use of Postservice Educational Benefits as Enlistment Incentives

by Richard L. Fernandez


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In 1976, Congress ended eligibility for GI Bill educational benefits for enlistees entering the active military services after January 1, 1977. The GI Bill was replaced with a contributory assistance plan, the Veterans Educational Assistance Program (VEAP). This Note demonstrates the extent of the decline in the present value of benefits resulting from the program change and concludes that the enhancements to VEAP benefits the Army is now offering to certain enlistees should yield only a small response. Alternative incentives should attract more enlistees and be more cost effective. The Note also examines veterans' educational benefits from society's viewpoint and concludes that these benefits can play a valuable role in raising Americans' level of educational attainment. A reform that would make VEAP a more effective recruiting tool is to link benefit payment levels to either the consumer price index or an index of educational costs.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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