Using Corporate Education Benefits and the Montgomery GI Bill

I love the GI Bill. It’s a great program, and one that I have used to help achieve my degree, as well as take additional courses. If you are eligible for GI Bill benefits, I highly recommend using them to help you achieve your personal, professional, or educational goals. The Montgomery GI Bill can be…
Advertising Disclosure.

Advertiser Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone. This article may contain links from our advertisers. For more information, please see our Advertising Policy.

default image

I love the GI Bill. It’s a great program, and one that I have used to help achieve my degree, as well as take additional courses. If you are eligible for GI Bill benefits, I highly recommend using them to help you achieve your personal, professional, or educational goals.

The Montgomery GI Bill can be especially valuable if your employer offers education benefits since the MGIB is paid to you, and not the school. I have a friend whose company paid for his MBA while he pocketed his MGIB benefits, earning over $1,300 a month in the process. His company didn’t have any policies against this, and neither did the GI Bill. What he did in this instance was both allowed, and ethical.

But some companies are tightening their purse strings, and removing this loophole in order to cut down on their expenses. And that brings us to today’s situation, which is a reader question we received.

Should You Use Employer Education Benefits or the GI Bill?

Q: I am currently employed by a company that offers educational assistance. Typically we could use our Montgomery GI Bill and still receive this corporate benefit. Since the new GI Bill was introduced, they have updated the corporate policy to state that those using GI Bill aren’t eligible. My question is, can they really do that? I can understand making that stipulation for people using the Post 9/11 GI Bill, but the Montgomery GI Bill is a whole different animal. Any input is greatly appreciated.

A: Great question, and to be honest, I am not aware of any laws that would prevent a company from doing this, since company educational benefits are voluntary. Personally, I don’t agree with it – I believe companies should treat all of their employees the same way and offer them the same benefits. But on the other hand, I understand that companies offer educational benefits as a bonus, and not a right. For example, many companies limit tuition assistance benefits to certain degree programs, or require the benefits only be used for a higher level degree than you have (for a master’s when you already have a bachelor’s, or a doctorate when you already have a master’s).

So where does that leave you? Well, you need to make a decision regarding which benefits to use.

If you are using the Montgomery GI Bill it’s possible you could double dip since the GI Bill benefits are sent to you and not to the school or the company. Quite frankly, there is no way for the company to know whether or not you are using the GI Bill. But the problem with that is it is dishonest if it goes against company policy and it could be grounds for dismissal from your job, or the requirement that you reimburse the company for the cost of the benefits you used. And even if you don’t get fired, chances are high that you would be on the short list from there on out.

In other words, I wouldn’t chance it.

My recommendation is to look at both your GI Bill benefits and your company’s benefits, and see which one is more valuable to you. In some cases, the company benefits will be more valuable, especially if you are only going to school on a part time basis and receiving partial MGIB benefits. Using your company benefits would also allow you to preserve more of your GI Bill to use in the event you exhaust your company benefits or if you leave your current job.

There are a few other considerations to account for before deciding which benefits to use: taxes, employment obligations, and GI Bill benefits expiration.

GI Bil benefits are not taxable, but employer education benefits can be taxable once you reach a certain point. Employers are allowed to provide up to $5,250 in tax-free educational benefits to their employees. Any employer sponsored tuition assistance above that amount is considered income by the IRS. So you may consider using partial GI Bill benefits and partial employer tuition assistance if you can find a way to use both and stay within your company regulations. For example, you didn’t state you couldn’t use employer educational benefits if you eligible for the GI Bill, just that you couldn’t use them both at the same time. So it may be possible to use employer benefits up to the taxable limit, then switch over.

Additionally, you may incur an employment obligation with your company if you use their tuition assistance benefits. So if you believe you may be ready to move on to a new company after you finish your current degree plan, you may wish to use your GI Bill instead, even if it offers slightly less benefits overall.

Finally, keep in mind that the Montgomery GI Bill expires 10 years after you leave active duty service. You can get a Montgomery GI Bill refund under certain circumstances, but it requires you to transfer to the Post-9/11 GI Bill and exhaust those benefits. If you are running up on your expiration date for the Montgomery GI Bill, then consider transferring to the Post 9/11 GI Bill if you are eligible. These benefits expire 15 years after you leave active duty service.

Get Instant Access
FREE Weekly Updates! Enter your information to join our mailing list.

Posted In:

About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

Reader Interactions

Leave A Comment:

Comments:

About the comments on this site:

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

The Military Wallet is a property of Three Creeks Media. Neither The Military Wallet nor Three Creeks Media are associated with or endorsed by the U.S. Departments of Defense or Veterans Affairs. The content on The Military Wallet is produced by Three Creeks Media, its partners, affiliates and contractors, any opinions or statements on The Military Wallet should not be attributed to the Dept. of Veterans Affairs, the Dept. of Defense or any governmental entity. If you have questions about Veteran programs offered through or by the Dept. of Veterans Affairs, please visit their website at va.gov. The content offered on The Military Wallet is for general informational purposes only and may not be relevant to any consumer’s specific situation, this content should not be construed as legal or financial advice. If you have questions of a specific nature consider consulting a financial professional, accountant or attorney to discuss. References to third-party products, rates and offers may change without notice.

Advertising Notice: The Military Wallet and Three Creeks Media, its parent and affiliate companies, may receive compensation through advertising placements on The Military Wallet; For any rankings or lists on this site, The Military Wallet may receive compensation from the companies being ranked and this compensation may affect how, where and in what order products and companies appear in the rankings and lists. If a ranking or list has a company noted to be a “partner” the indicated company is a corporate affiliate of The Military Wallet. No tables, rankings or lists are fully comprehensive and do not include all companies or available products.

Editorial Disclosure: Editorial content on The Military Wallet may include opinions. Any opinions are those of the author alone, and not those of an advertiser to the site nor of  The Military Wallet.