The chairman of the House Veterans’ Affairs Committee has dropped plans to freeze Post-9/11 GI Bill living stipends for two years for all beneficiaries in order to protect tuition rates for some student veterans enrolled in private colleges and universities.
Rep. Jeff Miller, R-Fla., now proposes to adjust fees charges on some veterans home loans to cover the anticipated $50 million cost of legislation that would prevent cuts in tuition and fee payments for about 30,000 students on Aug. 1.
The House is expected on May 23 to take up HR 1383, a measure aimed at correcting a problem for private school students in seven states who are using the Post-9/11 GI Bill. As a result of a new $17,500 annual limit on tuition and fee payments for private school students that takes effect Aug. 1, students at some colleges and universities in Arizona, Michigan, New Hampshire, New York, Pennsylvania, South Carolina and Texas could see a drop in GI Bill benefits because their payments would be higher than the cap.
The previous formula, scrapped because it was so complicated, set tuition caps for each state based cost for attending the most expensive four-year public college or university in the state.
Miller’s bill would guarantee that current students would continue to be paid their current tuition and fee rates, while imposing the $17,500 cap on GI Bill benefits for students who enroll in schools after the bill becomes law.
To cover the cost of grandfathering about 30,000 people, Miller initially proposed — and the House Veterans’ Affairs Committee approved — a plan to freeze GI Bill living stipends for all students for two years. But that idea drew sharp criticism from some veterans groups, so Miller will propose amending the bill to cover costs a different way, committee aides said.
The amendment, which Miller filed with the House Rules Committee, makes a change in the Veterans Affairs Department’s home loan origination fee charged to people who have already received one VA-backed loan and are using the program again.
What Miller is proposing is not really a fee hike, but rather a limitation in the size of a fee reduction that is set to take effect on Oct. 1.
Currently, those using the VA loan program a second or subsequent time who do not make a down payment of at least 5 percent pay a loan fee of 3.3 percent of the value of the loan. First-time users of the VA home loan program pay a fee of 2.15 percent.
The 3.3 percent fee was supposed to drop to 2.15 percent Oct. 1, but Miller’s amendment would instead drop the fee to 2.8 percent for one year, through Sept. 30, 2012. After that date, it would drop to 2.15 percent.
The difference between a 2.15 percent and 2.8 percent loan fee amounts to about $3.50 a month per $100,000 of loan, Miller aides said. That would have less of an impact than the average losses of $30 a month in 2012 and $60 a month loss in 2013 that GI Bill students would face if living stipends were frozen for two years.