Championed by The American Legion and signed into law in 1944, the original GI Bill offered more than just education, giving returning veterans low-cost mortgages, a year of unemployment pay and other benefits. And the Legion was among those supporting the Post-9/11 GI Bill, which modernized the educational benefits available to veterans.
Now, 70 years later, we want to strengthen the GI Bill again – this time to help veterans who want to start businesses.
Every year, millions of dollars in GI Bill benefits go unused. Some servicemembers have no desire to continue their educations. Others already have degrees or lack dependents to whom they could transfer their benefits. It’s time to give these eligible veterans another option: hang a shingle for themselves.
Last fall, the Legion’s National Executive Committee passed Resolution 26, which calls for legislation to modify the Post-9/11 GI Bill to allow veterans to convert educational benefits into funds for starting businesses or purchasing or expanding a current business.
Nothing could be more in line with the original law, which included low-interest loans for starting businesses. But expanding the GI Bill in this way also makes good economic sense. According to the Small Business Administration (SBA), 2.45 million veterans started businesses in 2007, making up 9 percent of all U.S. businesses and contributing $1.2 trillion in total receipts. The same report found that about 22 percent of veterans were either purchasing or starting businesses, or considering doing so. Skills developed in the military were a factor, as one-third said they’d learned business management while in uniform.
Unfortunately, many veteran-owned businesses don’t make it even a year. Most of the time failure isn’t due to mismanagement, but to lack of access to cash capital to climb out of the start-up phase. Currently, veteran business owners are forced to rely on personal or family savings at an alarmingly high rate – about 62 percent, according to the SBA.
What better way to give veterans a hand than by granting them access to educational benefits that would otherwise go unclaimed? Giving them the means to start small businesses will boost the nation’s economy and put our warriors back to work. Employers know what they’re getting when they hire a fellow veteran. It’s a win-win.
From its genesis, the GI Bill was intended to give returning servicemembers the training or education they needed to become gainfully employed in civilian life. Shouldn’t it also help them gainfully employ themselves? That was certainly the case with the original GI Bill, when VA guaranteed 215,000 or so small-business loans from 1944 to 1954.
Some of the most successful business owners chose entrepreneurship over formal education. The men and women who serve our country deserve the same opportunity. They’ve learned elite management and logistics skills during their time in the military; let’s help them put these skills to use in the business world when they come home.
Nearly six years ago, the Legion was instrumental in persuading Washington to bring GI Bill benefits in line with the cost of today’s education. We can do this.