The GI Bill


  • Enacted by Congress in 1944, the GI Bill provided higher education for more than eight million World War II veterans between 1945 and 1956.
  • It also provided home loans, gave veterans a year of unemployment benefits, and provided for veterans' medical care.
  • The GI Bill helped to fuel the economic prosperity that characterized the postwar era.

The GI Bill

World War II had revived American prosperity after more than a decade of depression, and the U.S. government was desperate to prevent the economic turmoil that could occur as 15 million veterans reentered the workforce.

President Franklin D. Roosevelt signed the Servicemen's Readjustment Act on June 22, 1944. Commonly known as the GI Bill, this Act offered veterans a year of unemployment pay after their homecoming; guarantees for loans to purchase homes, businesses, or farms; and tuition and living stipends for college or vocational programs.

The GI Bill was a huge success, sending eight million veterans to college after World War II and completely reinventing American higher education. Veterans who took advantage of the educational subsidy earned, on average, $10,000-15,000 more per year than those who did not, repaying the cost of the program in tax revenue.

Origins of the GI Bill

FDR promised that returning GIs (a nickname for soldiers derived from their "general issue" uniforms) would be entitled to certain benefits for their service, leading to the GI Bill of Rights.

The GI Bill, as it was abbreviated, had three key components:

1) Educational support. Veterans were entitled to $500 per year toward tuition as well as a living stipend of $65-90 per month, depending on whether the veteran had a family to support.

2) Unemployment benefits. Veterans could receive $20 per week for a year while looking for work. More than eight million veterans took advantage of this benefit.

3) Loan guaranties. Although the government did not give veterans money to purchase homes, businesses, or farms, it pledged to insure loans taken by veterans, making it much easier for them to get credit.

The GI Bill also provided for veterans' medical care. New hospitals were built to meet the increased demand.

Scope of the GI Bill

From 1945 to 1956, about 50% of the American veterans who served in World War II took advantage of one or more aspects of the GI Bill. 2.2 million veterans went to college, 3.5 million went to technical or vocational school, and 700,000 were trained in agriculture. The number of Americans who earned college degrees more than doubled after the war, from just over 200,000 in 1940 to nearly half a million in 1950.

The GI Bill expanded American university instruction from a curriculum focused just on the liberal arts to one covering a range of career paths, including science, business, and engineering. Historian James T. Patterson called it "the most significant development in the modern history of American education."

The government guaranty for home and business loans also prompted an economic boom, financing the construction of thousands of new homes, creating the American suburbs.

Overall, the GI Bill was a major factor driving the prosperity of the postwar era.

Source: The GI Bill
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