Learn about the origins and effects of the GI Bill, which provided American veterans with housing and tuition benefits. 

Overview

  • Enacted by Congress in 1944, the GI Bill sent more than eight million World War II veterans to school between 1945 and 1956.
  • It also backed home loans, gave veterans a year of unemployment benefits, and provided for veterans' medical care.
  • The bill was a huge success, propelling Americans to new heights of education and helping to fuel the economic prosperity that characterized the postwar era.

The GI Bill

After the end of World War II, American soldiers anxiously awaited their return to civilian life. Those stationed in Europe, Asia, and the Pacific hoped they would soon be reunited with their families and quickly employed in the bustling industrial economy of the United States.
The US government was anxious, too, but for a different reason. World War II had revived American prosperity after more than a decade of depression, and the government was desperate to fend off the economic turmoil that 15 million veterans reentering the workforce might wreak.
Hoping to provide servicemen and women with a measure of financial security upon their return (and, hopefully, siphon a substantial proportion of veterans away from the labor market and into educational programs), President Franklin D. Roosevelt signed the Servicemen's Readjustment Act on June 22, 1944. Commonly known as the GI Bill, the Servicemen's Readjustment Act offered veterans a year of unemployment pay after their homecoming; guaranties for loans to purchase homes, businesses, or farms; and tuition and living stipends for college or vocational programs.
Photograph of President Franklin D. Roosevelt signing the Servicemen's Readjustment Act while seated at his desk, with many supporters standing behind him.
Franklin D. Roosevelt signing the Servicemen's Readjustment Act (GI Bill) into law, June 1944. Image courtesy Wikimedia Commons.
Not everyone greeted this plan with enthusiasm. Accustomed to a pre-war society where college education was reserved for the elite, the president of the University of Chicago griped that "Education is not a device for coping with mass unemployment . . . colleges and universities will find themselves converted into educational hobo jungles."1^1
But this judgment proved premature. The GI Bill was an unprecedented success, sending eight million veterans to school in the decade after World War II and completely reinventing American higher education. Despite the hefty price tag of the program - about $14.5 billion dollars - veterans who took advantage of the educational subsidy earned, on average, $10,000-15,000 more per year than those who did not, generating ten times the cost of the program in tax revenue. Consequently, some analysts have called it "the best investment the US government has ever made."2^2

Origins of the GI Bill

In 1944, FDR was running for reelection, seeking an unprecedented fourth term as president of the United States. During the Great Depression, he had won broad popular support through the New Deal, which sought to use government programs to ensure baseline economic security for the American people. During his State of the Union address in 1944, Roosevelt proposed a radical "economic bill of rights" that would guarantee American citizens employment, health care, education, and housing.3^3 In the midst of the wartime economic boom, however, this promise of security failed to animate voters as it had a decade earlier.
What did get their attention was Roosevelt's promise that returning GIs (a nickname for soldiers derived from their "general issue" uniforms) would be entitled to certain perks for their faithful service. With the assistance of the American Legion, the economic bill of rights was revamped as the GI Bill of Rights.
President Franklin D. Roosevelt’s Statement on Signing the G.I. Bill, June 22, 1944
This bill, which I have signed today, substantially carries out most of the recommendations made by me in a speech on July 28, 1943, and more specifically in messages to the Congress dated October 27, 1943, and November 23, 1943: It gives servicemen and women the opportunity of resuming their education or technical training after discharge, or of taking a refresher or retrainer course, not only without tuition charge up to $500 per school year, but with the right to receive a monthly living allowance while pursuing their studies.
It makes provision for the guarantee by the Federal Government of not to exceed 50 percent of certain loans made to veterans for the purchase or construction of homes, farms, and business properties.
It provides for reasonable unemployment allowances payable each week up to a maximum period of one year, to those veterans who are unable to find a job.
It establishes improved machinery for effective job counseling for veterans and for finding jobs for returning soldiers and sailors.
It authorizes the construction of all necessary additional hospital facilities.
It strengthens the authority of the Veterans Administration to enable it to discharge its existing and added responsibilities with promptness and efficiency.
With the signing of this bill a well-rounded program of special veterans’ benefits is nearly completed. It gives emphatic notice to the men and women in our armed forces that the American people do not intend to let them down. By prior legislation, the Federal Government has already provided for the armed forces of this war: adequate dependency allowances; mustering-out pay; generous hospitalization, medical care, and vocational rehabilitation and training; liberal pensions in case of death or disability in military service; substantial war risk life insurance, and guaranty of premiums on commercial policies during service; protection of civil rights and suspension of enforcement of certain civil liabilities during service; emergency maternal care for wives of enlisted men; and reemployment rights for returning veterans.
This bill therefore and the former legislation provide the special benefits which are due to the members of our armed forces -- for they "have been compelled to make greater economic sacrifice and every other kind of sacrifice than the rest of us, and are entitled to definite action to help take care of their special problems." While further study and experience may suggest some changes and improvements, the Congress is to be congratulated on the prompt action it has taken.
The GI Bill, as it was abbreviated, had three key components:
1) Educational support. Veterans were entitled to $500 per year toward tuition and as well as a living stipend of $65-90 per month depending on whether the veteran had a family to support during his or her schooling.
2) Unemployment benefits. The GI Bill stipulated that 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 back veterans' borrowing, making it much easier for them to get credit.
Though it is quite similar to guarantee in meaning, the noun guaranty is a specific legal term used in contracts to denote a formal pledge to pay another person's debt.
The GI Bill also provided for veterans' medical care, even building new hospitals to meet the increased demand.
Cartoon depicting a white male soldier sitting at the base of a tree, surrounded by "thought bubbles" suggesting different paths in life to him: Job, Back to School, G.I. Bill of Rights, Job training, Business for yourself, Government employment, Job prospects, Self Analysis, Changes.
Cartoon depicting the many choices available to GIs upon their return. Image courtesy National World War II Museum.

Scope of the GI Bill

From 1945 to 1956, about 50% of the American veterans who served in World War II availed themselves 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 took instruction in agriculture. The number of Americans who earned college degrees more than doubled before and after the war, from just over 200,000 in 1940 to nearly half a million in 1950.4^4
The GI Bill expanded American university instruction from a curriculum focused solely on the liberal arts to one encompassing a range of career paths, including science, business, and engineering. Historian James T. Patterson has called it "the most significant development in the modern history of American education."5^5
The government guaranty for home and business loans also prompted an economic boom, financing the construction of thousands of new homes, like those that sprang up in suburbs such as Levittown, New York.
Overall, the GI Bill was a major factor driving the prosperity of the postwar era. Not only did it save the American economy from a potential unemployment epidemic, it was also the gift that kept on giving: as more Americans took advantage of higher education, they earned higher wages, and could therefore pump more money into the economy by buying homes and consumer goods.

What do you think?

Imagine you were returning from World War II. Which of the GI Bill benefits do you think would be most important to you and why?
Why do historians believe the GI Bill to be so transformative in American education?
How was the passage of the GI Bill related to the rise of America suburbia?
Article written by Dr. Kimberly Kutz Elliott. This article is licensed under a CC-BY-NC-SA 4.0 license.
Notes
  1. Robert Maynard Hutchins, quoted in Keith Olson, The GI Bill, the Veterans and the Colleges (Lexington: University of Kentucky Press, 1974), 25.
  2. Hilary Herbold, "Never a Level Playing Field: Blacks and the GI Bill," The Journal of Blacks in Higher Education No. 6 (Winter, 1994-1995), 104.
  3. See David M. Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945 (New York: Oxford University Press, 1999), 784.
  4. James T. Patterson, Grand Expectations: The United States, 1945-1971 (New York: Oxford University Press, 1996), 68.
  5. Ibid., 69.
Attributions
Text of Roosevelt's statement from the US Department of Veterans Affairs.
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