Cost Benefit Analysis

I know that I do not want to make a career out of being in the Army, but yet I do not have any clear idea of what I would around this time next year if I were to get out of the Army at the first available opportunity. It’s not for lack of trying to come up with ideas of what to do next, and perhaps no neon arrow pointing the direction I should go on 12 July 2010, but I’m at least trying to narrow down my possible courses of action. One option that I know is available to me here in Korea is the incentive program to extend my tour by a year. This in itself is worthy of it’s own analysis, but for now I’m only considering how any additional time in service will affect my post-9/11 GI Bill benefits (http://www.gibill.va.gov/GI_Bill_Info/CH33/Post-911.htm/). Under the GI Bill you are granted tuition assistance, a monthly housing allowance, and a yearly stipend for books.

I’ve made many assumptions and generalizations while doing my cost benefit analysis and I’m not going to spell most of them out, though I know that would be the proper thing to do. I will say that I decided to use the cost of one year of studying for a Masters in Early Childhood Education from the University of Michigan in Ann Arbor. Three consecutive terms made up of nine credits each comprise the year resulting in a cost of $8,816/term or $24,448/year. One other assumption is that the basic housing allowance provided under the GI Bill for Ann Arbor is $997/month or $11,964/year.

My initial obligation to the Army is complete on 28 May 2010. To be eligible for any amount of the GI Bill I need to stay in at least 90 days past that date, or until 27AUG 2010. To be on the safe side I’ve added one extra day to each of my calculations of how long I would have to stay in. If I stay in until 27 AUG I will receive 40% of the benefits of the GI Bill.

Active Duty Completed..............Date................% Max Benefit Payable
At least 36 months..............28 May 2013..................100%
30 months to 36 months............NA...........................90%
24 months to 30 months............NA...........................80%
18 months to 24 months....27 NOV 2011...................70%
12 months to 18 months....29 May 2011....................60%
6 months to 12 months......27 NOV 2010...................50%
90 days to 6 months...........27 AUG 2010...................40%

If I were to stay in for an extra 36 months IOT recieve full benefits, then the amount of money I would receive would be as follows:

ETS./Benefit %/Tuition (3 terms)/Housing/Books/Total

28MAY10...100%...$26,448.00..$11,964.00...$1,000.00...$39,412.00

Since I don’t plan on being in the Army until 2013, this is the breakdown of what I would receive depending on if I spend an extra year in Korea or not. Though the last ETS date is May 29, 2011, I would actually have to stay in Korea until July 11, 2011 if I do an extra year. The 50% calculation is thrown in just for fun.

ETS/Benefit %./.Tuition (3 terms)./Housing/Books/Total

27AUG10....40%....$10,579.........$4,785.60......$400.00.....$15,764.80

27NOV10...50%....$13,224.0 .....$5,982.00.......$500.00.....$19,706.00

29MAY11...60%....$15,868.80....$7,178.40......$600.00.....$23,647.20

27NOV11...70%....$18,513.60....$8,374.80......$700.00.....$27,588.40

The 50% calculation is thrown in just for fun. The 70% calculation would be if I went to the Career Course right after Korea and then only did my mandatory one year at my new duty station before getting out, though it would take a huge change of mind for me to go that route.

A very broad generalization is that the difference between me doing one year or two years in Korea is $7,882.40 per year in tuition assistance if I decide to go back to school after I get out of the Army. If I went to the career course instead of getting out getting out right after Korea (see career course assumptions in above paragraph), then it’d be a difference of $11,823.60 per year in tuition assistance.

Decisions...decisions...