In a precedent-setting move, the U.S. Marine Corps has cut tuition assistance for its service members by 80 percent, reducing the maximum benefit from $4,500 a year to $875.
The service’s new rules, announced Tuesday, took effect October 1.
The Marine Corps was the smallest user of tuition-assistance benefits provided by the Defense Department during the 2010 fiscal year, awarding 9 percent of the total, according to Jeffrey M. Silber, an analyst with BMO Capital Markets, and many Marines who use the benefit will be able to make up for the loss with Pell Grants and benefits offered under the Post-9/11 GI Bill and the older Montgomery GI Bill.
Still, the tuition-assistance cut will dampen revenues at for-profit and community colleges that enroll service members and could make it harder for some for-profits to comply with a federal rule that requires the colleges to receive at least 10 percent of their revenue from nonfederal sources to remain eligible for the federal student-aid programs. Military tuition assistance doesn’t count toward the federal share of the formula, but Pell Grants and other forms of student aid do.
American Public Education Inc., which operates the American Public University system and caters to veterans and service members, received 44 percent of its revenue from Defense Department benefits in the second quarter of this year, according to Mr. Silber.
Tuesday’s announcement did not come as a surprise; the Defense Department had said that it was considering cuts to its tuition-assistance program, which has nearly tripled in size over the past decade.
The Defense Department’s current guidelines for all the services cap tuition assistance at $250 per semester-hour, with an annual maximum of $4,500. The department has not yet announced what the assistance levels will be under the reductions it is seeking. The Marine Corps’s announcement, however, contains language suggesting that the militarywide maximums will be $175 per semester-hour for undergraduate courses and $225 per semester-hour for graduate credits, with an annual ceiling of $3,500.
A spokeswoman for the Pentagon, Maj. Monica Matoush, said the Defense Department is weighing changes to the maximum, but no final decisions have been made.
“We are committed to keep the core program intact while making it more affordable to the services,” she said in an e-mail.
In addition to cutting benefits, the Marine Corps’s new rules require service members to be on duty for a year before receiving tuition assistance, and limit the assistance enlisted Marines can receive to one undergraduate certificate or degree. Officers are prohibited from using the benefit for certificates that do not lead to a degree.
In its announcement, the Marine Corps said its decision was based on an analysis that found that most Marines take four or five credits a year. It argued that the change would focus the benefit on first-term Marines who lack degrees, while allowing the GI Bill to “support a broader continuum of learning or achievement” for Marines departing the service.
