GI Bill

Impact

The GI Bill had a profound effect on postwar American life. Fifteen million men and 335,000 women who wore their country's uniform returned to civilian life after World War II. The GI Bill gave them financial aid they used to help fuel a postwar economic boom. Instead of a new depression that so many Americans dreaded, the economy soared, as it created new jobs, new homes in rapidly expanding suburbs, and new opportunities in higher education.

The loan guarantee provisions of the GI Bill helped alleviate a severe housing shortage during the first years of peace. Residential construction had lagged for many years because of the Great Depression and the economic demands of World War II. A sharp jump in the marriage rate as veterans returned home only added to the shortage of housing. In 1946, 1.5 million former GIs were living with parents, other family members, or friends because they could not find a house to buy or an apartment to rent. The shortage drove up house prices so much that Congress increased the amount of the loan guarantee under the GI Bill first to $4,000 in December 1945 and then to $7,500 in April 1950. The demand for housing encouraged home builders to develop innovative methods. New suburbs appeared in what had been corn or potato fields just months earlier, and mass-production techniques allowed the construction of homes at record rates. World War II veterans flocked to these new communities. Many of them, however, were racially segregated; African Americans did not have the same opportunities as whites to move to the suburbs or live the American dream. Approximately 3.75 million former GIs secured government-backed mortgages under the Servicemen's Readjustment Act. Home ownership became far more common in postwar America than it had been previously, partly because of the GI Bill.

There were also important changes in higher education as World War II veterans started or continued work toward a college diploma. By 1947, 49 percent of those enrolled in institutions of higher education were veterans. Some educators feared such an influx of “nontraditional” students would have an adverse affect on university campuses. For example, James B. Conant, the president of Harvard University, predicted that the GI Bill could lead to “the least capable among the war generation … flooding the facilities for advanced education” (Olson, p. 33). Such warnings proved wrong. Former GIs were usually serious students who were determined to use their educational opportunities to better their lives. They did create problems on many campuses, but mainly because of their numbers. At the University of Michigan, for example, enrollment quickly tripled to thirty thousand students. Michigan and many other colleges and universities had to scramble to provide sufficient housing and classroom space. The soaring enrollments, however, brought significant and enduring changes in university life. In only a decade, between 1940 and 1950, college and university enrollment in the United States increased by 80 percent, to 2.7 million students. No longer was a college education only for a minority of wealthy, privileged Americans. The GI Bill helped democratize American higher education.

Vocational schools attracted more veterans than college campuses. While 2.2 million former servicemen and women used the GI Bill to attend an institution of higher education, 3.5 million utilized its benefits for vocational training. In addition, the dire predictions about the popularity of the “52-20 Club” were wildly inaccurate. About 57 percent of eligible veterans collected unemployment compensation, but usually for only brief periods. Overall, the expenditures for readjustment compensation were just 20 percent of the expected costs, proof that those who returned home from war in the mid-1940s were eager to seize opportunities and build new lives.

The GI Bill became one of the most celebrated pieces of legislation in American history. The American people and their political leaders praised it for contributing to the prosperity of the late 1940s and early 1950s. Even those who disliked government welfare programs considered the GI Bill a success because it gave millions of people the opportunity to acquire new skills, fulfill their potential, and improve their quality of life with the help of a short-term government investment. Successors to the GI Bill provided educational benefits and employment assistance to veterans of the Korean and Vietnam wars. In June 1987, President Ronald Reagan signed the New GI Bill Continuation Act, which furnished educational benefits to reservists as well as veterans of active duty. The law became known as the Montgomery GI Bill because of the important role of Representative G. V. “Sonny” Montgomery, Democrat of Mississippi, in its passage. The legislation was still in effect in the early twenty-first century.