The Active Duty Montgomery G.I. Bill

the Montgomery GI Bill (MGIB) is not managed by the Department of Defense, nor any branch of the U.S. Military unlike what most people think. The Montgomery GI Bill is actually a "Veteran Benefit," and is managed by the Veterans Administration (VA), who administer the program based upon laws enacted by Congress.

In a summary, the Active Duty Montgomery G.I. Bill (ADMGIB) grants $47,556 worth of education benefits, in exchange for an enlistment period of at least three years in the United States Military, along with a reduction in pay of $1,200 ($100 per month) for the first year of service. The ADMGIB grants $38,628 worth of education benefits for those who enlist for less than three years (this is mostly the two-year enlistment option for the Army). This still requires a reduction of pay of $100 per month for the first 12 months of service.

One must elect whether or not to participate in the ADMGIB during basic training or time of enlistment onto active duty. If one declines the ADMGIB, they can't change their mind later. If one elects to participate and then changes their mind later, or if they are discharged before they become eligible to use the benefits, they don't get any of the money back that was taken out of their pay. This is because (the way the law is worded), it's a "reduction in pay," not a "contribution."
One can either use their ADMGIB benefits while on active duty, or after discharge/retirement (or one can use part of the benefits while on active duty, and then the remaining benefits after discharge/retirement). To use the ADMGIB while on active duty, one must first serve two continuous years of active duty before they can use any of the benefits. In any case, benefits automatically expire ten years after discharge or retirement. Because all of the services now offer 100 percent Tuition Assistance (TA) while on active duty, and because the ADMGIB pays more when going to school after military service than it does while on active duty (I'll explain this in a later section), most military members elect to use TA while on active duty, and save their ADMGIB benefits until after they leave the military.

Eligibility

It may surprise you to learn that not everyone who enters active duty is eligible to participate in the ADMGIB. You are not eligible to participate if:

• You declined the ADMGIB in writing upon entry to active duty.
• You were commissioned through a Service Academy (West Point, Air Force Academy, Naval Academy, Coast Guard Academy, etc.) Exception: If you qualified for the ADMGIB because of a previous term of enlistment, you don't lose it by graduating from a service academy.
• You were commissioned through an ROTC Scholarship and received more than $2,000 in ROTC scholarship funds in any one academic year (Note: This changed to $3,400 per year effective December 27, 2001). As with Service Academy commissions, if you fully qualified for the ADMGIB before being commissioned through an ROTC Scholarship, through a previous enlistment period, this doesn't apply.

To qualify to use your ADMGIB benefits after getting out of the military:

• You must have an HONORABLE discharge ("General, under Honorable Conditions" doesn't count).
• If you enlisted for a period of three or more years, you must serve for at least three years on active duty (there are some exceptions, explained below).
• If you enlisted for a period of less than three years, such as the two year enlistment option offered by the Army, you must serve at least two years on active duty (same exceptions, below, apply).

In addition to the above, before you can use any of your ADMGIB benefits (either while on active duty, or after separation), you must first have a high school diploma, a GED, or at least 12 college credits.

If You Separate Early

If you don’t complete the required period of service, you may still be eligible for MGIB if you were discharged early for one of the following reasons:

• Medical Disability
• Hardship
• Pre-existing Medical Condition
• A condition that interfered with performance of duty
• A reduction in force (RIF)—(Only certain RIFs qualify; check with your Education Service Officer.)
• Convenience of the Government.
  • Note: If the "Reason for Discharge" on your DD Form 214 (Record of Separation) is for this reason, you must have served at least 30 months if your enlistment contract was for three or more years, or at least 20 months if your enlistment contract was for less than three years.

Note:  
 *If you're discharged early, your ADMGIB benefit rates will be reduced accordingly. If you’re separated for one of these reasons, you'll receive one month of entitlement for each month of active duty (up to 36 months) after June 30, 1985. For example, if you're discharged after 19 months for hardship, and you meet the other eligibility requirements, you'll receive 19 months of ADMGIB benefits.

* Those who go onto active duty on or after August 9, 2009 will no longer be able to elect the ADMGIB. Instead, they will be automatically eligible for the new GI Bill.

*Congress has made significant enhancements to the GI Bill for military members (active duty, Guard, and Reserves) with post 9/11 active duty service. For details, see the article, Congress Revamps GI Bill.