Should I get out at 5 years of service instead of 8 and skip the GI Bill?
(Note: This section uses officers who owe repayment back for ROTC or the Academy as an example. If you never took money from the government for commissioning or enlistment you will earn the GI Bill after three years of service. If you took money you need to serve your initial obligation and then a full 3 years after to get the full GI Bill)
Man the number of times I get asked this question is overwhelming. So I am finally glad we are getting some pen to paper and memorializing some advice and knowledge. The decision to leave at 5 versus 8 is a big decision. A lot happens in those three years. Officers after 5 years start to leave their wild ways behind and look for wives/husbands. People stop doing stupid irresponsible things and get into a schedule. Kids start to show up. A million weddings to attend. This is all in addition to the GI Bill and financial/career considerations. The post below was written by a veteran at a MBB (McKinsey, Bain, BCG) firm. He left the Army at 5 years while I did 8. He is wicked smart so heed his advice. I have the same views as his, but did more time because I was an aviator.
Staying in vs. Getting Out: when you should pop smoke
Once you consider leaving, the advice givers come out…
Be aware, that once you start communicating that you are contemplating leaving the Military, everyone will start to offer advice. Below are some actual things I heard during my last year in the Army:
“Employers only care about one word…. Command” -Branch Manager
“You are gonna miss that healthcare” -Random retired Navy guy
“You’ll miss the camaraderie and your team the most - it’s nearly impossible to find purpose like you had in the Army” -Vet Bro
Most of this advice comes from people, however well intentioned, that do not have a full view of your military career, private sector opportunities, or what makes sense for your life. As much as you can, seek people who can give you a well rounded and nuanced view of your decision to leave. Recently transitioned Vets can be among the most helpful group; take the rest with a grain of salt.
So you’ve decided to leave the Military but are not sure when you should take the leap
There is no definitive answer as to the best time to leave the Military, but there are many factors that you should consider. There are many rumors out there; let’s attempt to bring some truth to the conversation.
GI Bill and $$$
MBA Programs and grad schools are really damn expensive. Depending on how you pay for school, you could wind up between $0-$200k in debt after graduating a 2 year program. It’s definitely daunting to consider how you will pay for school, but just to remove any anxiety you may have about these potentially large dollar figures - do not worry about it; you have a lot of resources to help and guide you. Let’s walk through when it would make sense to get out earlier vs. getting out later:
The argument to get out sooner rather than later:
I understand that carrying up to $200k of student debt can be frightening. To alleviate your fears, check out your target school’s post graduation compensation stats, and you’ll realize you could pay off those debts in 2-5 years with an average MBA job from a top ~15 school (heavily depends on what your expenses look like after school e.g. living in NYC vs. Denver).
The GI Bill is many times a great help to alleviate the financial burden for graduate school; It can help pay for anywhere from $15k per year of school all the way up to the full cost of tuition, books, and housing. The variance depends mainly on the amount of time that you have spent on Active Duty. ***Check out the VA web page or call to inquire about your benefits in order to determine your specific eligibility***
As a general rule of thumb, the amount of GI Bill Active Duty time for officers is calculated from the time that you complete your commissioning source obligation (typically 5 years Active Duty for Academy folks and 4 years for ROTC), and for enlisted it’s typically the start of active duty. At 90 days active duty time post initial service obligation, you are eligible for 40% of the GI Bill benefits which includes some allotment for tuition, books, and even BAH. If you are thinking about popping smoke earlier, it could make sense to hold out the extra 90 days to get 40% which might mean you cancel your summer vacation plans and take a lot of Terminal Leave - don’t worry, MBAs still manage to take plenty of trips during school. Eighty-nine days or fewer gets you $0 in GI Bill benefits most of the time, so unless staying those extra 3 months would mean you miss the start of a program and you’d have to defer a year, stay 90 days and get 40%.
There are many other sources of funding beyond the GI Bill. For instance, some folks will have school financial aid (which could be significant nearing the entire cost of your program), disability compensation, deployment savings (that Dodge Charger does little good if you go to NYU), Vocational Rehab could be an option depending on your program, and don’t forget low interest government student loans.
The argument to stay in longer
GI Bill benefits work on a sliding scale from receiving 40% of the max benefits at 90 days Active Duty to 100% at 3 years. The huge advantage to getting 100% of the GI Bill is that you then become eligible for the Yellow Ribbon Program which will often cover the difference between the GI Bill (typically covering in-state tuition rates only) and the actual cost of school - note: Yellow Ribbon levels are school dependent.
You can feel confident getting out and covering the cost of school as many of your non-military peers will do so through a higher salary post graduation and/or financial aid. Staying in 3 extra years solely to get 100% of the GI Bill does not often make financial sense when you consider how much money you’re leaving on the table by delaying your higher comp for those 3 years (go build a model you aspiring MBA!). However, I will say that I noticed my peers with no debt felt much more free to take a risk and delve into entrepreneurship or non-profit work, as opposed to grinding it out in finance or consulting until they paid down debt.
Employability, compensation, and grad school competitiveness
One of the most common myths out there is that staying in longer will get you a better job or a higher salary; in most cases, staying in for 5 years and staying in for 8 years will land someone similar jobs with negligible salary differences. Ultimately companies are hiring you for your leadership, ability to get things done, knowledge of systems and processes, and general ability to thrive in ambiguity. While it may look impressive on a resume, employers generally don’t care if you’ve managed $20m of property vs. $800m or managed a team of 15 vs. a team of 40 - any management experience is impressive relative to your civilian peers.
Most grad school programs will have an age dimension to their class stats; be aware that once you start getting to the upper end of that age range, you will become less competitive for that school. The average age for most MBA programs is 26-27 often with less than 10% over the age of 30 (usually those students have a legitimate justification e.g. I was a pilot and flight training extended my service obligation). Ultimately, regardless of your age, you should apply when you feel that you have a strong enough application (i.e. your GMAT/GRE is in a good place, your resume is solid, and you’re ready to pull the trigger on Letters of Recommendation).
Passion and excitement
Thankfully, it’s your life, and if you’ve served out your obligation you should feel free to pursue your passions wherever they lie. If you love the military and want to stay in for a bit longer (e.g. Command), then absolutely go for it. It’s tough to replicate the camaraderie and team aspects outside of the Military (one of the most common aspects that folks mention they miss about their time in service). If you are fed up with the daily grind, then get out. Your resume won’t improve if your heart’s not in it (not to mention your impact on Military teammates).
In Conclusion...
The decision to get out is a very personal one. You’ll hear a lot of advice from many different folks; feel free to listen but make sure you hear out people who have actually made the leap and know you well. Carefully consider your financial decisions, and seek out resources to help you weigh your options (whether it’s staying in longer or getting out earlier).
One last note: once you start indicating to your command or career manager that you are even considering getting out, it’s possible (or even likely) that they’ll put you in a ‘go nowhere’ staff job, and it’s a near certainty that your next review will be mediocre at best. Just remember to use discretion with your conversations around leaving the military until you are fully ready to jump.
