New Bill Would Let Veterans Leverage GI Bill For Small Business Loans

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GI Bill

Benjamin KrauseA newly proposed bill would allow veterans access to key small business loans by using their Post 9/11 GI Bill as collateral. The bill is will be designed to especially help formerly Junior Enlisted veterans become entrepreneurs but it will likely be open to all veterans with GI Bill entitlement.

Retired Marine C. Lynn Lowder teamed up with fellow Marine Lt. Col. Joe Plenzler to develop the proposal in an effort to help young entrepreneurs. Currently, the bill is circulating Capital Hill and is similar in some ways to a proposal last year from American Legion.

Lowder said the proposal is really focused on formerly Junior Enlisted veterans. According to a Military.com article on the subject:

“They’re focused, motivated and loyal to a fault,” Lowder said. “They’re trying to get their feet on the ground, feeling for zero,” and they can be clueless on how to start a business. The problem for the young veterans with a business dream in most cases is that “there’s no way to get a loan. The access to capital is a challenge,” he said.

The plan would include safeguards to ensure veterans have some kind of mentorship and entrepreneurship training prior to taking on the debt:

Before a veteran could access that funding for loan collateral, the business plan would have to be vetted and approved by an independent board of business experts. The veteran would also have to attend a boots-to-business course at an accredited university.

With that done, the veteran would then apply to access the capital in their G.I. Bill as a no-interest loan to be paid back over 10 years.

So what do you think? Sound like a good plan to boost veteran job creation? How should the bill be written?

Source: https://www.military.com/daily-news/2015/03/03/gi-bill-proposal-would-help-veterans-receive-small-business-loan.html

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32 Comments

  1. Sounds good to me. Some veterans are academically inclined, while others are more entrepreneurial and prefer straight vocations. Why not let them leverage it whatever way they want to get back on their feet.

  2. How nice, another cherry on top of the mountain of benefits for post 9/11 veterans. What about the millions of veterans who served before that date? F*** them , huh?

    • Did you take advantage of the benefits that were available to you when you when you got out? There are still quite a few options that can be researched for Vets that have served but may not qualify for this particular option if approved. I can post if interested.

    • “How nice, another cherry on top of the mountain of benefits for post 9/11 veterans. What about the millions of veterans who served before that date? F*** them , huh?”

      It sure feels that way. I have all the respect in the world for the post 9/11’s and appreciate what they do, but as a veteran who got out just before (mid 2001) with a spouse who also got out mid-2001, I feel substandard or left out of certain benefits. For instance, the Wounded Warrior program; we’re not eligible, not a member of this special club by just a couple months. I was looking at home grants for veterans (that myself spouse and kids sorely need) and saw that I did not qualify because I got out 7/01. It’s too bad.

      • That is specifically the large bummer for me is the grants for home loans, in addition to other benefits. I too have total respect for veterans serving post 9/11 but we are indeed “an Army of One”, right? No ‘sour grapes’ here, just do not think it’s being entirely gratuitous in same way Viet Nam Vets have had to wait until just last few years to have Agent Orange addressed…this new policy of exclusionism is not healthy for those of us that love the consistency inherent with the Uniformed Code of Military Justice, and actually wish that was applied entirely with the whole VA System…it’s what it needs.

  3. I think that it is a breakthrough .I hope that the program would let veterans gain access to real estate as an investment or second property.

  4. I’m all for this use of the benefits we have earned Post 9/11. I would like to see a robust repayment option rather than a forgiveness of the loan for bankruptcy etc. We want a hand up, not a hand out.

    I’m confused about the business plan review board. Would it be local boards of private business people or educators who can evaluate a plan realistically or a government concoction made up of staff workers whose only interest in entrepreneurship is checking a box according to a preset and possibly out of date criteria? Business plans today take many forms and involve some business ideas that don’t fit the mold. They are used for funding but realistically, are designed for the business person to learn about their business and demonstrate an expertise in all components of the business to mitigate failure.

  5. Why should ANY Veteran be required to “leverage” or “use their GAURANTEED Student Loan Benefits” as “collateral”????? What IF any given Veteran ALSO wants to USE their G.I. Bill? Is it putting a Veteran in a situation of being forced to choose a college education OR starting a private business? Perhaps the college SHOULD come first?
    Is the Veteran whom already has used PART of their G.I. Bill and has sundry student loans outstanding not eligible?
    I also HAVE to ask, WHY not extend such a thing to ALL veterans, not JUST POST 9/11 Veterans? I say this because it has progressively gotten under my skin that there has been created this DIVIDE of newer veterans with MUCH better benefits when in reality we are ALL veterans, regardless of the name of the War, Cold War, Police Action, Peacekeeping Ops, et al….why are we continuing to act as if THESE WARS CURRENTLY AND HISTORICALLY LONGEST IN USA HISTORY ARE SOMEHOW **MORE SPECIAL** THAN ANY OTHER WAY A VETERAN BEFORE THEM HAS SERVED?
    With the above stated, I am not a self-absorbed @ss, it’s just that there’s SO MANY **extra special** benefits that are **only** for POST 9/11 Veterans**, which is INDEED leaving MANY VETERANS LIVING ON STREETS…not to mention those Veterans that were National Guard and Activated “Active Duty” for up to even DAYS before the MAGICAL 24 months required Active Duty BEFORE ANY BENIFITS qualified for and are pulled back to USA JUST BEFORE they could qualify for ANY of these and MANY of these Veterans are indeed homeless and feel quite disenfranchised by our Gov’t and VA.
    I stand firm in my belief that this should be a benefit that does NOT require “leverage” of one’s guaranteed Student Loans. How about the novel idea of simply forcing all the BANKS to actually GRANT Small Business Loans to Veterans, REGARDLESS OF **WHEN THEY SERVED**?
    By the way, I know MANY Veterans that feel the SAME way as far as all these extra benefits set aside for ONLY certain Active Duty time-served time-frame Veterans, specifically Post 9/11…are we screwing all other Veterans for a reason?
    War is war and the cost should be the same.

  6. Preserving the GI Bill as an education benefit alone in some cases also allows spouses and children the opportunity to use the benefits if the veteran doesn’t. And in the case of a veteran who wants to start a small business right out of the gate, giving up the GI Bill for a small business loan may leave the veteran holding the bag when the desire or need strikes later to go back to school to get a degree that will expand the business or offer an alternative to a business that wasn’t meant to be.

    Access to GI Bill money as a loan vice education benefit may also have long-term unintended consequences.

    Changing the scope of the benefit to something other than protected education benefits may create an opportunity for lawmakers to strip the benefit from servicemembers down the road. The mismanagement of funds is well guarded at present since GI Bill funds go directly to the school when paid for tuition and fees and quickly ceases in the event of failure to pass the curriculum or continue education. Turning those same funds into either direct funding for loans or as a guarantee against a larger loan amount (like the VA mortgage guarantee) could lead to mismanagement or outright loss of funds without stop gaps limiting loss.

    Such losses could result in termination of the program – possibly resulting in throwing the baby out with the bathwater if the original GI Bill education benefit is terminated with the loan program.

    While my first inclination upon seeing the headline was, “I hope they make applicants graduate an entrepreneur’s course,” and while I was pleased to see that such is being considered, I believe that a better way to handle this kind of benefit would be to either 1) open the VA mortgage guarantee to small-business investment, or 2) create a VA small business loan guarantee similar to the VA mortgage guarantee.

    As a graduate of The Veterans Entrepreneurship Program, sponsored by the Center for Entrepreneurship & Innovation at the Warrington College of Business Administration, University of Florida, in Gainesville, Florida, I am certain that entrepreneurship training is crucial to a strong foundation for veterans starting a business.

    My (tax) money is on keeping the GI Bill as a protected education benefit only and exploring other alternatives to supporting veterans who need a small business loan.

  7. The devil is always in the details.

    Veterans don’t have to repay educational benefits they have validly received so by extension if a veteran is instead choosing to forgo that benefit and opting for entrepreneurship–ie starting a small business, self employment etc—those funds should not have any payback conditions either.

  8. The only reason this bill is being proposed at all is because this country is in a proloned economic slump that will last for another decade or so. Small businesses are thought to be the catalyst to help job creation. Milions and millions fail. This has really nothing to do with helping vets out per se – the bigger picture that is really in the mind of Lowder and Pentzler is using mechanics, leverage and options that might make sense to Congress to look at with a degree of consideration, and to bolster these guys higher for their own advancement The sweetner is to leave out anyone before 911 era. Yeah, that’s the ticket. That’s something that can be sold. If it ain’t veterans, they’ll pick another lot.

    • That “sweetner” in leaving out Veterans pre-9/11 is tasting like acrid saccharine to me. Who’s to say that just like the “No-Choice Card Program”, the rug is pulled-out before it can even take off, only to have an open window for the Congress to cherry-pick educational benefits at same time?
      Something tells me there’s something ugly within the fine print here because why not simply ORDER these same banks that America BAILED OUT to start giving Small Business Loans out to more Veterans, and NOT just post-9/11 Veterans?

      We would not even be having this conversation if there were not a huge fly in the ointment that consists of the fact the banks make it incredibly hard for Veterans to get Small Business Loans.

      I would almost rather see an entirely separate program very much LIKE our VA Guaranteed Mortgage/Home Loan Program rather than potentially screwing any Veteran’s educational benefit.

      The problem here is exclusionism as well as making the banks happy…not Veterans.
      This smells of a glossed-up program cooked-up by Koch Brothers, LLC. (which means THEY stand to benefit, not the Veterans)

      I hope we Veterans take our disdain with the VA to the voting booth in 2016 and this website can help rally this. Improving the VAMC and Backlog of claims should be the priority right now…right?!

      • Because, my friend, large Banks OWN the govenrment. They ARE the government. Nobody is going to Order them to do anything. And, if by show, the presbo and Congress order them, they won’t do it anyway. They will drag this out in implementation until hell freezes over just like all the rules made by Congress to protect the world from their greed after 2008 are ignored and dragged out to benefit no one but them. The banks laugh at the government, and if pushed, they will arrange for an assassination of the people who tries ordering them. Just ask the Fed Reserve, who is a bankers protection and tells the government what to do. Money talks. We lose.

  9. I don’t think it’s a good idea. So the Government is going to let me “Borrow” money/benefits that I’ve earned to start up a business and they’ll control who gives you the training to take part in this program. No thanks, Give me me my benefits to educate myself further or to do some type of apprenticeship and get a stipend. I can save that money and start my own business without all the strings attached. But I think the biggest question that I’d have about this deal is; since it’s a loan, does my benefits for education return once I’ve paid back the interest free loan? What happens if my business flops? Am I now responsible for paying the Government back for benefits I rightfully earned? Looks to me like a way to save money by offering loans on money you’ve earned and it keeps the money with the Government. Its a way for them to pay less and keep more! So not a fan.

  10. House bill would allow clawback of Veterans Affairs executive bonuses Tuesday, March 3, 2015,
    https://triblive.com/news/adminpage/7885827-74/bill-bonuses-veterans#ixzz3TSididyZ
    Follow us: @triblive on Twitter | triblive on Facebook
    Employee bonuses like those paid to top executives in Pittsburgh during a deadly Legionnaires’ disease outbreak could be recouped in the future by the Department of Veterans Affairs if a bill the U.S. House passed Monday night becomes law.
    The bill, sponsored by Florida Republican Rep. Jeff Miller, chairman of the House Veterans Affairs Committee, is partly a reaction to those bonuses given to VA Pittsburgh Healthcare System executives.
    The VA gave a White House-approved $63,000 career achievement bonus to former regional director MichaelMoreland shortly after the Pittsburgh outbreak became public in November 2012.
    Former VA Pittsburgh director Terry Gerigk Wolf received a bonus of about $13,000 for her work in 2011, when Legionella bacteria infested her hospitals’ water systems. The bacteria can lead to a potentially fatal pneumonia.
    At least six died and 16 others were sickened during the outbreak. Veterans, their families and members of Congress expressed outrage over the bonuses. But in Congressional hearings, VA executives testified that they had no authority to recoup the money.
    Moreland retired in 2013, and the VA fired Wolf last year.
    “Pittsburgh VA leadership has been reshuffled, replaced, retired or removed, but their bonuses have not been returned,” said Rep. Tim Murphy, R-Upper St. Clair, who voted for the bill. “These taxpayer-funded bonuses are inappropriate, deeply offensive to the victims of the outbreak and their families, and ultimately should be returned.”
    The VA does not have a position on the bill, spokeswoman Ramona Joyce said.
    “VA is continuing to work with Congress in their important oversight role,” Joyce said. “We understand they have a responsibility to their constituents, many of whom are veterans, and share our goal to provide high-quality care and benefits that veterans have earned and deserve.”
    Congressional efforts to crack down on VA employees have not always gone as planned. A law enacted in 2014 was supposed to make it easier for the secretary of the VA to fire workers. Members of Congress were angry to learn the VA set up an appeals process, but VA leaders told them that employment law gives greater protections to accused workers than Congress wanted.
    The bonus clawback bill passed on a voice vote. It must pass the Senate and then be signed by President Obama before it would become law.
    Also:

    The Washington Post ~
    The Veterans Affairs Department could recoup awards and bonuses already paid to its employees largely at the department secretary’s discretion, under a bill that could come to a House vote as soon as Monday evening.
    The bill is the first up for House consideration among a number of proposals to revamp VA personnel policies in light of the department’s patient care scandal. It passed the Veterans Affairs Committee by voice vote in February and is up for a floor vote under a shortcut procedure typically used only for noncontroversial bills.]
    A Congressional Budget Office analysis said that the VA pays roughly $400 million each year for awards and bonuses, about $4 million of that going to senior employees.
    The bill would give the VA secretary broad discretion to claw back cash payments simply by determining that action would be “appropriate.” The affected employee would be given a notice and an opportunity for a hearing by another, unspecified, department or agency of the federal government. Its decision could not be appealed.
    The CBO analysis said that while the repayment authority would apply to all levels of VA employees, it likely would be used only rarely, “primarily to recoup payments made to senior VA employees who were determined to have committed a serious violation of the agency’s standards of conduct.”
    The authority would apply retroactively, generally up to six years back, it said. “In addition, the authority would only affect current employees of VA; employees who resigned or retired would be exempt from recoupment,” the CBO said.
    Other bills sponsored by committee chairman Rep. Jeff Miller (R-Fla.) affecting VA would limit performance awards to senior executives, increase protections for whistleblowers, and require discipline of officials who retaliate against them. Those provisions, along with language enacted last year limiting appeal rights of senior executives at the VA, are seem as a potential roadmap for similar changes at other agencies.
    And also:

    https://www.stripes.com/news/veterans/senate-follows-house-with-bill-to-reclaim-va-bonuses-1.332620
    WASHINGTON — Senators on Tuesday filed a bill that would allow the VA secretary to recoup bonuses paid to employees involved in manipulating patient wait-time records.
    The measure is being introduced just one day after legislation passed a House vote that would allow the secretary of the Department of Veterans Affairs the ability to take back bonus money of senior executives for their role in manipulating wait times or other wrongdoing.
    The bill would require the repayment of any bonus given out in 2011 or after to those found responsible for the largest scandal in VA history. It is sponsored by Sens. Jerry Moran, R-Kan., Claire McCaskill, D-Mo., and Kelly Ayotte, R-N.H.
    The two bills have reinvigorated debate over reforming the VA and punishing those responsible for doctoring patient appointment data to mask long wait times at hospitals and clinics across the country.
    “VA personnel should be accountable for their actions — otherwise the current culture of manipulation will remain,” Moran said in a released statement. “This legislation will help make certain that those who put veterans’ lives at risk will be held responsible and return bonuses they unjustly collected.”
    Federal audits found last year that the VA used shorter patient wait times as a measure to award employee bonuses, meaning those who masked delays in veteran health care stood to gain by getting more pay. About 70 percent of VA facilities across the country practiced some form of data manipulation, department inspector general audits found.
    The Senate bill gives the VA secretary the power to reclaim the bonus payments from employees who directly hid the delays — and from managers who reasonably should have known their subordinates were guilty of the wrongdoing, according to Moran.
    The House passed its bill, sponsored by Rep. Jeff Miller, R-Fla., Monday night through an untallied voice vote. No lawmakers spoke out against it.

    How the VA cheats the veterans out of their disability:
    Here is how the VA cheats the veterans out of their disability. When a veteran files a claim with the VA the claims are automatically denied. The veteran then appeals to the Board of Veterans’ Appeals in Washington D.C. What the veteran doesn’t know is that about 80% of the claims that go to Washington are never decide by the BVA. They are returned back to the regional offices to be adjudicated correctly. This process could take anywhere from a year to three years. Once the claim is returned back to regional offices it then is reopened as if were a new claim and the process starts all over again. Thus,cheating the veteran out of one to three years back pay. The veteran service organizations ( DAV, VFW, American Legion, etc.) know this and refuse to defend the veterans rights. The reason for this is because these veteran service organization get all their office space and materials from the VA. Also in many VA claims the veteran is allowed 60 days to appeal his claim. What the VFW did to me was appeal my claim after 90 days and when my claim went to the BVA it was automatically denied because I hadn’t appealed in time.
    And also:
    [VA employee reforms, good or not, could be road map for other agencies
    https://www.washingtonpost.com/politics/federal_government/va-employee-reforms-good-or-not-could-be-road-map-for-other-agencies/2015/02/24/11598b96-bc4e-11e4-b274-e5209a3bc9a9_story.html

  11. How the VA cheats the veterans out of their disability:
    Here is how the VA cheats the veterans out of their disability. When a veteran files a claim with the VA the claims are automatically denied. The veteran then appeals to the Board of Veterans’ Appeals in Washington D.C. What the veteran doesn’t know is that about 80% of the claims that go to Washington are never decide by the BVA. They are returned back to the regional offices to be adjudicated correctly. This process could take anywhere from a year to three years. Once the claim is returned back to regional offices it then is reopened as if were a new claim and the process starts all over again. Thus,cheating the veteran out of one to three years back pay. The veteran service organizations ( DAV, VFW, American Legion, etc.) know this and refuse to defend the veterans rights. The reason for this is because these veteran service organization get all their office space and materials from the VA. Also in many VA claims the veteran is allowed 60 days to appeal his claim. What the VFW did to me was appeal my claim after 90 days and when my claim went to the BVA it was automatically denied because I hadn’t appealed in time.

    • Your claim is retroactive from the day it is received, if you win the claim! Stop passing wrong information to us veterans you yack.

      • Yes, but that’s only part of the story, Gerard. Assuming a veteran files his disability paperwork, gets the VA all the paperwork they ask for in a timely manner, and sees his claim through to the bitter end (we’re talking up to 10 years, here), then he might see a nice retro pay. This still only means that he’s getting a check they should have been giving him months and years ago, and who knows how he’s going to make ends meet in the meantime. Also, that retro pay check comes with no interest whatsoever; unlike, say, a credit card or VA bill payment, which WILL charge YOU interest if you are even a little late on making good on your payment.

        I’m not saying all VA disability claims are this trying, but many are. And many veterans don’t have the patience or tenacity to follow through when the VA pushes them around (and the VA is hoping they will do exactly that, and give up).

  12. So…. Does anybody have a clue as to why there is this great divide in generations of Veteran benefits?
    I mean some cold hard facts.
    My grandfather was Korea, dad was Nam, these generations paved the road for todays Veterans.

    Why do we separate benefits by eras?

    • I think it’s fair to say that every veteran of the Iraq and Afghanistan conflicts recognizes earlier generations have accomplished and what they set up for us to succeed. It’s also fair to say none of us asked for these additional benefits. Congress gave them to us. so I feel you discussion should be directed to them and any question of unfairness should not be placed on us. We’ve learned from earlier generations to take advantage of what the country has given us and try and give something back. I’m in a classroom teaching middle schoolers today because of the benefits I’ve earned and have used.

      • Mr. Rapaport,

        I hear you loud and clear.
        Maybe I should back up and adjust fire, because my point seems to have landed off target.
        I am not directing my comment to any Afghan or Iraq Veterans, there is nothing in my statement directed to a Veteran personally.

        My comment is simply, when educational benefits legislation is drafted, why would it not be all encompassing? it would be for medical care, correct? we don’t give a younger Veteran better care than an older Veteran do we?

        Some will cite budget, and financial reasons i am sure, the old “trying to push the legislation through” argument, in that it increases the likelihood of a bill passing. I say hog wash. I am taking and educated guess here, but I am sure that if you look at the money consumed in educational benefits from Veterans (and Ben might have stats. on this) it would clearly show that a twenty-something Vet used a high dollar amount of educational benefits, and say, a forty-something Vet used less, and to take that a step further, a sixty-something Vet used even less.

        My point is, including ALL generations in legislation will not severely impact the financial aspect of said legislation, so why not make all educational benefits equal to all veterans?

        As usual, if I am off base, feel free to correct or educate me.

        Thank you,

      • We are a total veteran family. With my husband and I both Veterans. I got out after 13 honorable years and my husband retires next year. We have four children which I raised the last 3 years on my own while hubby geo bached. I agree with the small business loan! I think having the right business plan and some training it would be a successful program. My husband received his AA while on active duty and I received mine before entering the military. I will be completing using my GI bill when he retires and it will be in Equine and Ag fields . My husband wishes to purchase cattle for our farm and I wish to run a small lesson program. It would be great to have start up money so that we can get our business up off the ground.

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  17. With the recent reply to this old thread, I noticed there hasn’t yet been an answer posted in reply to my march 8th question.

    Ben, if you are catching this thread, or ANYBODY out there, is there an answer as to why it’s so difficult to draft legislation that makes ALL veteran benefits equal for all eras?

  18. What about those of us who chose to raise our children and were not able to use our GI Bill benefits in the time period provided? By the time I was ready to go back to school I was three months too late. My fault I suppose, but just how it worked out. To be honest, I feel cheated. Now I run my own online business and need to expand it and have limited funds to do so. Sure would be nice to have something like this to do so. By the way, I did go back to school and now I have loans to pay back! ugh

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