Why Veterans Are Saluting Business Schools

The Yellow Ribbon program, a new package of benefits for returning GIs, makes it easier for higher ed to recruit veterans—and business schools are signing them up

By Alison Damast

This story idea came from BusinessWeek reader Andrew Rinehart, a first-year MBA student at Wake Forest Schools of Business. He is a veteran of Operation Iraqi Freedom and one of two first-year students at the school who are veterans.

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Stacy Poindexter Owen, dean of admissions at the Wake Forest Schools of Business (Wake Forest MBA Profile), has been on a mission for the last decade to get more applicants with a military background to apply to her school. When the Graduate Management Admissions Council (GMAC) launched Operation MBA in 2005, Wake Forest was one of the first schools to sign up for the program, which deems a school military-friendly if it offers scholarships and deferment flexibility to military candidates. Owen also recently hired a former lieutenant colonel for a job on her admissions team; his primary responsibility is to develop a formal military recruiting program for the school.

But perhaps her biggest opportunity yet to recruit veterans came this summer when the school decided to participate in the Yellow Ribbon program, an initiative created by the Post-9/11 Veterans Educational Assistance Act of 2008. Under the program, the federal government matches, dollar for dollar, any financial aid that participating schools commit, essentially providing eligible student veterans with free or reduced-cost tuition. It's designed to make out-of-state public colleges, private institutions, and graduate programs more affordable for veterans.

More than 1,100 colleges and universities signed up with the Veteran Affairs Dept. for the Yellow Ribbon initiative, which involves some 3,400 schools and programs within those institutions. While the VA is still compiling data from all the schools on how many veterans have enrolled, it is pleased with the institutions’ response, says Keith Wilson, the VA's education service director. In addition to undergraduate programs, law, business, medical, and other professional schools are participating. The Post-9/11 bill, which was signed into law on June 30, is expected to cost about $62 billion over 10 years.

Dozens of business schools like Wake Forest have signed up for the Yellow Ribbon program this school year, hoping to encourage more veterans of the wars in Iraq and Afghanistan to apply. Wake Forest's business school signed on this summer, committing $6,000 per student of tuition reimbursement for qualified applicants—$12,000 with the government match. "It was really a no-brainer for us," says Owen. "We have always been happy with military candidates. The recruiters like our students, so we said, 'Absolutely we will sign on.' "

surge in participants expected

With the Yellow Ribbon program, graduate schools are aiming to take advantage of what they anticipate will be a flood of interest from qualified applicants. According to the VA, there will be an estimated 440,000 participants this year in the new Post-9/11 GI Bill, which is aimed at veterans of conflicts since the terrorist attacks of September 11. That’s nearly 40% higher than the number of veterans last year who used the Montgomery GI Bill, previously the standard way for veterans to get education benefits. Many also will be eligible for the Yellow Ribbon program, which requires that veterans have served active duty for 36 months, among other stipulations. In addition, more veterans than ever will be eligible for education benefits, including those ROTC and Service Academy officers and Reserve and National Guard members who didn't qualify previously under the Montgomery GI bill.

Under that bill, the base educational benefit that veterans received was a fixed $1,321 per month, no matter what college the veteran attended or his or her subject of study. The new GI bill benefits are based on a much more complex set of factors, including eligibility, the state where a veteran chooses to study, and whether or not he or she decides to study at a public or private institution. It is available for service members who were on active duty for 90 days or more since Sept. 10, 2001, as well as members of the Air Force, Navy, Army, and Marines on active duty.

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