My wife is in the Army. She had student loans from before entering the service and enrolled in the Student Loan Repayment (SLR) plan. The military made payments each year, but it counted as income when tax time rolled around and we were hit with a large bill that we didn't expect.

As I understand it, the GI Bill is not taxed the same way.

Why is one taxed and the other not? The end goal is the same, to help members of our military pay for their higher education.

  • 1
    Are you seriously expecting something done by our government to make sense? :-) – mpenrow Jun 30 '11 at 16:58
  • Not really, but I figured there had to be a method to the madness. – Jason Z Jun 30 '11 at 19:07

The difference is that the GI Bill is a VA program, and by statute, veteran's benefits are not taxed. The SLR is an army program, so it's treated like compensation.

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