§325 Incentive Bonus: Savings Plan for Education Expenses and Other Contingencies

Summary

The Secretary can buy U.S. savings bonds for a service member who agrees to serve extra time in a job the Secretary calls "critical." The extra service must be at least 6 years and cannot count time already paid for under this program. Enlisted members show this by reenlisting; officers sign an agreement. How much depends on when the member makes the commitment. If done before 3 years of active duty, the bonds total $5,000. If done after 3 but not more than 9 years, the bonds equal the amount by which $15,000 exceeds any bonds already bought for that member. If done after 9 years, the bonds equal the amount by which $30,000 exceeds any prior bonds. The benefit equals the bond purchase price plus the tax amount that would have been withheld if the benefit were paid as a cash bonus; that tax is withheld like pay deductions. If the member does not finish the required service, they must repay under 303a(e). The bonds are extra to any other special pay. The Defense and Homeland Security Secretaries make the rules.