WASHINGTON — A new GI Bill that dramatically improves educational benefits for Iraq and Afghanistan veterans was signed into law today as part of a $162-billion bill to pay for the Iraq and Afghanistan wars.

Sen. Daniel Akaka, D-Hawai'i, chairman of the Senate Veterans Affairs Committee, said he was pleased that Congress was finally able to provide the increased benefit to wartime veterans, those serving since Sept. 11, 2001.

"This new GI Bill will not only shape the nature of today's military, it will also shape the future of the military, and our nation, for many years to come," said Akaka, a co-sponsor of the bill. "We recognize that the ability of our armed forces to attract and retain quality personnel in the future — and consequently our national security depends on how we meet the needs of those serving today."

The new law increases the education benefit for service members, including the National Guard and reserves. It would provide up to 36 months of benefits, enough to pay for four academic years of school.

The proposed benefit, to become effective on Aug. 1, 2009, would pay tuition and fees for the most expensive public university in the state where the veteran resides and includes a housing allowance and up to $1,000 for books and supplies.

The benefit also could be used to pay tuition at more expensive private institutions, if the school also helped the veteran with the cost.

The new law also includes a 20 percent increase in the current GI Bill to $1,321 a month from $1,101 a month for veterans attending school until the new program takes effect.

"This bill properly provides a modern and fair educational benefit to address the needs of those who answered the call of duty to our country — those who moved toward the sound of the guns — often at great sacrifice," said Sen. Jim Webb, D-Va., sponsor of the bill.