GI Bill and VA Education Benefits
The federal government and nonprofit organizations offer educational benefits to those serving in the military and their family members. Money for college can be offered to veterans, future military personnel, Active Duty personnel and immediate relatives of veterans or Active Duty personnel.
One of the most widely used resources for military education benefits is the Department of Veteran Affairs (VA). The VA offers education benefits for veterans and their widows and dependents through the Reserve Education Assistance Program, the Veterans Educational Assistance Program, the Survivors and Dependents Educational Assistance Program, the National Call to Service Program and the Montgomery and Post-9/11 GI Bills.
Education benefits from the VA aren’t taxable and won’t be reported as income to the IRS. These include benefits such as the basic housing allowance that is directly deposited to your checking account and the money paid directly for your college tuition. You can’t claim a tax deduction on payments through tax-free education benefits. Expenses that aren’t covered or exceed the amount of tax-free assistance that you receive may be claimed for a tax deduction.
VA Education Benefits
|Aid Program||Who Is Eligible?||Maximum Benefit
|Post-9/11 GI Bill||Served at least 90 days Active Duty after 9/11 and 1 of the following:
Honorably discharged veteran
Discharged with a service-connected disability after 30 days
Up to 100 percent payment of up to 36 months of education benefits, including tuition, monthly housing allowance, and annual books and supplies stipend. Can cover all in-state tuition and fees at public schools, but may not cover all tuition and fees for private and out-of-state schools.
|Montgomery GI Bill Active Duty||Honorably discharged
Has a high school diploma, GED or, in some cases, 12 hours of college credit
Meets the requirements of 1 of the 4 categories listed on the VA website
|Up to 36 months of education benefits. Monthly benefit amounts are based on your training, length of service, category, college fund eligibility and if you contributed to the $600 buy-up program (during Active Duty).|
|Montgomery GI Selected Reserve||Has a 6-year obligation to serve in the Selected Reserve signed after June 30, 1985
Completed initial Active Duty for training
Meets the requirement to receive a high school diploma or GED
Remains in good standing
|Up to 36 months of education benefits. Maximum monthly payment as of Oct. 1, 2014 is $367. This figure is updated annually.|
|Reserve Educational Assistance Program||Certain Reservists who were activated for at least 90 days after 9/11||The maximum monthly payment rate as of Oct. 1, 2014 for 2+ years of consecutive service is $1,373.60.|
|Survivors and Dependents Assistance||Eligible dependents of veterans who are permanently and totally disabled due to a service-related condition or who died while on Active Duty or as a result of a service-related condition||Benefits may be used for up to 20 years after the servicemember’s death for a maximum of 45 months. Current monthly payment for full-time training is $1,018.|
|National Call to Service Program||Meets the 3-tiered service requirement outlined on the VA website||Choice of incentives, including $5,000 cash bonus, repayment of qualifying student loans up to $18,000, 12-month allowance or 36-month allowance.|
The Yellow Ribbon Program provides additional support for tuition and fees not covered under the GI Bill. To use the Yellow Ribbon Program, you must first qualify to use the GI Bill and be attending a participating institution. Through the Yellow Ribbon Program, your college will choose the amount of funds it will contribute toward your tuition and fees, and the VA will match that amount, but this doesn’t always cover your full tuition.
Children and spouses of servicemembers who died in the line of duty after Sept. 10, 2001 are eligible for benefits through the Marine Gunnery Sergeant John David Fry Scholarship. The Fry Scholarship may provide up to 100 percent of tuition, housing allowance and supplies stipend for eligible beneficiaries for up to 36 months. Eligible dependents may also be able to use the Dependents Educational Assistance (DEA) Program to pay for education and training opportunities.
Service grants are another form of financial aid for military members and their families to pay for higher education. Grants are usually awarded based on financial need, and most require applicants to meet specific military benefit qualifications, such as eligibility for the GI Bill. Others have more unique requirements. For example, the Federal Iraq and Afghanistan Service Grant is only open to students who lost a parent or legal guardian to Active Duty conflicts in Iraq and Afghanistan post-9/11.
Further scholarships for military service or for family members of military personnel can be found through multiple major national organizations, including the American Legion, AMVETS, Disabled American Veterans, Paralyzed Veterans of America and Veterans of Foreign Wars. Many smaller veterans service organizations around the country offer scholarships as well.
For future military personnel, the Reserve Officers’ Training Corps (ROTC) offers scholarships based on merit rather than financial need. Most ROTC programs offer two-, three- or four-year scholarships in exchange for a commitment to serve full-time in the military for four years. Though students commit to serving in the military after graduation, participation in an ROTC program doesn’t mean they’re currently enlisted in the military. This program aims to educate and prepare participants for positions as officers in the military.
Paying Loans with Military Service
Military service is also an excellent option for students or graduates looking for a way to help pay off their student loans. Under the Servicemembers Civil Relief Act, the interest rate on federal and private student loans taken out before entering the military will be limited to six percent during Active Duty military service. For Direct Loans disbursed after Oct. 1, 2008, no interest will be charged for 60 months during Active Duty. While serving Active Duty, you’re also eligible for deferment on any of your federal loans. When enlisting in the military, you may request use of the Student Loan Repayment Program (SLRP) to repay federal education loans. The Army and Navy will pay back up to $65,000 of student loans and the Air Force up to $10,000. Each year, 15 percent of the loan balance or $500, whichever is greater, will be repaid by SLRP. These payments are considered taxable income. Private student loans and defaulted loans aren’t eligible for SLRP payment.
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