How to Pay for College As a VeteranUpdated: April 9, 2021
Paying for college can pose a major obstacle to many Americans. Degrees today cost a lot of money. Fortunately, veterans have access to some incredible education benefits that can make college far more affordable. As such, we’ll use this article to outline options for how to pay for college as a veteran.
Specifically, we’ll discuss the following:
- An Overview of College Costs
- How to Pay for College, Option 1: Post-9/11 GI Bill
- How to Pay for College, Option 2: Yellow Ribbon Program
- How to Pay for College, Option 3: VA Work-Study Program
- How to Pay for College, Option 4: School-Specific Scholarships
- How to Pay for College, Option 5: Deployment Savings
- How to Pay for College, Option 6: Work and Attend School Part-Time
- How to Pay for College, Option 7: Federal Loans and Grants
- Final Thoughts
An Overview of College Costs
College is expensive. And, veterans face more education-related costs than simply tuition. As you consider paying for school, it’s important to understand all costs you’ll incur:
- Tuition & fees: These include the direct costs of education. Broadly speaking, tuition represents the costs that all students need to pay directly to the college. Think of tuition as the “sticker price.” Fees, on the other hand, only pertain to some students. Fees are best compared to “a la carte” charges, but unfortunately ones you often don’t have a choice about paying (e.g. orientation fees, lab fees, freshman fees, etc.). While tuition makes up the bulk of these costs, fees can add up to thousands of dollars per year.
- Books: This expense comes as an unwelcome surprise to many veterans. Required college textbooks can cost you over a thousand dollars per year (sometimes significantly more). And, for many classes, these textbooks include assignment-related problem sets, meaning you must purchase the specific edition for the course – not a more inexpensive used but older edition.
- Room & board: These are your living expenses, that is, paying for where you live and what you eat. If you want to live on campus, you’ll pay these directly to the college. With this route, you’ll pay the school and receive a dorm or student apartment and some sort of meal plan. Alternatively, you can live off campus, renting or buying your own place and doing your own grocery shopping. Either way, you need to account for these costs.
- Sacrificed earnings: Lastly, veterans should also consider the costs of not working while attending school. As people leave the military, most consider one of two options: 1) work, or 2) go to school. If you choose school, you inherently lose the earnings you would have made if you had gone to work. Over the long-term, the increased income potential of having a college degree should outweigh a couple years of missed wages, though.
Having outlined these costs, we’ll use the remainder of the article to explain ways veterans can pay for college.
How to Pay for College, Option 1: Post-9/11 GI Bill
The Post-9/11 GI Bill represents the absolute gold standard of college payment options for veterans. Administered by the Department of Veterans Affairs, this program offers eligible veterans the following benefits:
- 36 months of tuition and fees up to the in-state, public school maximum
- A tax-free, monthly housing allowance while enrolled in school
- An annual book stipend of up to $1,000
To qualify for these outstanding benefits, veterans must have served at least 90 days of active duty following Sept. 10th, 2001. However, to receive 100% benefits, veterans must have served 36 months or more of active duty or, if discharged due to a service-connected disability, at least 30 continuous days.
How to Pay for College, Option 2: Yellow Ribbon Program
The GI Bill has a tuition ceiling capped at the in-state, public school maximum. But, many veterans decide to pursue more expensive, private school degrees. In these situations, the GI Bill alone would not cover tuition, meaning that veterans would need to pay the difference.
Fortunately, the Yellow Ribbon Program tackles this problem. The program serves as a payment collaboration between colleges and the VA. If your school has enrolled as a Yellow Ribbon participant, it will receive a certain number of eligible Yellow Ribbon slots per year. If you want to go to college and the Post-9/11 GI Bill doesn’t cover the full tuition, Yellow Ribbon serves a bridging function, with participating schools agreeing to pay a portion of the difference and the VA matching that contribution dollar-for-dollar.
For example, if a college agrees to pay $10,000 in Yellow Ribbon contributions, the VA will match that, meaning you receive a total of $20,000 in tuition above your GI Bill benefits. While this may not cover the entire difference, Yellow Ribbon payments can offset a significant amount of your out-of-pocket tuition expenses.
NOTE: Only veterans with 100% GI Bill benefits can use the Yellow Ribbon Program.
How to Pay for College, Option 3: VA Work-Study Program
The VA also offers veterans the ability to “earn while they learn.” While enrolled in college, the VA allows eligible veterans to participate in its Work-Study Program. This program won’t pay for college, per se, but it will provide you income to offset any degree-related or living expenses. To qualify, you must:
- Be enrolled at least three-quarter time in college, and
- Have found a VA-related job, either at your school or in a nearby VA facility, and
- Be able to finish this work-study contract while still qualifying for VA education benefits, and
- Be using approved VA education benefits to pay for your education
If you meet these criteria, the VA will pay you the federal or state minimum wage, whichever is higher. And, if working at a college, the school may pay you the difference between that minimum wage and what it would normally pay for the job.
In addition to providing veterans some extra cash, this system helps offset the sacrificed earnings cost to attending college.
How to Pay for College, Option 4: School-Specific Scholarships
This option requires more research and effort on the individual veteran’s part. Most colleges offer some form of scholarship, especially ones with larger endowments. And, some of these scholarships are tailored specifically to veterans. When you narrow down the list of colleges you’d like to attend, research the individual scholarships those schools offer.
But why would I need scholarships if the GI Bill already covers my tuition?
If GI Bill already covers your full tuition, it’s not uncommon for scholarships to pay you directly. In other words, if you apply for and receive a scholarship for $10,000 per year, that can be an extra $10,000 in your pocket every year if the GI Bill covers your tuition. However, veterans need to recognize that, in these situations, those scholarship funds would qualify as taxable income.
Bottom line, even if you don’t need to apply for these scholarships, the benefits can certainly justify the efforts.
How to Pay for College, Option 5: Deployment Savings
These next three college payment options are tailored to veterans who plan on paying for college themselves rather than using benefits. For instance, some veterans choose to transfer their GI Bill benefits to a spouse or child. If you’re considering this path but still want to pursue a degree yourself, you still have some other options to pay for college.
When deployed, especially in a tax-free combat zone, you can save a lot of money. Some service members certainly get home and spend this money on a new car or massive weekend in Las Vegas. But, if you plan ahead, you can also set this money aside to pay for college. This requires tremendous foresight and discipline, but it is an option as a veteran.
How to Pay for College, Option 6: Work and Attend School Part-Time
College doesn’t need to be all-or-nothing. In other words, you can attend school part-time. This approach has been made even easier with online degree programs. And, for veterans eager to begin civilian careers, this has the added benefit of letting you begin work immediately following service.
Many civilian jobs do not require a degree to immediately begin working. But, getting a degree may provide promotion opportunities or increased pay within these careers. For veterans in these situations, it may make sense to work full-time and attend school part-time. With this model, you can use your income to help pay for college classes.
This is not an easy approach, especially if you have a family. Working all day then coming home to do your school work requires a ton of time, effort, and discipline. But, it can also provide you a way to pay for college without taking on any debt.
How to Pay for College, Option 7: Federal Loans and Grants
Federal – or any – loans represent the least desirable option to pay for college. As a veteran, you shouldn’t need to go into debt paying for school – too many better alternatives exist. Despite this reality, federal loans remain an option to pay for college. And, if you’re considering loans, federal ones typically offer far better terms than private ones.
The federal government also offers grants for college, which you don’t need to repay. Qualifying for these will depend on your unique financial and personal situation.
If you’d like to apply for federal loans or grants, you’ll need to complete the Free Application for Federal Student Aid (FAFSA).
The Post-9/11 GI Bill provides veterans the best option for paying for college. Between the tuition, housing, and book benefits, you simply can’t find a better program. And, when you combine these benefits with the Yellow Ribbon Program, you expand your options even further. But, for veterans looking for alternatives, other options to pay for college exist, as well.
Maurice “Chipp” Naylon spent nine years as an infantry officer in the Marine Corps. He is currently a licensed CPA specializing in real estate development and accounting.