Veterans: Paying for College

Many military veterans decide to go back to school following their service. But, college can be expensive. Fortunately, veterans have multiple options to fund their studies. As such, we’ll use this article to outline options veterans have for paying for college.

Specifically, we’ll discuss the following:

• Why College Makes Sense for Veterans
• Paying for College, Option 1: GI Bill
• Paying for College, Option 2: Yellow Ribbon Program
• Paying for College, Option 3: VA Work-Study Program
• Paying for College, Option 4: University Scholarships
• Paying for College, Option 5: Deployment Savings
• Paying for College, Option 6: Work and Attend School Part-Time
• Paying for College, Option 7: Federal Loans and Grants
• Final Thoughts

Why College Makes Sense for Veterans

The military can provide tremendous real-world experience to service members. Troops learn teamwork, problem solving, and perseverance, among other skills. However, military service doesn’t always directly translate into life in the “civilian world.” Some veterans finish their service without a clear sense of what comes next. As a result, college can be a great option for veterans. Broadly speaking, three key college benefits exist for veterans:

• Find a job in a new field: Some veterans decide to continue their military job in a civilian role. Many others either A) don’t have that option, or B) want to do something new. A college degree can give you the knowledge and skills necessary to find a job in a new career field.
• Higher pay in a current job: Similar to the military, many civilian jobs require continuing education. For example, many teachers need to complete a master’s degree within a certain period of time. In business, an MBA may provide promotion opportunities. If you’ve already been out of the military for a few years, a college degree may provide you increased pay or promotion opportunities in your current civilian job.
• College as a transition/decompression period: Let’s be honest – military service can be stressful. And, multiple deployments don’t always allow you much time to think about your future. Recognizing this, college can be a great opportunity to decompress and transition into your new life as a civilian.

Considering these benefits, we’ve outlined seven different strategies veterans can use to pay for college.

Paying for College, Option 1: GI Bill

The Post-9/11 GI Bill represents the absolute gold standard of college financing 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.

Paying for College, Option 2: Yellow Ribbon Program

As noted above, 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 financing collaboration between universities and the VA. If your university 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 universities agreeing to pay a portion of the difference and the VA matching that contribution dollar-for-dollar.

For example, if a university 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.

Paying 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 university, the school may pay you the difference between that minimum wage and what it would normally pay for the job.

Paying for College, Option 4: University Scholarships

This option requires more research and effort on the individual veteran’s part. Most universities 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.

Why would I need scholarships if the GI Bill already covers my tuition?

If the 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.

Paying for College, Option 5: Deployment Savings

These next three college payment options are tailored to veterans who plan on paying for school themselves rather than using education 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 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 to pay for college as a veteran.

Paying 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. As such, 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.

Paying 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 to finance 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).

Final Thoughts

Veterans have multiple options to pay for college – some better than others. At the end of the day, the Post-9/11 serves as the absolute best approach for veterans. There’s just no better college payment option, especially when you consider the tax-free monthly housing allowance it includes.

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.