The Relationship of Military Education Benefits and Scholarships

When considering how to fund college after spending time in the military and becoming eligible for GI Bill education benefits, veterans are smart to consider how multiple financing tools work together. Fortunately, military veterans do not automatically suffer a negative setback in terms of their military benefits just because they are also eligible to receive a separate student scholarship or student loan. Unlike regular educational grants, military benefits have been earned by service.

How it Works

Specifically, when a student is about to start college or is in college, he or she needs to fill out a Federal Aid Form for Student Assistance, or FAFSA. This federal government form consolidates all the student’s information as well as existing assets and resources and then puts it into a database. That database can then be used by agencies in determining financial assistance for a student as well as seeing what has already been awarded to the individual. Every veteran and student should apply because grants and subsidized loans are often awarded simply based on a verified need and application versus competition. For military veterans in particular, Pell Grants are often awarded, providing as much as $5,500 per school year.

However, a veteran student still needs to keep in mind that while he is eligible for the GI Bill benefits, the Veteran’s Administration will only reimburse costs if they are not already paid by some other means. So, while a veteran is eligible to receive military education benefits, the following amounts can be limited in individual cases:

• All public school tuition and fees for an in-State Student,
• Up to $19,198.31 per academic year National Maximum for an overseas program student or going to a private school,
• A $1,000 stipend for annual school books and supply needs based on enrollment (i.e. $500 if half-time, $1,000 if full-time), and
• A single payment of $500 for students in highly rural areas under certain conditions.

The VA won’t pay tuition and related fees if another resource already exists to pay them. This filter is due to Congressional changes to the Post 9/11 GI Bill. So, for example, if a student has a private scholarship or state grant covering 50 percent of tuition, the VA will only reimburse the other 50 percent and not more. The idea is to make sure veterans get an education, not a financial windfall in the process.

Fortunately, scholarships and grants that are generated by a FAFSA selection are not considered part of the reduction formula noted above.  So if Charlie in California gets a Pell Grant from the FAFSA process for $5,000 to go to UC Berkeley, he is still eligible for his full GI Bill military benefits as well.

In Summary

As a result, it’s important for a veteran to understand how private and public scholarships and grants affect earned military education benefits. The rule of thumb in most cases is to use available outside resource first, and rely on the military benefits for whatever else is needed in terms of schools costs. This includes supplies, books and lodging. That way, scholarships and grants are used up before they expire. The military benefits will remain and are not time limited.