How to Take Advantage of the GI Bill for a College Education

 September 22, 2020
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GI Bill benefits

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If you’re an active duty service member or veteran of the military, you could use GI Bill college benefits to help pay for your higher education. But before you use your GI benefits, it’s important to take a few minutes to understand the complexities.

To learn about these military benefits and how to make the most of them, let’s answer the following questions:

What GI Bill college programs are available?

There are many different ways to qualify for GI Bill college benefits that will enable you to go to college. Especially relevant are the two we’ll focus on here: The Montgomery GI Bill and the Post-9/11 GI Bill.

Before we get started, it’s important to note that each of these programs has different benefits and eligibility requirements. You can find out more about them from the U.S. Department of Veterans Affairs (VA). You can also read these additional resources to see if your desired school works with your benefits.

With that said, let’s get an overview of each:

Montgomery GI Bill

The Montgomery GI Bill is available to those who served at least two years of continuous enlistment, entered active duty for the first time after June 30, 1985, completed high school and had military pay reduced by $100 a month for the first year of active duty. If your military pay wasn’t reduced by $100 a month, you may still be eligible if you meet the criteria outlined here.

In general, you have 10 years from the last day of active duty to use this program. Benefits from the Montgomery GI Bill are paid directly to you and max out at 36 months.

Post-9/11 GI Bill

The Post-9/11 GI Bill is available to those who served at least 90 days of active aggregate service on or after September 11, 2001, or 30 days of continuous service if discharged for service-related disability. If your service ended before Jan. 1, 2013, you have 15 years from the last day of active duty to use this program. If your service ended on or after that date, your benefits won’t expire.

Benefits from The Post-9/11 GI Bill may be paid directly to your school and max out at 36 months. Check out this pamphlet from the VA for more details on this bill.

Which program should you choose?

If you find yourself eligible for both, it can be difficult to figure out which to choose. Hopefully, a few of these considerations will make your decision easier:

The Post-9/11 GI Bill offers more benefits

With the Post-9/11 GI Bill, you receive a stipend for housing, books and supplies. The Montgomery GI Bill college doesn’t come with an additional stipend for these costs.

The Post-9/11 GI Bill makes it easier to attend private schools

Thanks to The Yellow Ribbon Program, you can potentially obtain additional funding should you choose to attend a private school or an out-of-state university. Just make sure your desired school participates with The Yellow Ribbon Program. Try using this tool to search for programs.

The Montgomery GI Bill offers more programs

If a four-year college or university isn’t part of your desired path, then you might want to consider the Montgomery GI Bill. This bill covers certain approved vocational programs, certifications, apprenticeship, correspondence courses and flight training. The Post-9/11 GI Bill doesn’t cover any of these.

Both offer a ‘kicker,’ providing additional funds

Whichever bill you choose, you can potentially receive additional funds with a “kicker.” The title may not sound like much, but the kicker – also called the “college fund” by some branches of the military – can be pretty significant. Some branches offer up to $950 per month.

The thing about the kicker is this: it varies depending on the branch you serve in. To learn more about the kicker and the qualifications you need to receive it, review your enlistment contract, the information on your branch’s website or visit a VA location.

The cost of your school matters

At first glance, it may seem like the Montgomery GI bill is a better deal since it’s paid to you directly, which means you can pocket the difference if there is any. But the amount you receive under this bill is capped at a certain rate. If your school tuition, housing and books aren’t covered under that amount, you could fall short.

On the other hand, the Post-9/11 GI Bill pays your full tuition at any public school – plus extra for housing, books and supplies.

What can you do if you run out of GI Bill benefits?

GI Bill college benefits typically cover four academic school years. But sometimes a life event or change in major can add more time to your education. If that happens to you, here are a few things you can do to keep your education as cheap as possible.

Apply for the FAFSA

In case your GI Bill runs out, you can see if you’re able to obtain grants and/or loans for your education. To access federal loans and grants, you need to submit the Free Application for Federal Student Aid (FAFSA). And if you take out loans, don’t take more than you need. After all, the loans are a debt you’ll have to repay.

Look for additional state benefits

Depending on the state you live in, there may be additional education benefits available to you. The American Legion has a list you can use to search your state.

Load up on courses

If you will need additional time in school, you can keep the costs low by loading up on courses. Take as many as you can feasibly handle and consider winter break and summer break courses as well. As a result, you could shave off an entire quarter or semester of college – and quite a bit of tuition as well.

Apply for scholarships

In addition to the ideas above, don’t forget to apply for scholarships. You don’t have to be an incoming freshman or a star student to earn them. There are many scholarships out there for people of different skill sets, demographics and more. Use scholarship search tools to find scholarships specific to your background or that are earmarked for military members.

Besides that, there are quite a few scholarships for military members. Start out by going to your branch’s website and searching the education section. There, you’ll likely find a variety of scholarships based on the profession you wish to enter. Not all branch’s offer these, but be sure to check just in case.

Consider low-cost student loans

If you’re still falling short, you might consider student loans. But make sure to shop around to find a loan with a low interest rate. Federal student loans are usually your best bet, since they come with relatively low rates and a variety of repayment plans and borrower protections.

But if you max out the limits for federal loans and need a private one, compare multiple options so you can find a loan with the lowest costs of borrowing.

Rebecca Safier contributed to this report.

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1 Important Disclosures for College Ave.

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College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.

  1. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
  2. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
  3. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.

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2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.

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4 Important Disclosures for Edly.

Edly Disclosures

1. Loan Example:

  • Loans from $5,000 – $20,000
  • Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan.
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About this example

The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.

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Citizens Bank Disclosures

  • Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of September 1, 2022, the 30-day average SOFR index is 2.23%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
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6 Important Disclosures for Funding U.

Funding U Disclosures

Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.