GI Bill Tip: Establishing Residency for In-State Tuition

Posted by Jason Van Steenwyk

Tuition costsYesterday, we brought you the saga of Kayleigh Perez, a spouse of an active duty soldier stationed in North Carolina who was denied residency status by the University of North Carolina.

A bit of digging revealed why – and some lessons for other servicemembers and their families as they transition to schools in new states.

Background

Under the new Post-9/11 GI Bill rules, establishing residency in a state system is crucial to maximizing GI Bill benefits, because GI Bill benefits only cover in-state tuition.

Until the beginning of 2011, the Post-9/11 GI Bill would pay up to the highest in-state tuition rate anywhere in the state. Buy as of fiscal year 2011, Post-9/11 GI Bill benefits are capped at the actual tuition for in-state servicemembers. This is true even though the same servicemember would receive even greater benefits – up to $17,500 per year – attending a private institution. The result is a perverse incentive to attend a more expensive school.

This was a big deal for Ms. Perez, because the out-of-state tuition puts the Broke in UNC-Pembroke: it’s $12,219. That’s compared to a price tag of $3,012 if she qualified for in-state tuition, which is all she’d get from the Post-9/11 GI Bill in any case. By selecting Methodist University – a private institution – over the UNC system, Perez can qualify for a benefit of up to $17,500 per year, and potentially pay nothing out of pocket.

So why was Ms. Perez’s application for residency denied? After all, the State of North Carolina grants residency status to active duty servicemembers stationed in North Carolina and to their dependents alike. Well, as with so many things, the devil is in the details.

Timing Matters

Under North Carolina law, residency for service members and their families begins as of the effective date of their orders transferring them to their new command. This means that your wife doesn’t get to qualify for residency status in North Carolina if you send her over first to find a new place for you. And North Carolina doesn’t allow residency based on a set of PCS orders that haven’t been executed yet. The servicemember has to be present in North Carolina and on duty at the new duty station before the beginning of the term for which the service member is applying for benefits.

Per the University of North Carolina:

The active duty service member must produce a “Command confirmation of residency letter” from their commanding officer on official letterhead. In the event that a service member is deployed and their dependent needs this letter – the commanding officer or the family readiness officer can provide this to the dependent. The service member must officially assume the duty station in North Carolina prior to the beginning of the term for which they are seeking the military tuition benefit.

The policy is relatively restrictive on the front end, but it favors the student on the back end:

Suppose Ms. Perez enrolled for the summer semester, and qualified for in-state tuition. But then her husband received PCS orders transferring him to another state on day two of the semester. Ms. Perez would get to finish the entire semester in North Carolina at in-state rates. Further, she can stay at UNC for as long as she’s continuously enrolled. UNC won’t strip her in-state tuition price tag because her husband got transferred somewhere else, as long as she stays enrolled, with one condition: Her husband must still maintain residency in North Carolina, documented on his LES after the second term, and be able to show that residency status for the previous 12 months. As long as her husband’s LES says his home of record and income tax withholding is in North Carolina, his wife is good to go, no matter where her husband is serving.

This is why knowing the specific rules governing residency in your state is important. Each state has its own rules governing eligibility. But in any case, it’s a good idea to secure a command confirmation of residency letter on unit letterhead.

Here’s a sample letter to show your unit clerk, first sergeant, CPO or commander to demonstrate residency for dependents. Here is a sample for the servicemember’s own personal application.

Even if your state doesn’t formally require a command confirmation of residency, it won’t hurt your application to include it anyway. Many times, the decision to grant residency for in-state tuition purposes can be subjective. There’s no kill like an overkill, so make the rubble bounce.

 

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