Tagged: GI Bill
President Obama has signed a broad student loan deal into law last week. The new law restores public subsidies of student loan interest rates, translating to lower costs of borrowing for those taking out federally-guaranteed loans for school.
The new law is expected to benefit about 11 million college students and former students. Some estimates peg the annual savings for the average borrower at $1,500 per year.
The federal government had been subsidizing borrowing costs on Stafford loans, which allowed students to borrow at a below-market rate of 3.4 percent. Student loan interest is also generally tax deductible, so the effective after-tax rate on student loan interest was even lower.
However, the subsidy expired as of July 1, which effectively doubled the rates borrowers had to pay out-of-pocket to 6.8 percent.
The new law restores the subsidy, and should allow students taking out new loans this year to borrow at 3.85 percent for undergraduates. Graduate students, on the other hand, will be able to borrow money at 5.4 percent, while parents of students can borrow at 6.4 percent.
These rates are tied to changes in Treasury rates, but also come with caps: The law provides that the most undergraduates can pay in student loan interest is 8.25 percent per year, while graduate students’ rates are capped at 9 percent. Parents’ rates are capped at 10.5 percent, regardless of what happens to Treasury rates, through the 2015 academic year.
Student loans are becoming an increasingly dicey problem, as total debt increases faster than the availability of jobs for newly-minted graduates and undergraduates to move into after leaving school that compensate enough to pay off the loans while still getting ahead. Total school debt now tops $1 trillion and is approaching $1.2 trillion, while new home purchases for first-time homebuyers have fallen by 29 percent over the last year, according to a recent data release by the National Association of Realtors. The combination of data suggest that student loans and a poor job market are combining to squeeze out other spending by the 22 to 35-year-old demographic.
That’s where your Post 9/11 GI Bill comes in handy, along with possible Tuition Assistance benefits, the Student Loan Repayment Program, and the VA Home Loan program. This combination of benefits can give veterans and servicemembers a leg up against other students when considering their education plans. This combination of benefits can blunt the costs of higher education, and make school a much better value for qualifying veterans than the general population.
The law expires in 2015 – making student loans a sure flashpoint in the 2016 election cycle, which includes a Presidential election.
The new adjusted reimbursement rates for GI Bill beneficiaries for the 2013-2014 academic year become effective on August 1st. Here’s a breakdown:
Benefit Cap for Tuition and Fee Reimbursement for Qualified Institutes of Higher Learning (IHLs)
- Private and Foreign Schools: Up to $19,198.31 per academic year, subject to certain exceptions, outlined below
- Vocational Flight Schools: Up to $10,970.46 (actual net costs).
- Correspondence Schools: Up to $9,324.89 (actual net costs).
- Public colleges and universities for state residents: No cap. The GI Bill will cover all tuition and fees for in-state students.
Max Charge per Credit Hour Max fees per term
Arizona $725 $15,000
Michigan $1,001.00 $19,374.50
New Hampshire $1,003.75 $5,197
New York $1,010 $12,293
Pennsylvania $934 $6,110
South Carolina $829 $2,798
Texas $1,549 $12,130
These rates apply to students attending an institute of higher learning in these specific states who have been enrolled in the same program since January 4th, 2011. The VA will pay the lower of actual tuition and fees combined or the highest public in-state undergraduate tuition and fees.
For non-residents, you may be eligible for additional benefits if your school elects to participate in the Yellow Ribbon Program. To qualify for this program, you must have served on active duty after September 10, 2001, for a minimum of 36 months, in the aggregate, be honorably discharged for a service-connected disability after having served 30 continuous days after September 10, 2001, or be a qualified dependent of an eligible veteran and use the Transfer of Entitlement feature under the Post 9/11 GI Bill.
You can find a list of education institutions participating in the Yellow Ribbon Program here.
Generally, GI Bill recipients enrolled full-time in institutes of higher learning get the same pay as the Basic Allowance for Housing for an E-5 with dependents. The Department of Veterans affairs calculates that based on your school’s zip code, not your address.
There are some exceptions, however, to the VA’s GI Bill monthly housing allowance (MHA) policy:
- Foreign schools: $1,429.00
- Exclusively online programs with no classroom component: $714.50
- ½ time students or less: NO MHA
- Active duty trainee: NO MHA
- Transferee spouse of service member: NO MHA
For non-residents, you may be eligible for additional benefits if your school elects to participate in the Yellow Ribbon Program.
Books: Post 9/11 GI Bill beneficiaries receive an annual stipend of up to $1,000, prorated based on their enrollment.
For more information, visit www.gibill.va.gov
The GI Bill Tuition Fairness Act of 2013 advanced to the full House Veterans Affairs Committee on April 25th. If ultimately passed, the law would allow veterans attending state schools as GI Bill recipients to qualify for in-state tuition, regardless of residency. Educational institutions that do not comply would be disapproved for GI Bill funding.
The law was first introduced by Rep. Jeff Miller (R-Florida) and Mike Michaud (D-Maine) and currently has 42 cosponsors, 24 of whom are Democrats. So the bill has strong early support on both sides of the aisle.
The legislative affairs director of Iraq and Afghanistan Veterans Against the War lent the organization’s support to the bill at a hearing if the Economic Opportunity Subcommittee of the House Veterans Affairs Committee earlier this month, delivering the following statement:
Because of the nature of military service, service members are required to move around according to the needs of their service. Typically that means they are forced to settle down and reside for years in communities outside of their original state of residence. Service members who are stationed at a particular base or post may live in that state for years, buy a home in that state, shop and pay local taxes to that state, raise a family in that state, and generally become part of the community in that locale. However, that service member is technically still not considered a resident of that state. So if he or she retires or ends his or her term of service in that state and wants to stay local and go back to school as a new veteran in the place where he or she has already functionally settled, that service member would nevertheless be considered a non-resident as a new veteran there and would be forced to pay the often-exorbitant out-of-state tuition rates for his or her education there.??
Veterans who wind up living in an area outside of their home states through no fault or choice of their own because of the obligations associated with serving their country in uniform should not be denied the opportunity to use their deserved and earned education benefits to cover the full cost of their education in an area where they have already become functional – but not technical – residents simply because of their military service. This bill would remedy that gap in tuition and residency fairness and ensure that all veterans can take advantage of the promise of the Post-9/11 GI Bill without undue hardship.
The bill also has the support of the American Legion.
“This proposed bill would correct an unfair and widespread financial burden for America’s veterans,” states James E. Koutz, national commander of The American Legion. “Veterans’ education benefits have been capped at $17,500 per academic year, and that is often not even close to covering out-of-state tuition costs. By automatically granting in-state status to student veterans, Congress would remove a difficult burden from our men and women who served their country honorably in uniform.”
The full text of the bill is available here.
Possible downsides include the possibility that some state school systems may find it unfeasible to grant in-state tuition to so many GI Bill recipients. This could be particularly true of certain in-demand, high-status state universities. If they don’t play along, and get their eligibility for GI Bill funding pulled, veterans looking to attend those schools – especially those midway through their degree programs, would be seriously and negatively affected. However, no known education associations or other lobbying groups have weighed in formally against the bill, which enjoys widespread support among powerful veterans organizations.
You want to transfer your Post-9/11 GI Bill benefits to a family member? You must now sign on for an additional four-year hitch. The new requirement applies no matter what your time in service is. Retirement eligible? You’ve already done your 20? Tough. Sign on for an additional four years.
That’ a significant shift in policy: Up until the April 15th announcement, you could transfer benefits to family members with an additional service requirement of one to three years, and in some cases, zero years. The new policy is effective August 1st.
That’s right: The Army and the other services except for the Navy tried to save money last month by eliminating the Tuition Assistance program – until they got smacked by Congress. Now they’re looking for other ways to lower their education/benefits bill. A recent Army Times piece indicates that Congress is quite willing to consider further cuts to pay and benefits, as the federal government moves to tighten up its defense outlays.
Meanwhile, spouses and children benefiting from the transferability of Post-9-11 GI Bill benefits make up about a fourth of all GI Bill educational benefits recipients, an increase of 13 percent over the previous year, according to reporting by Navy Times.
This is going to weigh heavily on soldiers who had planned to transfer benefits to children who don’t start school until the fall semester or later. Money these soldiers planned on using for their own childrens’ education has now gone up in smoke, unless they extend their time in service.
However, according to the Army’s Human Resources Command, soldiers who transfer benefits and who are then involuntarily separated because of a reduction in force will not have to repay the VA for these transferred benefits.
In addition to the RIF exception, the Army also announced the following exceptions:
- The death of the soldier.
- Discharge or release from active duty for a medical condition which pre-existed the service of the soldier and was not service connected.
- Discharge or release from active duty for hardship.
- Discharge or release from active duty for a physical or mental condition not a disability and that did not result from the soldier’s own willful misconduct, but did interfere with the performance of duty.
More details are available on the Army’s website.
Robert E. Lee did it in order to map the “impassible” Pedregal during the Mexican-American War.
George S. Patton did it in order to take Messina Palermo (oh, those garbled messages…).
And now it’s Emmett Middaugh’s turn. It took a year of phone calls, paperwork, and determination, but Emmett Middaugh and the Forest Grove (Oregon) Fire and Rescue created the first on-the-job (OJT) training program in Oregon for students interested in firefighting that allow them to collect VA educational and training benefits.
Emmett Middaugh is studying full time for two associate degrees, fire protection and EMT-paramedics, while also volunteering for a 24-hour shift every three days at Forest Grove Fire and Rescue. That doesn’t leave much time for paying employment. By developing an approved program with the VA, student/volunteer fire fighters are eligible for not just benefits during school terms; if they continue volunteering (now an OJT program), veterans may be eligible for additional (non-school term) benefits through the VA.
Middaugh is the only person in the Oregon program so far. However, Oregon Bureau of Labor and Industry Brad Avakian is hoping to use this program as a template for other military-to-civil service transition programs in Oregon, as well as sharing these types of programs across the nation.
So what does that mean for you? It means the VA is willing to listen to ideas by veterans that can assist veterans. As the cliché goes, “the sky’s the limit.” Contact your local VA office as well as your school’s office of veterans’ services to see just how to proceed and who to speak with to make your program dreams a reality.
Our men and women in the U.S. military don’t just serve a select number of states. They protect all citizens, right? Sometimes that duty requires them to move from state to state or overseas, but we all benefit from their work. So if they meet college admission requirements, and they want to further their education, why would we ask them to pay out-of-state tuition and fees?
That’s the thinking behind Chairman Jeff Miller (FL) and Ranking Member Mike Michaud (ME) of the House Committee on Veterans’ Affairs’ newly- introduced bipartisan legislation (H.R. 357). H.R.357 would require state-operated schools to give veterans in-state tuition rates even though they may not be residents of the states where the schools are located. This would apply to state schools with GI Bill-eligible programs.
So far, says the House VA Committee’s press release, the legislation has been met with praise by the Student Veterans of America and VFW.
This could go a long way toward making college more affordable for student veterans. What do you think? Is this a welcome piece of legislation? Tell us your opinion in the comments below.
Iraq and Afghanistan Veterans of America, a lobbying and advocacy group representing GWOT veterans, has come out in favor of the National Defense Authorization Act of 2013 (NDAA), passed by Congress on the eve of the Christmas recess. Specifically, IAVA applauds features in the bill that favor younger veterans, specifically, as opposed to the older generation combat veterans of the Gulf War, Viet Nam and earlier wars. For example, while Viet Nam-era veterans are now beginning to enter their retirement years, Iraq and Afghanistan War veterans benefit much more from job transition and employment initiatives in the DoD, Veterans Administration and elsewhere.
The IAVA issued a press release lauding the passage of the bill on December 21st, praising the bill’s following features:
• Helping Veterans Transition to the Workforce: The NDAA addresses the significant challenge many veterans face in translating their military training to state civilian licenses and certifications. The NDAA requires states to consider military training and education for civilian certifications and licenses in comparable civilian jobs. The NDAA also enhances and simplifies the Troops to Teachers Program that provides a path for veterans to continue their service as teachers.
• Protecting the New GI Bill: The NDAA helps service members avoid predatory for-profit schools by requiring military bases and posts to review which for-profit schools and their recruiters are allowed access on base.
• Improved Access to Mental Health Care: The NDAA is a big step forward in improving access to and the quality of mental health care for active-duty, Guard and Reserve service members, military families, and veterans. It also establishes a pilot to use community partners to provide mental health services for Guard and Reserves who often struggle to find care. In addition, the NDAA strengthens suicide prevention programs, by both standardizing some of these efforts across the VA and DoD and by creating suicide training and prevention programs for Guard, Reserves and their families.
• Protecting Victims of Military Sexual Trauma: The legislation establishes a DoD Special Victims Units to respond to and investigate all reports of sexual misconduct. It also requires an independent review of all judicial proceedings and investigations on sexual misconduct. In addition, the NDAA mandates improved victim protections and reporting policies. It also requires that the military get its level of care for military sexual trauma victims up to what is done in civilian health care systems.
• Focus Efforts on Traumatic Brain Injury (TBI): The bill mandates detailed planning to eliminate gaps and redundancies in DoD programs on psychological health and traumatic brain injury.
• Addressing VA Claims Backlog: Recognizing the lengthy backlog for getting claims processed at the VA, the NDAA requires the VA to provide a detailed report to Congress on how the claims backlog will be solved. This report is due no later than 60 days after the president signs the bill into law.
Yesterday, 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.
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.
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.
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.
It’s as predictable as the rise and set of the sun: After the school bell rings, the registrar office doors close, and the last freshman finds their class, GI Bill benefits claim forms begin to pour into the VA offices everywhere in a torrential storm. This is not a bad thing, mind you, but the resulting administrative logjam – and delay in payment – always comes as an unhappy surprise to many applicants. Don’t let that be you. Here are a few tips we’ve gleaned from VA employees and students that might help you get your claim processed faster. Or at least it will give you something to read (besides your homework) while you wait.
There are a few things you can do to help your claim get processed:
- Find out who your school’s Veterans certifying official is, and contact him or her directly. Ask if they plan to send your paperwork after the add/drop deadline (the VA receives most claims after) or if they send it as soon as your enrollment is complete. Encourage your VCO to send it as quickly as possible.
- If you add or drop classes – you MUST update your VCO. Changes can affect your payment – especially if you drop below full time status.
- Find out what benefits your school offers to Veterans. Some schools offer scholarships and/or interest-free tuition deferment for Veterans. In some states, Departments of Veterans Affairs and Veterans Service Organizations offer Veterans financial assistance (rent/ bills) if you get behind.
- Go straight to the source. If you know that your school has submitted your paperwork, and you haven’t heard a peep from anyone about your claim, call 1-888-GIBILL-1. Before you call, expect two things: You will have to schedule a call-back appointment. You will have to call them a number of times.
- Take advantage of Twitter. Tweet your questions with #askVBA during their twitter chat session on Thursday, Sept 13 from 3:30 – 4:30 EST.
- Use the VBA Facebook page as a resource – it is regularly updated with tips and information.
Last fall it took an average of 23 days for a GI Bill claim to be processed. According to one VA blogger, the VA hired more than 700 new employees to help process GI Bill claims before the fall 2012 semester in hopes of expediting the process time. The good news is – more Veterans are using their education benefits and pursuing their education goals. The downside is that it might take a little while to get paperwork pushed, I’s dotted and t’s crossed.
In the meantime, get to class, with our thanks.
If you have any other tips, please tell us in the comments below.
Hundreds of veterans did not receive their book stipends or housing allowance on time for the summer semester in Ohio, North Carolina, and West Virginia. For the second time since the implementation of the Post-9/11 GI Bill, veteran students are left in financial limbo because of technical glitches in the system. Many veteran students experienced the same issue in the fall of 2009.
Students in Ohio began calling the VA when payment did not arrive, to be told by the VA that the schools in question did not submit the students’ information. Schools did indeed correctly submit the required information on time. Explanations from the VA include a problem in transferring data from one hub to another and simply just long delays in the system. Veterans using Post-9/11 GI Bill benefits find themselves in classrooms without required supplies and texts, let alone payment for their homes.
Fortunately, most colleges in this are willing to work with students in regard to tuition payments, but this does not address housing or book costs. Some schools, such as Bowling Green State University in Ohio, are even offering short–term zero-percent interest loans to affected students, but many educational institutions are not going that far in their assistance.
You can’t help what happens with paperwork, electronic or otherwise, but you can help being blind-sided by these types of problems. Being proactive and setting up a contingency plan will help you alleviate if not some of the actual issues the extra stressors that accompany these types of situations you have no control over.
- Always have a copy of your DD-214 handy.
- Make sure your information with your college, university, or professional program is correct and up-to-date.
- Keep in steady contact with your school’s Veteran’s Education Office (or whatever they call it). Having a face to go with the name on a piece of paper personalizes you, and that never hurts when you need their help.
- Always have a rainy day fund set aside with at least one-month’s cost of expenses. This is much less than what is usually advised (six months to two years depending on what you read), but if you use the “starving student” scenario, one month of savings is huge. Once that is accomplished, go for two months savings, and so on. Don’t touch it.
- Investigate what short-term emergency financial options are offered by your school should the worse happen.