By Christopher Maag
Getting financial help with college was one of the major reasons why Benjamin Armstrong joined the Marine Corps. But when the veteran of both the Iraq and Afghanistan wars finally started using the G.I. Bill to attend Texas State University in 2004, he accidentally missed out on the Marine Corps College Fund, which would have paid $12,000 toward his education.
"I was not prepared at all" to make the best use of the military's financial aid, Armstrong says.
After a few early stumbles, Armstrong earned his bachelor's degree in 2008 and his master's in 2011. And since G.I. Bill covered the vast majority of the costs, Armstrong finished school with minimal student loan debt.
"I basically got two degrees for $2,000" in student loans, he says. "I just feel blessed and excited."
It's easy to feel overwhelmed by the cost of college. The average university student graduates with over $25,000 in student loans, according to the Project on Student Loan Debt.
Americans owe more than $1 trillion in student loans, more than they've charged on their credit cards.
But there are ways for students of all ages to earn college degrees without racking up mountains of debt. Some, like the G.I. Bill, are well-known, and have been around for generations. Others, including law school programs that wipe away graduates' student loans in return for work in the public interest, may be less well-known but just as helpful.
Whatever the mechanism, most of these alternative ways of paying for college share a similar goal: Helping young people enjoy the opportunities that come with having a college degree without the crushing debt that prevents many graduates from enjoying those opportunities.
"We want to make sure that concerns about debt or income are not stopping any of our students from going out and changing the world in whatever way they choose," says Janet Conroy, a spokeswoman for the Yale Law School, which offers a generous loan repayment program for graduates who pursue low-paying jobs or public service.
Adam Levin, chairman and co-founder of Credit.com, recently proposed a new National Service Corps that would help hundreds of thousands of young Americans pay for college in exchange for two years of service to their country. While larger and broader in scope than any existing service program, there are many precedents for this kind of aid. Here are some of the more popular programs people already use to help pay for college and graduate school.
The grandfather of all college aid programs is the G.I. Bill. Originally introduced in 1944 to help soldiers returning from World War II avoid the unemployment and economic stagnation that often follows major wars, the G.I. Bill has been expanded to help generations of military service members attend college and improve their professional skills.
It's been expanded, and it's also become much more complicated. There are actually two G.I. Bills, plus a host of other programs offered by the Veterans Administration to help veterans and their families go to school. Some of these programs are stand-alone, and can only be used by themselves. Others can be layered one after the other, so that one student can tap multiple programs to obtain a number of different degrees and certificates.
"It is fairly complicated," says Armstrong, who works as coordinator of student veteran services at the University of Texas at Austin. Even though he is immersed every day in the intricacies of the G.I. Bill, he often turns to experienced experts at the Texas Veterans Commission for help answering more complicated questions.
"I haven't mastered it yet," he says.
At its simplest level, the G.I. Bill takes two different forms: The Montgomery G.I Bill, and the Post-9/11 G.I. Bill. The biggest difference between the two is how they pay, says Ron Kness, who retired after 36 years of military service and now helps veterans navigate military's educational benefits for veterans as a G.I. Bill expert on GIBill.com.
Under the Montgomery, the older version of the G.I. Bill, veterans pay tuition, living expenses and other fees from their own pockets, and later are reimbursed by the government up to $1,473 per month for full-time students.
Under the Post-9/11 G.I. Bill, meanwhile, the government pays tuition and fees directly to the school. The bill also pays a monthly housing allowance that varies based on the student's zip code, plus up to $1,000 a year for books.
Many students prefer this newer version of the bill, Armstrong says, because direct payments from the government to colleges makes it easier for veterans to plan their finances.
"The Post 9/11 G.I. Bill is, without a doubt, the best G.I. Bill veterans have ever had," Kness says.
The two bills are not necessarily exclusive, either. If a veteran plans to go for a master's doctorate or other advanced degree, she can start out on the Montgomery G.I. Bill, which covers up to 36 months of schooling. After that, they can switch to the Post-9/11 bill and get an additional 12 months.
"Since the introduction of the Post 9/11 G.I. Bill, it is really common for veterans" to string the different benefits together like this, Kness says. "The 36 months takes them to their four-year degree and the additional one-year get them half-way through their advanced degree."
Nor are veterans limited to attending in-state public universities. Thanks to the Post-9/11 bill's Yellow Ribbon program, students can get additional financial help to attend private schools if tuition at their institution exceeds the $17,500 traditionally paid by the Veteran's Administration. In addition to the different versions of the G.I. Bill, the Veterans Administration offers other financial aid programs for veterans and their families. Here are a few:
- Reserve Educational Assistance Program (REAP), to help reservists called to active duty during wars and national emergencies.
- Veterans Educational Assistance Program (VEAP), in which service members can deduct money from their paychecks to fund later schooling. The government matches these contributions 2-for-1.
- National Call to Service Program. In return for service in the active duty military and the National Guard, students can choose from a range of different education benefits, including a one-time cash bonus of $5,000 or repayment of existing student loans up to $18,500.
- Veterans Retraining Assistance Program (VRAP), which gives up to 12 months of retraining assistance to unemployed, middle-aged veterans to attend community college or technical school.
- Survivors & Dependents Assistance (DEA), which helps the spouses and children of deceased or disabled veterans pay for up to 45 months of education.
If you're considering the G.I. Bill or other military programs to pay for college, the Veteran Administration's website is a good place to start, here. But don't stop there, Kness and Armstrong agree. Scan the Internet for forums, like the one Kness runs as "Ask the G.I. Bill Expert." Each state has its own veterans commission, which is staffed with G.I. Bill experts. Also, every school that accepts funding from the G.I. Bill must have someone on staff to administer it, and these employees often understand how federal and state benefits can combine to pay for more of your education.
"In most cases, the onus is on the veteran to sort through everything and to make the best decision on what they can find," Kness says.
National Health Service Corps
Between college and medical school, the average new doctor graduates with a crushing loan of student loan debt. That debt often changes how young doctors think of their careers
"A lot of my classmates originally wanted to open their own practices," says Rashid M. Rashid, a dermatologist in Houston, Texas. "After school that all changed. They said, 'I have to make my money immediately because I've got so much loan debt.'"
For people who want to practice medicine without the need to make lots of money upfront, the National Health Service Corps offers to repay loans for people who agree to work in underserved, often low-income areas. The corps' Loan Repayment Program offers up to $60,000 in tax-free loan repayment in exchange for two years of full-time service, or four years of part-time.
After two years, corps members can apply to re-up and earn even more money.
"With continued service, providers may be able to pay off all their student loans," says Michelle Daniels, a spokeswoman for the Health Resources and Services Administration, which runs the program.
There are currently over 10,000 corps members across a broad range of professions, including primary care physicians, dentists, social workers and family therapists. Another 524 current students are receiving scholarships from the corps; in return they will be expected to work in underserved communities upon graduation.
Current students cannot necessarily depend on the corps to cover their loans, however. Rather, graduates must already be working at an approved health care site, or have a job offer to begin working at such a site within 60 days of submitting their application, to be considered for a repayment award.
This means that, rather than serving as a stepping-stone to more lucrative careers in medicine or mental health, the National Health Service Corps usually helps people who are committed to serving the poor for years to come. The loan repayment and scholarship program "provides the financial freedom to follow their passion for serving the underserved," Daniels says. "NHSC members typically become part of the communities where they serve, and more than 80 percent remain in underserved communities after they complete their service commitment."
Ben Duda spent two years traveling America building houses, restoring trails and repairing 4-H camps as a member of the National Civilian Community Corps (NCCC), which is part of the federal AmeriCorps program. For all this work he earned just barely enough to live on -- Duda and his fellow corps members pooled their meal stipends together to buy enough groceries to survive.
"It's not glamorous, it doesn't pay well," says Duda, executive director of AmeriCorps Alums, a network of former AmeriCorps members. "I think the appeal has got to be the experience itself."
Duda also received an education benefit of around $5,000 to help pay for college or graduate school. He wound up using it towards his master's degree in public policy from Johns Hopkins University. (Currently AmeriCorps pays education awards of $5,500, but because that amount is taxed, the actual benefit drops to around $5,000.)
That may not sound like much, especially when the average college student graduates with more than five times that amount in student loan debt. But if used wisely, an AmeriCorps education award could make a significant dent in students' college costs.
Since the average tuition at community colleges is $2,963 a year, according to the American Association of Community Colleges, the AmeriCorps education award could cover nearly all the tuition for a two-year associate degree. Many of those credits could be transferred to a four-year pubic university, where tuition averages $8,244.
Meanwhile, the experience of being an AmeriCorps member itself may be just as educational as college.
"It's a way to do some meaningful, impactful work" and decide if that's the kind of work you want to do as a career, Duda says.
AmeriCorps volunteers work on education, health care, community building and environmental projects around the country, often serving in low-income areas. The program includes a number of different volunteer programs, including NCCC and VISTA, which was created in 1965 as the domestic version of the Peace Corps.
About 80,000 volunteers are currently serving the three programs, says said Kate Enos, a spokeswoman for the Corporation for National and Community Service, which runs all three. But even given the modest living stipend and education award that comes with AmeriCorps service, competition for those slots is fierce. AmeriCorps received 582,000 applications for its volunteer positions in 2011, the corporation reported, an all-time record.
Law School Loan Repayment Programs
After graduating from Yale Law School in 2002, Kristen Jackson won a prestigious job clerking for a federal judge, followed by years working to protect immigrant children as an attorney for Public Counsel, a nonprofit law office in Los Angeles.
But Jackson also graduated with $102,000 in student loan debt (which meant about $150,000 with interest.) That translated to monthly payments of $900. Working at Public Counsel, which paid her $35,000 when she started in 2003, Jackson could not afford to both pay for school and follow the career path she loves.
But thanks to Yale's generous Career Options Assistance Program (COAP), Jackson was able to work for years without paying a dime for her student loans. As her income rose, she gradually became responsible for an increased amount of her loan payments.
In the end, Jackson figures COAP will have covered about half of her school debt.
"It made a huge difference," says Jackson, 40. "If I didn't have that loan repayment program, I would definitely not be doing my job, and my career would be much different. There would be no way I could afford it."
Many law schools offer such loan repayment assistance programs. The goal is to remove the pressure many graduates feel to take a job with large corporate firms, which often pay large salaries, just to make enough money to pay off their loans. Yale is famous for being especially generous, and for putting fewer limitations on who can qualify; any graduate who makes below a certain income can receive full or partial forgiveness for their law school loans (the amounts vary based on marital status and other factors.)
That means Yale Law graduates are free to pursue whatever career path they want, whether it be as a lawyer, elementary school teacher or janitor.
"We don't want money to be an impediment for people to follow their dreams of using their law school degree," says Jan Conroy, a spokeswoman for the school. The program costs the school more than $3 million a year.
Other schools handle this task differently. At New York University, for example, law school applicants can try out for Root-Tilden-Kern Public Interest Scholarships, which pay full tuition for three years of law school to top students who pursue careers in public service. Other students can apply for the school's Loan Repayment Assistance Program, which wipes clean their entire law school debt as long as they work in public interest law for ten years after graduation and earn salaries of less than $80,000.
"This commitment to easing the burden of student loan repayment allows our graduates the flexibility to pursue a wide range of careers in nearly every corner of the globe," according to the program's website, "from advocating for homeless youth in New York City to working for death penalty reform in China."
If you're applying for law school and believe that the world of big corporate firms is not for you, you may want to factor each school's loan repayment program into your decision.
Follow Credit.com on Twitter: www.twitter.com/CreditExperts