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GI Bill Eases College Costs for Military Families

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As Veteran's Day approaches, this is a good time to remind our active duty service members and veterans about the many education assistance benefits available to them through the G.I. Bill and other government programs. Plus, service members using the most popular GI Bill can now transfer some or all of their benefits to their spouse and children.

Here's a rundown of a few of the more commonly used programs:

Post 9/11 GI Bill. The Post 9/11 GI Bill is more flexible and generally offers more generous benefits than earlier GI Bills. It provides up to 36 months of support for education and housing to individuals with at least 90 days of active duty after September 11, 2001, or those with a service-connected disability after 30 days. An honorable discharge is required.

Approved training includes undergraduate and graduate degrees, vocational/technical training, on-the-job training, online and correspondence courses, and flight training, among others. You will be eligible for benefits for 15 years from your last period of active duty of at least 90 consecutive days.

This program covers 100 percent of tuition and fees for in-state students at public institutions, paid directly to the school. For those attending private or foreign schools, it will pay up to $19,198.31 per academic year (sometimes more in Arizona, Michigan, New Hampshire, New York, Pennsylvania, South Carolina and Texas).

If you attend a costlier private school -- or a public school as a non-resident -- you also may be eligible for extra payment through the Yellow Ribbon Program, where schools voluntarily enter an agreement with the Veteran's Administration to fund tuition expenses exceeding the highest public in-state undergraduate rate. The institution can contribute up to 50 percent of those expenses and the VA will match the same amount.

The 9/11 GI Bill also will pay a books and supplies stipend of up to $1,000 per year, and a monthly housing allowance generally comparable to the military Basic Allowance for Housing for a military pay grade E-5 with dependents, based on the ZIP code for your school. (For more information, click here.)

Family benefits. Another advantage of the 9/11 GI Bill over previous versions: Armed Forces members (active duty or Selected Reserve) with at least six years of service can transfer some or all of their benefits to their spouse and/or children. Here are the basic rules:
  • You must agree to four additional years of service. (Special rules apply if standard policy precludes you from serving four more years or you're eligible for retirement).
  • Because the clock starts ticking from the date you elect to participate and you can't sign up additional beneficiaries after you leave the military, it's best to sign up all family members right away. You can always go back and change allocation percentages or remove beneficiaries at any time until the benefits are used.
  • Spouses may begin using transferred benefits right away; however children must wait until you've served the full 10 years.
  • You and your spouse must use the benefits within 15 years of your leaving the military; children must use them by age 26.
  • The Department of Defense determines eligibility. For more program information and instructions on how to apply for consideration, click here.

Montgomery GI Bill. This older version of the GI Bill may still be available if you didn't already opt for the Post 9/11 GI Bill (your choice between the two is irrevocable). You're eligible if you started active duty for the first time after June 30, 1985, served continuously for three years, are honorably discharged and had your pay reduced by $100 a month for the first 12 months. (There's a separate plan for reservists.)

For most people, this program is less generous than the Post 9/11 GI Bill. Benefits typically expire 10 years after military separation and are not transferrable to family members; plus, you pay tuition and fees upfront and are later reimbursed. This VA website allows you to compare benefits under the two GI Bills.

A few other VA-sponsored financial aid programs include: Our armed services members make enormous sacrifices on behalf of their country. Here's hoping they're able to take full advantage of the educational benefits the government provides.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.