Fulfilling Their Promise

Transitioning servicemembers can count on the financial boost
and direction long needed in reaching their educational goals.

by Cheryl Gerber, MAE Correspondent

Active and veteran servicemembers got a Much-deserved, historic boost in their college financial aid recently, when congress approved And president bush signed into legislation the 21st century GI bill, doubling the money troops can receive for higher education. There has not been a greater expansion in veterans’ educational benefits since World War II.

Once they’ve completed three years in the military, veterans can attend the most expensive public university in their home state with tuition fully paid for four years or they can apply the amount to the cost of a private university. They also will receive $1,000 per month for housing and living expenses and additional funds for books and tutoring.

NEW BILL PROVISIONS

The new GI Bill includes provisions written by Marine Corps veteran Senator Jim Webb (D-Va) last year to increase educational benefits available to military members, reservists and National Guard members who have served on active duty since September 11, 2001. The benefit amounts depend on the time veterans have served since 9/11, will be paid for 36 months and available for up to 15 years after veterans leave active duty. The bill also allows veterans to transfer unused education benefits to their spouses and children.

“We completely support this bill and its intent. Further NASFAA will do as much as possible to support and collaborate with campusbased Veteran’s Services Offices to insure that information about the new programs and benefits get to as many military servicemembers as possible so they can take advantage of the new financial aid and benefits,” said Philip Day, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA).

The new bill aims at increasing the enlistment and re-enlistment rate based on the success of existing programs, such as the Concurrent Admissions Program (ConAP), a partnership between the Army Recruiting Command and about 1,800 participating colleges. Servicemembers Opportunity Colleges serve as liaisons between Army recruiters, ConAP colleges, Army education centers and the higher education community. The goal of ConAP is to increase the following: 1) the enlistment of active-duty and reserve soldiers, 2) the number of Army soldiers, veterans and reservists enrolled in college and 3) the use of existing Montgomery GI Bill education benefits.

“The positive experience with the Army’s ConAP and the Servicemembers Opportunity Colleges strongly suggest that when veterans gain access to benefits and programs like this, their retention rate skyrockets—up to 70 percent,” said Day. The new bill also will make financial aid easier to understand. “In the past, there were multiple GI Bill programs so it was more difficult to know which program which person fell under. The new bill will consolidate multiple programs under one program, basically,” said Tom Taber, Grant County Veteran Service Officer in Lancaster, Wis. Taber assists active duty, veteran and guard reservists in applying for existing Montgomery Bill as well as Wisconsin state Veteran’s Affairs benefits.

FINANCIAL AID LEADERSHIP

The National Association for Student Financial Aid Administrators (NASFAA) helps financial aid professionals stay current on the changing regulations to assure that servicemembers receive the most aid for which they are eligible. Financial aid directors rely on NASFAA to provide valuable updated information, training and networking opportunities.

The exchange of information is the biggest benefit of NASFAA for financial aid professionals like Jill Pierce Rayner, the Financial Aid Director at North Georgia College and State University. “To me, the most important part of NASFAA is the networking between the financial aid professionals. To have experts in all different fields available to answer questions is extremely important,” she said. NASFAA provides a steady stream of updated information to its members. “Every day NASFAA sends out to its members a newsletter to make sure we stay abreast of all legislative issues. And NASFAA provides outstanding training opportunities. Each year they have a national conference where there are sessions presented by experts in different financial aid topics,” said Rayner.

This year NASFAA held two sessions focused on student aid for active and veteran service personnel. “One session was presented by a representative of both the Veterans Affairs office and the Department of Education and the other was presented by two financial aid professionals from North Georgia and State University,” she said. As part of NASFAA fall training every year, the association focuses on student eligibility. “Service personnel are affected by student eligibility because the student’s veteran status has to be approved by the Veteran’s Affairs office. Due to the quick turn around between when students can finish their tour and start school, there may not be enough time for the Department of Defense to update the records. NASFAA’s fall training helps schools to learn how to resolve this eligibility issue so as not to delay the students’ financial aid,” she pointed out.

HISTORICAL CONTEXT

In September 2007, two pieces of legislation were passed to help fill the gaps in providing aid and benefits to servicemembers. The Higher Education Relief Opportunities for Students (HEROES) Act, started in 2003, was extended indefinitely last September and will provide more leeway for military personnel when applying for financial aid and repaying student loans.

The HEROES Act extension allows servicemembers who receive combat pay to submit their tax returns to their education institutions’ financial aid offices, which can then make adjustments to represent more accurately the current income. “This almost always results in a reduction,” Rayner noted.

To take advantage of the HEROES Act extension, servicemembers complete the Free Application for Federal Student Air at www.fafsa.ed.gov using their current tax returns. They then submit to the financial aid office of the educational institution their tax returns for the prior two years or two years prior to combat pay and the W2 form for each year with a letter asking for the adjustment.

The HEROES Act ensures that those who serve overseas or during national emergencies (such as Katrina) are not harmed during the time they are performing service.

The College Cost Reduction and Access Act of 2007 (CCRAA) was also signed into law in September 2007 to lift a three-year time limit on active military service personnel deferments to repay loans. The deferment is available to military servicemembers on active duty during a war, other military operation or national emergency and includes members of the National Guard and reserve or retired members of the armed forces called to duty who are involved in any of three loan programs—the Federal Family Education Loan (FFEL), the Direct Loan and the Perkins Loan. The deferment may be granted based on a request from the borrower or the borrower’s representation and as of September 2007, the three-year time limit has been eliminated and now there is no time limit on the military deferment.

The new lifting of the time limit, which was effective October 1, 2007, has been called the Post Active Duty Deferment by financial aid professionals since it is for borrowers who enrolled in school when they were called to active duty and they plan to re-enroll after they complete their service.

The deferment is also available within six months prior to the time that they were enrolled in school and borrowers may receive a deferment for up to 13 months following the completion of active duty military service.

It is important for servicemembers to learn about state Departments of Veteran’s Affairs and educational institutional benefits that could supplement federal aid. Naturally, it varies by state and university or college. “There are many states that offer financial aid benefits to veterans, their children and their spouses. Veterans should contact their state financial aid offices to make sure they are receiving all the benefits they deserve,” pointed out Rayner. “Wisconsin has a veteran’s trust fund used for state veteran’s programs like general purpose loan programs or grants for eyeglasses, hearing aids or dentures and there’s an education reimbursement grant that reimburses tuition at the end of the semester,” explains Taber. “In addition, Wisconsin has a 100 percent tuition waver for its state university system. In some cases, the spouses and children also get the 100 percent tuition waiver,” he said.

Other states and educational institutions in Arizona, Ohio, New York, California, Texas and Florida expanded their financial aid offerings to active and veteran service members in July right after the new federal GI Bill was signed. The University of Arizona, Syracuse University in New York, UCLA, Florida State University and Cleveland State University (Ohio) are examples.

The Ohio GI Promise, for instance, changes Ohio’s residence requirements to allow all veterans of the U.S. Armed Services, their spouses and dependents who choose to attend Ohio colleges and universities to do so at in-state tuition rates, among other aspects of the program.

BENEFITS IMPLEMENTATION

Given the sheer volume of details in active and veteran servicemembers’ individual circumstances in the Department of Defense, the Department of Veterans’ Affairs and educational institutions, eligibility issues can be complicated. The main categories in the existing Montgomery GI Bill require regular review, along with the changing regulations. The Montgomery GI Bill will remain the principal provider until August 1, 2009, when the new GI Bill takes effect. Veteran’s Affairs must first develop regulations for administering the new GI Bill and will begin accepting applications once the regulations have been established.

“The VA will begin accepting applications at regional educational centers in the late fall of 2008. When students apply, they should send the application to the regional VA educational center or the county where they are from,” said Taber.

Currently, it takes 60-90 days for eligible soldiers to receive the first disbursement of their Montgomery GI Bill aid and benefits, Rayner said.

The Montgomery GI Bill (MGIB) was also called Chapter 30 once it received VA regulations. Other examples are Chapter 31, the Vocational Rehabilitation and Employment (VR&E) program, which assists service-disabled veterans to prepare for, obtain and maintain suitable employment or prepares the severely disabled to live independently. Chapter 32 is the Post-Vietnam Era Veteran’s Educational Assistance Program (VEAP) for those who entered active duty 1977 to mid-1985. The new GI Bill will be Chapter 33 after the VA has applied regulations.

Until Chapter 33 takes effect, servicemembers will continue with Chapter 30, which provides up to 36 months of education benefits to eligible veterans for college; technical, vocational or correspondence courses; apprenticeship/job training; flight and high-tech training; licensing and certification tests; entrepreneurship training and certain entrance examinations.

To be eligible, veterans much have an honorable discharge and a high school diploma or GED or 12 hours of college credit and meet one of the requirements of the four categories under Chapter 30. The first category applies if the veteran entered active duty for the first time after June 30, 1985, had military pay reduced by $100 per month for the first 12 months, continuously served for three years or two years if that is what was enlisted for, or two years if the veteran entered the selected reserve within one year of leaving active duty and served four years.

The second category under the Montgomery GI Bill is for those who entered active duty before January 1, 1977, served at least one day between October 19, 1984 and June 30, 1985 and stayed on active duty through June 30, 1988 or June 30, 1987 if the veteran entered the Selected Reserve within one year of leaving active duty and served four years. For this category, veterans had entitlement left from the Vietnam Era GI Bill on December 31, 1989.

Category three covers those who do not fall under the first two categories who were on active duty on September 30, 1990 and separated voluntarily after February 2, 1991 or involuntarily on or after November 30, 1993. It also includes those who voluntarily separated under either the Voluntary Separation Incentive (VSI) or the Special Separation Benefit (SSB) program. It also covers those who had military pay reduced by $1,200 before separation.

The last category covers those who were on active duty October 9, 1996 and had money remaining in a VEAP account on that date and elected MGIB by October 9, 1997. It also covers those who entered full time National Guard duty under Title 32 USC between July 1, 1985 and November 28, 1989 and who elected MGIB during the period October 9, 1996 through July 8, 1997. The final requirement applies to those who had military pay reduced by $100 a month for 12 months or made a $1,200 lump-sum contribution.

The monthly benefit paid is based on the type of training a servicemember undertakes, the length of service, the category and whether the DOD added money to the MGIB fund, called kickers. Servicemembers generally have 10 years to use MGIB benefits, give or take some time depending on circumstances.

Taber explains how current benefits are based on the number of credits. “The existing Montgomery GI Bill has paid them just a monthly allowance based on the numbers of credits they were taking. Full time is 12 credits or more. If they are full time, then the base pay was $1,000 per month. For three quarters time, which is seven, eight or nine credits, the base amount is $800 per month. This was supposed to cover everything—housing, tuition, supplies, transportation, etc. Kickers or bonuses gave them additional money. Some people could get $2,500 per month if they had served a longer enlistment than two years, and they were in a military job that paid them kickers,” Taber said.

“It’s still the case that the longer the servicemembers serve, the more benefits they receive,” he added.

‘REAL WORLD’ APPLICATION

The transition from military service to managing financial aid during student life can be a challenge with particular areas to watch out for. “One of the most common challenges is standard of living. It requires deferring gratification until after graduation. It means fewer dollars for entertainment, living in modest housing, driving a modest car and avoiding consumer debt,” said Craig Munier, Director, Office of Scholarships and Financial Aid University of Nebraska, Lincoln.

A high monthly car payment can become a burden when trying to make ends meet, for example. “It’s a common pitfall because a car payment is not usually figured into educational expenses, so students have to manage their budget carefully,” said Munier Munier recommends planning early. “If students are planning to enroll in the fall, then they should start applying for financial aid in January and February with April 1 the final deadline,” he said.

For veterans of the U.S. armed forces, the income used to determine financial aid eligibility is based solely on the income earned from the military and not on their parents’ income. “Military students’ eligibility is based on the previous calendar year of military income but if their income is significantly reduced because they are leaving the military to go to school, then they can ask for a special circumstances application which would be based on estimated projected income and this can often result in the student qualifying for greater federal financial benefit,” Munier said.

One of the chief hurdles in working with veterans is encouraging them to fill out applications correctly. People tend to try to fill out the application too quickly and that results in errors that stall the process of administering,” said Taber.

Rayner would like to see increased collaboration between educational institutions and veterans’ groups. “One of the key challenges for colleges and universities will be to create collaborations between offices on campus and veterans’ groups to inform veterans about benefits and ensure that eligible veterans can easily access aid,” said Rayner. ♦