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Wednesday, August 3, 2011

A Roundup of Changes to the GI Bill

Since a revision of the Post-9/11 GI Bill was signed into law at the beginning of the year, we’ve made it a priority to explain the changes that could significantly impact students either attending school or about to start this fall. This week, many of those changes are being implemented, and it’s important that students understand how their benefits might be affected.

Why the changes?

Education benefits are now available for folks in the National Guard that accumulated active duty time under Title 32, and expands options for non-degree seeking students, like flight school and apprenticeships. That change puts education benefits into the hands of tens of thousands of Veterans. But to allow more Veterans to take advantage of the Post-9/11 GI Bill (also known as Chapter 33), concessions had to be made to pay for it. Two changes to Chapter 33 will impact just about every student Veteran, and another change will change the way private school students receive tuition payments.

Break pay ends, but eligibility is expanded

Most Veterans are concerned over the loss of break pay, which were payments made during the holiday break and on either side of a summer semester (if classes were taken in the summer). Up until now, VA paid housing stipends for those days out of class. It was a help to students that needed additional income to pay rent. But there’s a catch that not everyone knew about: Those days were subtracted from the GI Bill eligibility time of 36 months. Now, you can use that time for more education. In a four year degree plan, that additional time could add up to a semester or more of education benefits. That means a semester more of tuition and housing stipends. I used myself as an example to explain this concept before:

In between the fall and spring of 2009-2010, my break pay was $1,153 since I was enrolled full time, which would amount to a total of $4,612 break pay for a four year undergraduate degree (the amount of semester breaks will vary from student to student). The cost of just one semester of study at the school I planned on attending was $14,150. If I were to run out of benefits before securing a degree, I would be liable for $14,150 each semester remaining, instead of being out $4,612 but receiving full tuition and housing for the semester.

Most students take several courses that don’t fulfill a degree plan, like prep courses or remedial classes (in my case, three remedial math courses, which amounts to nearly a full semester of classes that fulfill no requirement). Students often need that extra time to avoid the exhaustion of benefits.

Housing payments now prorated

A loophole in the housing payment rules made it possible to get the full housing payment with just one credit over half time. Now, it corresponds with the rate of pursuit, rounded to the nearest tenth. For example, A student that attends school three quarters time will receive 80 percent. Just remember that a student must attend at more than half time to receive the housing allowance.

Private, out-of-state and foreign school tuition capped

This change will affect a smaller group of students, but the changes are nevertheless critical to understand. The new rules signed into law established a national maximum of $17,500 to be paid to private and foreign schools. Schools that elect to use Yellow Ribbon to help defray the cost of tuition to students will continue the program, and some schools are committed to maxing out their contribution so no students are on the hook for tuition. Others just pay part of the balance. If you’re interested in a private school, check with the Veterans service office to see if their Yellow Ribbon contribution pays for the entire balance or just a portion.

The tuition for out-of-state students will be paid up to the in-state level, and just like private schools, Yellow Ribbon can help defray the leftover charges.

Grandfathered students

Recently, Congress passed a law that would grandfather students accepted or enrolled in private schools on or before January 4, 2011, when the new changes were signed into law. Students in Arizona, Michigan, New Hampshire, New York, Pennsylvania, South Carolina and Texas will be grandfathered under the new rules. Active duty folks that attend private school will not be covered under the grandfather clause, and are not eligible for Yellow Ribbon.

As of this writing, the law has not been signed by the President, but we will be sure to update when it gets to his desk.

Changes boost benefits

The three changes above can be seen as either a boon or a bust for some students, but there are other changes that take effect today as well. From VA’s GI Bill page:

  • Allows reimbursement for more than one “license or certification” test (previously only one test was allowed). However, entitlement is now charged
  • Allows reimbursement of fees paid to take national exams used for admission to an institution of higher learning (e.g., SAT, ACT, GMAT, LSAT)
  • Allows those who are eligible for both Vocational Rehabilitation and Employment (chapter 31) benefits and Post-9/11 GI Bill (chapter 33) benefits to choose the Post-9/11 GI Bill’s monthly housing allowance instead of the chapter 31 subsistence allowance.
  • NOAA and PHS personnel are now eligible to transfer their entitlement to eligible dependents

More changes take effect October 1, we’ll be sure to cover them as the fall approaches. Until then, subscribe to VA’s GI Bill Facebook page and bookmark the GI Bill homepage for future updates.

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