This is the second article in a series covering the many financial benefits for U.S. military members. Part one is Guide to Military Benefits for Retirement, Pay and Savings.
The U.S. government has a variety of education programs available to service members to ensure they have ample opportunities before, during and after their military service period. These benefits offer affordable paths toward further education for individuals who are interested in military service, are already serving or have completed their service commitment.
Often, service members enlist in the military immediately after high school and do not have the time or money to pursue any higher education. These programs make further education a realistic possibility. Some education programs can also be transferable to a dependent, such as a spouse or child, helping to build generational wealth.
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Whether it is for a parent, teenager, service member or veteran, taking advantage of these programs can significantly impact one's financial future by providing access to affordable education and valuable career opportunities. There are many education and scholarship benefits available through a variety of organizations. In this article, we will explore an overview of the military education benefits and how these benefits can be strategically leveraged in financial planning.
Pre-military service
For those early in their career seeking a college education and wishing to serve in the military, there are a couple ways to receive reduced or even free tuition. Depending on the branch of service, the options vary. Once students complete one of these programs, they are required to serve a minimum commitment, usually five years.
Service academies. The Air Force Academy, Coast Guard Academy, Merchant Marine Academy, Military (West Point) Academy and Naval Academy are the five service academies in the United States. While the admission requirements vary and some require a letter of recommendation from a member of Congress, they all provide students with a prestigious education and a commissioning as an officer.
In addition, students do not pay for tuition, textbooks, uniforms or room and board. Students also get a monthly paycheck while attending school, are considered active duty and may be able to transfer to a different branch of service upon graduation.
Although this time does not count toward a military pension, it can count toward federal service and a federal pension for those who work for the government outside of the military after their service commitment.
Senior military colleges. The Citadel, Virginia Military Institute, Norwich University and other senior military colleges provide a transition to military service and have much higher acceptance rates than service academies. These schools are highly rated for their coursework and leadership training for students but do not require students to serve in the military upon graduation.
While each has different requirements, students attending may choose to participate in the respective corps. From there, they can receive a commission as an officer upon graduation and go on to join any branch of service.
Reserve Officer Training Corps (ROTC). ROTC programs are available at colleges and universities across the country. They give students the opportunity to attend the college of their choosing and begin their service commitment after graduation. They will have service-related requirements while attending school, but if accepted into a program, they may receive a scholarship that covers tuition, fees and books (or room and board) as well as a monthly living stipend.
Depending on the branch, students may be able to apply as early as junior year of high school as a part of Junior ROTC.
Undergraduate programs. There are a variety of programs available to either assist with education costs, provide a signing bonus or repay student loans. They differ by branch of service. The biggest benefit here is that there may be little to no service-related requirements while attending school.
For example, the Navy has four programs that can provide signing bonuses and monthly payments to students depending on their career path. In addition to the benefits provided by Federal Student Aid for active-duty members, each branch also offers student loan repayment opportunities.
National Guard. While each state offers different benefits, joining the National Guard in college offers opportunities for tuition assistance. The difference between the National Guard and the other programs described above is that an individual is in a reserve status while attending school and must complete the minimum drill requirements to remain eligible.
Specifically designed for post-secondary education, there are limits to how much tuition assistance will be provided, and individuals are often required to serve two to four years of active or reserve duty upon completion of their courses.
During military service
Tuition assistance. Similar to the tuition assistance opportunity for National Guard members, active duty and reservists may also take advantage of monetary assistance toward the cost of courses. The program has a maximum amount per school credit and a maximum amount for each fiscal year and will cover only the cost of tuition and course-specific fees, but this can be used for a variety of schooling, including vocational/technical, undergraduate, graduate, independent study and distance-learning programs.
In addition, service members must have enough time remaining on their service commitment to complete their course and may incur an additional service obligation.
Student loans. In addition to the student loan repayment mentioned earlier, under the Servicemembers Civil Relief Act (SCRA), interest on student loans obtained prior to service is capped at 6% during periods of active duty. Student loan forgiveness is possible for veterans provided they meet the eligibility criteria. Individuals who have served in the U.S. military qualify for student loan forgiveness on certain loans after making 120 qualifying monthly payments and working full time.
Although 10 years is a long time, after meeting the requirements, the remaining balance could be completely forgiven!
DoD COOL. The Department of Defense Credentialing Opportunities On-Line (COOL) is a great resource for all government employees. It is designed as a workplace professionalization tool to assist those transitioning to a civilian job and provides links to credentials. The website can direct individuals to specific credentials based on their experience and qualifications they earned while in the military or as a government employee.
In some cases, it can also provide payment for some or all of the cost in obtaining the equivalent civilian credential.
United Services Military Apprenticeship Program (US MAP). This military training program provides enlisted members of all branches of the military, either on active duty or full-time reservists, an opportunity to train under a civilian apprenticeship. They must have at least one year remaining on their enlistment and must choose a trade that is equivalent to their current primary military job.
This allows members to receive training and valuable work experience. It does not cost anything, and they can gain certification in the equivalent civilian field in which they already have years of experience within the military.
DoD SkillBridge. The DoD SkillBridge allows individuals nearing the end of their service commitment, while still on active duty, to bridge the gap between their military and civilian careers. During the last six months of active duty, a service member may be able to gain experience through industry training, apprenticeships or internships while still receiving full military compensation and benefits.
There are opportunities across the country. However, written authorization and approval from chain of command is required before applying.
Post-military service
One of the most well-known education programs offered to military members is the GI Bill, but it is not the only one. While some of the following programs are not restricted for use by veterans only, they do require a minimum service requirement before being eligible.
The Post-9/11 GI Bill and VR&E programs explained below have two incredible features. First, as long as the service member was discharged on or after January 1, 2013, the benefits never expire! Second, if covered under the GI Bill or Veteran Readiness and Employment (VR&E), service members and eligible dependents may be able to receive in-state tuition rates while attending an out-of-state school.
GI Bill. The GI Bill, formally known as the Servicemen's Readjustment Act of 1944, revolutionized education and training opportunities for veterans with benefits for eligible veterans, including financial support for higher education, vocational training and apprenticeships. The Post-9/11 GI Bill, a modern iteration of the original bill, offers a more expansive educational package that covers tuition and fees, as well as money for books, supplies and housing.
This benefit not only empowers veterans to pursue their educational aspirations but also contributes to their successful transition into civilian life. Most service members receive up to 36 months of benefits. Also, all benefits received for GI Bill programs are tax-free!
Transferring GI benefits
Through the Post-9/11 GI Bill, some or all of the available benefit can be transferred to a dependent. The service member must have completed at least six years of service, agree to serve for four more years, and any dependents must be enrolled in the Defense Enrollment Eligibility Reporting System (DEERS).
The agreement to serve four more years is important and often overlooked. Once a service member has a dependent, such as through marriage or the birth of a child, they can transfer one month of their benefit to them. This opens the window to transfer more in the future and starts the clock on the requirement (four years). This does not affect service members using the entire benefit for themselves or changing a beneficiary down the road.
If a service member does not meet the four-year requirement, either through continued active or selected reserve duty, then it will simply negate the transfer and revert back for use.
Yellow Ribbon Program. Where the GI Bill ends, the Yellow Ribbon Program picks up. Specifically designed to pay for higher out-of-state schools, private school, foreign school or graduate school, this program can help eligible individuals pay as little out of pocket as possible. The eligibility requirements are very similar to those of the GI Bill. However, the school the person chooses to attend must also participate in the program.
That being said, a quick search will show that there are thousands of schools that participate at some level. Once approved, the school will contribute a certain amount toward tuition and fees only, and the VA will match that amount.
VR&E. For veterans who cannot follow traditional employment paths due to service-connected disabilities, the lesser-known VR&E (formerly called Vocational Rehabilitation and Employment) program offers personalized support and guidance. Through vocational counseling, education and training assistance and job placement services, VR&E aims to equip disabled veterans with the skills and resources necessary to enter the workforce in a new capacity.
This program recognizes that transitioning from military service to civilian employment can be challenging, especially for those with disabilities, and seeks to bridge that gap effectively.
The eligibility and benefits differ slightly from the GI Bill, but it is possible to use them in conjunction with each other. If eligible, using the VR&E first does not reduce one’s benefits for other programs such as the Post-9/11 GI Bill. The other upside of using this program first is the ability to get approved for up to 48 months (compared to 36 months for the GI Bill), or possibly more in certain situations.
Military education benefits and financial planning
Utilizing military education benefits is an investment in one's future earning potential. By gaining advanced degrees, certifications or training while in the military, service members can position themselves for higher-paying jobs and increased earning potential over the span of their careers. This can result in more substantial savings and investments toward reaching one’s long-term financial goals, like buying a home, funding children's education and preparing for retirement. These benefits can significantly reduce expenses, minimize student loan debt and provide a livable income during educational pursuits.
The U.S. military's financial benefits reflect the nation's commitment to its service members and veterans. As these programs adapt to the changing needs of service members and veterans, it is crucial for individuals to stay informed about their eligibility and the application processes. By taking advantage of these benefits, veterans and their families can forge brighter futures and build upon the legacies of their service to the nation.
While these ever-changing waters can be difficult to navigate, working with a financial adviser who is well-versed in this environment can be instrumental in maximizing opportunities and ensuring a strategic approach toward long-term financial well-being.
This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy. This information may include financial planning recommendations or investment strategies; however, there is no guarantee that such recommendations or strategies will prove to be correct, and they also may change without notice. We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.
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