The GI Bill provides amazing education benefits for veterans and active duty military members. With tuition costs rising every year, more and more people are taking out student loans to cover the costs of higher education. This leaves many veterans wondering – can I use my GI Bill benefits to repay existing student loans?
Unfortunately, the short answer is no. You cannot request GI Bill benefits specifically to pay down student loan debt that you incurred before or during your military service.
However, there are some smart ways that you can maximize your GI Bill benefits and minimize the need for additional student loans. Here are some tips:
Save Your GI Bill for Higher Tuition Costs
One strategy is to save your GI Bill benefits for when tuition costs will be highest. For example, you could start at a community college and pay the lower tuition rates out-of-pocket or with other aid. Then use your GI Bill for university studies when tuition rates are 2-3 times higher.
The Post-9/11 GI Bill will cover 100% of in-state public school tuition and fees for 36 months For private schools, it covers up to $26,04281 per year. So make the most of this generous benefit when tuition rates are highest.
Take At Least One In-Person Class
If your program is 100% online, you’ll receive a housing allowance based on half the national average BAH However, if you take just one in-person class, you qualify for the full BAH rate for your school’s location.
This can mean thousands more in housing benefits per semester, which helps reduce the need for loans.
Submit the FAFSA
In addition to GI Bill benefits, submit the Free Application for Federal Student Aid (FAFSA) to qualify for other aid like Pell Grants, scholarships, work-study, and low-interest federal student loans.
Pell Grants provided up to $6,895 for the 2021-22 year and require no repayment. Federal Direct Subsidized Loans currently have a 2.75% interest rate and flexible repayment options.
Pick The Right School
Some schools aggressively recruit veterans just to capture GI Bill funding. Do your research and watch out for schools with high tuition, low graduation rates, poor job placement, and a history of targeting veterans.
The VA’s GI Bill Comparison Tool lets you research key metrics on thousands of schools side-by-side.
Earn Credits Quickly
Since GI Bill benefits are limited to 36 months of full-time enrollment, look for ways to earn credits quickly. CLEP exams, prior learning assessments, and community college transfer credits can help you amass credits faster.
The sooner you graduate, the sooner you can enter the workforce and the less need for loans.
Live Frugally
The BAH housing allowance you receive through the GI Bill can be a big help. But living below your means and minimizing housing costs allows you to pocket more of that stipend and rely less on loans.
Get a roommate, live off campus, limit eating out – small frugalities add up.
Work Part-Time
Use work-study programs on campus or get a part-time job to earn extra income. This allows you to minimize borrowing. Even an extra $200-300 per month from working 10 hours weekly can make a significant difference over 4 years.
Consider ROTC
If you have any remaining GI Bill eligibility when you near graduation, joining ROTC can extend your benefits further. You still serve in the military while finishing school. And ROTC provides a stipend, tuition assistance, and other benefits on top of the GI Bill.
Leverage Employer Tuition Assistance
If you reach the end of your GI Bill benefits, employee tuition assistance from companies like Starbucks, UPS, and Home Depot can pick up where your GI Bill leaves off. Some employers offer up to $5,250 per year.
Refinance Existing Loans
While you cannot use the GI Bill specifically for loan repayment, you can use your housing stipend and part-time income to make payments. This helps control overall student loan debt.
And after college, consider refinancing existing federal and private student loans to lower interest rates. This reduces monthly payments and overall interest costs.
- Save your GI Bill for the highest tuition years
- Take a portion of classes in-person
- Submit the FAFSA and leverage other aid
- Research schools carefully
- Accelerate credits
- Live frugally and work during school
- Join ROTC
- Use employer tuition assistance
- Refinance loans after graduation
With careful planning, you can minimize new borrowing and make the most of your hard-earned GI Bill benefits. This puts you in a better position to tackle any existing loans.
What are your best tips for using the GI Bill effectively? Share your thoughts and experiences in the comments below!
Information About GI Bill Overpayments and Debts
If you decrease your training time (i.e. drop classes, leave school, etc.) and we have already processed a payment for tuition and fees, an overpayment will occur. When the School Certifying Official (SCO) notifies us of a change, a debt is created against your account. The school wil issue any refunds in accordance with their internal policy, which may not fully cover the debt with the VA. If the amount refunded by the school does not satisfy the debt, you are responsible for the remainder. â If they refund money directly to you, you must clear the debt with us.
A decrease in your credit hours could also result in changes to your housing allowance and books & supplies stipend. If VA has already issued you a payment for the term a debt will be created on your account.
You are responsible for keeping track of your tuition and fee account balance and payments. Vist your schools financial office regularly to review your account, ensure the charges are correct and that payments and refunds are processed correctly, contact your SCO to ensure the certification information they send to us matches your schedule.
If you have questions about your debt, please call our Debt Management Center toll free at 1- 800-827-0648 (6:30am -6:00pm CT Monday-Friday), contact via Ask VA and select “Veterans Affairs – Debt” as the category, visit our debt management website or write us at: Debt Management Center Bishop Henry Whipple Federal Building, P.O. Box 11930 St. Paul, MN 55111-1930.
Why do I have a debt with the VA over tuition & fees paid to my school?
When you enroll in school and take classes, you enter into an agreement with the school to pay for your classes and the associated fees. VA pays the tuition and fees to the school on your behalf when the SCO certifies that you are enrolled in classes. By law, you are responsible for any debt incurred while receiving benefits under the Post-9/11 GI Bill. VA is required by law to recoup any debt.
You are responsible for keeping track of your tuition and fee account balance. Visit your schools financial office regularly to review your account, ensure the charges are correct and that payments and refunds are processed correctly. Contact your SCO to make sure the certification sent to the VA matches your schedule. Please contact the Debt Management Center (DMC) when you receive a debt letter in order to make arrangements to pay the debt or discuss options if repaying the debt will cause a financial hardship. If you have questions about where the debt came from or how VA processed your education benefits, please call 1-888-442-4551.
The Debt Management Center may be contacted toll free at 1- 800-827-0648 (6:30am -6:00pm CT Monday-Friday), contacted via Ask VA and select “Veterans Affairs – Debt” as the category, by visiting our debt management website or writing to: Debt Management Center Bishop Henry Whipple Federal Building P.O. Box 11930 St. Paul, MN 55111-1930.
Using The GI Bill and the Student Loan Repayment | ARMY
Can I use my GI Bill benefits to pay my student loan?
If you’re enrolled and receiving benefits, you can use your benefit payments however you choose, including student loan repayment. Post 9/11 GI Bill Military Education Benefits and Veteran Education Benefits are timely and important to you. MilitaryConnection.com is proud to provide our audience questions and answers on the Post 9/11 GI Bill.
Do veterans with GI Bill benefits still take out student loans?
Why Veterans With GI Bill Benefits Still Take Out Student Loans | The Pew Charitable Trusts
Should GI Bill students go to school to pay off previous loans?
However, “I wouldn’t recommend that someone enroll in school specifically to get GI Bill benefits to pay off previous loans, as seems to be implied by the second sentence,” she says. “That would seem to be robbing Peter to pay Paul and also skirting the edges of benefit fraud.
What are GI Bill benefits?
GI Bill benefits help you pay for college, graduate school, and training programs. Since 1944, the GI Bill has helped qualifying Veterans and their family members get money to cover all or some of the costs for school or training. Learn more about GI Bill benefits on this page—and how to apply for them.