November 26, 2012

Scholarships, Financial Aid, and your GI Bill

Many veterans, servicemembers, and military family members don't apply for college financial aid, because they feel that they don't need it, or won't qualify for it.  However, most colleges strongly suggest it, and here's a few reasons why:
  • Financial aid can be used to secure your enrollment while you're waiting for VA funding, so you don't have to pay "up front" and wait for VA reimbursement
  • Financial aid is a good "backup" plan in case of delays in VA processing
  • Most forms of financial aid can also be used for books, technology or lab equipment, school supplies, room & board, transportation, childcare, or any other expense related to your education
  • You might want to save your VA educational benefits for a future term, in which case you can use financial aid to cover your current-term expenses
  • You might want to transfer some of your VA benefits to a family member (if you're eligible), and use financial aid to cover your own expenses instead
  • You'll eventually exhaust your benefits; careful management of your benefit entitlement and financial aid awards will help you maximize your benefits and achieve your educational goals
  • VA benefits are usually not counted as income on financial aid applications, which means you may qualify for more money than you think!
There are basically four forms of financial aid available to college students:
  • Federal (Title IV) Financial Aid, which includes the Pell grant, work study awards, subsidized and unsubsidized loans, and parent supplemental loans.  To apply, go to www.fafsa.gov.  You will need to apply every year, and can apply as early as January 1, but you'll need the previous year's tax information to complete your FAFSA.  Check with your school's financial aid office to find out when the priority application deadline is, usually early spring.  After the priority deadline, you can still apply for financial aid, but funds are usually awarded first-come, first-served until all awards are gone.  The Pell grant does not need to be repaid, but the loans do.  It's usually a good idea to fill out the FAFSA to have a financial aid record on file, even if you don't need it and decline any offer of student loans.  If your situation changes and you find that you need that loan after all, you can usually get it fairly quickly (in a few days), once you've been approved.
  • State awards vary by state; check with your school's financial aid office for more information.
  • Campus awards may include scholarships, grants, tuition waivers, teaching assistant-ships, research awards, fellowships, stipends, loans, a campus job, or any combination.  Again, check with your school's financial aid office for more information.  Most schools will automatically consider you for applicable state and campus awards once you complete the FAFSA, but some awards may need additional information or an application.
  • Private funding comes from any source not affiliated with your college or state, and may include scholarships, grants, tuition subsidies, or fellowships from civic organizations, religions organizations, clubs, fraternal orders, banks, local businesses, employers, philanthropic organizations, charitable foundations, unions, private foundations, etc.  There are many websites that list scholarship opportunities; avoid references that charge a fee for information.  For veterans and military families, a good resource is the National Resource Directory, http://www.nrd.gov/.   Eligiblity criteria, application procedures, funding amounts, and deadlines vary by award, so take the time to research them carefully.  Here's a tip: smaller scholarships are not as competitive, so you may have a better chance to nab several small awards rather than one big one!
If you're using the Post-9/11 GI Bill, there's one big catch that you need to keep in mind: the Net Payer Rule.  This rule went into effect on August 1, 2011, and may significantly impact your net financial award package.  Take the time to read the information below, and compare it against the financial aid awards you have or are considering applying for.  You may not want to spend the time on an application if the funds will be subject to the net-payer rule.

Net Payer Rule:  Under Public Law 111-377, any funding you receive that is paid directly to the University, and specifically for the sole purpose of defraying tuition and fees, must be applied before your Post-9/11 GI Bill and subtracted from the total tuition and fees reported on your enrollment certification.

What this means for you: if you receive a waiver, scholarship, or grant that pays your tuition and fees, you don’t get a refund of excess VA money. Plus, if you are retroactively awarded a waiver, scholarship, or grant that pays your fees, your school must return your excess VA money back to the VA.

Your responsibilities: You must ensure you are certified only for courses that satisfy graduation requirements, and that any restricted funding is subtracted from your reported tuition and fees. Ultimately, it’s YOUR responsibility to make sure your certification is correct.  You also have a responsibility to complete the classes you are certified for. If you don’t get credit for a class, you may have to pay back the VA.

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