FinAid - Financial Aid Advice The SmartStudent Guide to Financial Aid
Site MapAbout FinAid
 
Loans
Scholarships
Saving for College
Military Aid
Other Types of Aid
Financial Aid Applications
Answering Your Questions
Calculators
Beyond Financial Aid




Advertisement


 
Veterans Education Benefits

Most veterans education benefits are treated as resources, not income, for Federal student aid purposes. This means veterans should not report their veterans education benefits as income on the FAFSA. The FAFSA includes separate questions that ask about the monthly benefit and the number of months of benefits expected during the school year (July 1 to June 30). However, there are a few exceptions.   Military.com

Free Military Education
and Career Resources

Section 480(c)(2) of the Higher Education Act of 1965 (HEA) defines veterans education benefits to include, but not necessarily be limited to, the following veterans benefits:

  • Reserve Officer Training Corps scholarship. (US Code, Title 10, Chapter 2)
  • Selective Reserve. (US Code, Title 10, Chapter 106)
  • Selective Reserve Educational Assistance Program. (US Code, Title 10, Chapter 107)
  • Reserve Officer Training Corps Program. (US Code, Title 37, Chapter 2)
  • Montgomery GI Bill - active duty. (US Code, Title 38, Chapter 30)
  • Vocational Rehabilitation. (US Code, Title 38, Chapter 31)
  • Post-Vietnam Era Veterans. Educational Assistance Program. (US Code, Title 38, Chapter 32)
  • Dependents Educational Assistance Program. (US Code, Title 38, Chapter 35)
  • Restored Entitlement Program for Survivors (or Quayle benefits). (Public Law 97-376, Section 156)
  • Educational Assistance Pilot Program. (Public Law 96-342, Section 903)

Advertisement
The HEA specifies in Section 480(b)(4) that these benefits are not reported on Worksheet B of the FAFSA. These benefits are generally considered to be resources. All other veterans benefits, such as income earned from the Veterans Affairs Student Work-Study Allowance Program (VASWSAP) and veterans noneducation benefits (e.g., Disability, Death Pension, or Dependency & Indemnity Compensation (DIS)) should be reported in Worksheet B of the FAFSA as untaxed income.

Note that although veterans education benefits are not reported on Worksheet B, there is a special question on the FAFSA that asks about veterans education benefits. This question asks for the number of months of benefits and the amount per month. (A common error is to report the annual amount of benefits, as opposed to the monthly amount. If the monthly amount varies, calculate the monthly figure by dividing the annual figure by the number of months of benefits.) The answer to this question does not affect the EFC.

It is important to understand whether a benefit is treated as a resource or as income. Resources reduce need-based financial aid dollar for dollar. So if you include a resource as income on the FAFSA, you will be penalized twice: once by having it increase your Expected Family Contribution (EFC) and once by having the resource reduce your Federal student aid eligibility.

Much of the discussion of veterans education benefits occurs in the sections that deal with overawards. Overawards occur when the total of a student's financial aid and resources exceeds his or her demonstrated financial need. When an overaward occurs, the school is required to reduce the financial aid package to compensate. This is basically a fancy way of saying that every dollar that is classified as a resource reduces the student's need-based financial aid by a dollar.

 

 
Home | Loans | Scholarships | Savings | Military Aid | Other Types of Aid | Financial Aid Applications
Answering Your Questions | Calculators | Beyond Financial Aid | Site Map | About FinAid®
Copyright © 2016 by FinAid Page, LLC. All rights reserved.
Mark Kantrowitz, Founder
www.FinAid.org