Among the 11 million students who received financial aid last year, roughly 1.1 million are veterans. Many of these veterans received both Title IV funds as well as education benefits through the Department of Veterans Affairs (VA). Last year the VA awarded about $2 billion in education benefits under the Montgomery GI Bill to over 300,000 veteran students, according to a Government Accountability Office (GAO) report.

Prior studies have found that veteran and non-veteran students receive similar amounts of Title IV aid. But when veterans' GI benefits were included, veterans' total federal aid was greater than for non-veterans. The GAO examined data from 2005-06 (the most recently available academic year), to see if veterans are now receiving less federal financial aid than in prior years.

Eligible veteran students are those "who met their duty obligation and were honorably discharged and active-duty personnel." To receive GI benefits, service members must contribute $100 per month for the first 12 months of service. The $100 contribution is made by all servicemen and women and allows them monthly benefits upon entering college. In the 2005-06 academic year, veterans who had completed three or more years of active duty service and were attending a college or university full-time received $1,034 per month in GI education benefits, for a maximum of 36 months, according to the report. In addition to GI education benefits, VA also offers a work-study program.

On average, veterans receive 6 percent less in Pell Grants than non-veteran independent students, usually because veterans have higher incomes. Veterans are automatically considered independent for Title IV purposes, making data for veteran students most comparable with data for non-veteran independent students. VA Educational Benefits are not counted as income when determining expected family contribution (EFC).

The GAO defined four income quartiles for veteran and non-veterans (both independent and dependent). Veterans in the highest-income quartile (i.e., the 75th percentile) attending public 2-year schools earned an average of $38,550 in the year prior to starting school, compared to $33,259 for the non-veteran, independent students in highest-income quartile. Veterans in this 75th percentile in income were eligible for an average Pell Grant of $1,600, compared to $2,100 for non-veteran, independent students. Veterans and non-veteran independent students received similar amounts of subsidized and unsubsidized Stafford Loans, as well as campus-based aid.

GI benefits are not counted as income in EFC, and unlike scholarships, are not counted in estimated financial assistance (EFA) when determining eligibility for subsidized Stafford Loans.

"As a result, a veteran receiving Chapter 30 GI benefits would be eligible to receive a larger subsidized Stafford Loan than a non-veteran receiving the same amount in scholarships," according to the report.

At the option of the school, veterans who borrow subsidized Stafford Loans may also receive a further advantage when being packaged for campus-based funds. This flexibility appears in campus-based common provisions regulations under section 673.5).

Some schools surveyed for the report indicated that when possible, they used their limited flexibility to award larger financial aid award amounts to veterans than to non-veterans. . However, since only eight schools were surveyed, this information cannot be generalized beyond the GAO report.

As found in the GAO's previous studies, veteran students still receive amounts of aid that are similar to that of non-veteran students. They also receive an advantage due to the exclusion of VA benefits in the determination of eligibility for subsidized Stafford, as well as the optional flexibility found in 673.5.

Individuals and groups surveyed for the report varied in their views on how GI Benefits should be treated. The report stated:

"Some veterans' groups and school officials we interviewed believe that the law should give veterans a greater advantage by not including Chapter 30 GI Benefits as a resource for calculating all Title IV aid. In contrast, others believe that Chapter 30 GI Benefits should be considered like any other financial resource, for example a nonveteran student's scholarship.

By Michael Jones II
NASFAA Communications Intern

By Justin Draeger
NASFAA Associate Director of Communications

Posted 07/7/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.