If you are in the military or are a military veteran you may be eligible for enough tuition assistance and scholarships to pay for your entire degree – from an Associate’s Degree, to a Bachelor’s Degree, and even up to and including a Master’s Degree. The important thing is knowing where to look. Here are some common programs and scholarships for you to take advantage of.

Military scholarships and tuition assistance programs

Tuition Assistance. Active duty and civilian employers may provide tuition assistance money for eligible participants. Active Duty members can generally receive up to 100% tuition assistance up to a limit per course hour and per year. Guard and Reserve members have different tuition assistance programs. Some civilian companies also offer tuition assistance programs. In all cases be sure to check with your education office or Human Resources office for more details.

GI Bill. The GI Bill can be used by both active duty and veterans. Active duty personnel can use the GI Bill as top up for classes that cost more than the military’s tuition assistance will allow. Veterans and civilians can use the GI Bill to cover tuition costs at any accredited college. Depending on which version of the GI Bill you are eligible for, you can receive a monthly stipend of over $1,200 per month, or starting in August, you may be eligible to receive your entire tuition covered up to the highest tuition of any state university in your state of residence. Here is more information about the GI Bill.

Upromise. Upromise is a free program that allows you to automatically save money for college. To use Upromise you link credit cards and grocery store rewards cards to your Upromise account. When you buy certain items, small deposits are automatically made to your Upromise account. This makes saving for college both free and easy. Set it up once and forget about it. That is, until you need the money for college. Find more information about participating grocery stores. You can sign up for Upromise free through this link – Upromise sign up form.

Military scholarships. There are literally thousands of military scholarships available to active duty, Guard, Reserve and veterans. There are too many to list here, but you can sign up for a free military scholarship newsletter to help you find a scholarship you may be eligible for.

General scholarships. There are hundreds of thousands of scholarships available beyond the scholarships designated specifically for military members. There are many places to find them, all you need to do is look around a little bit. One caveat: Don’t ever pay for scholarship eligibility! Most of these are scams.

Online education programs and military friendly schools. Many online education programs offer favorable tuition and expenses, and some schools offer military members special deals. Here are some websites that offer information for various college education programs:

• Search GI Bill Schools
• Education for Careers

Get free money for college!

With these resources you should be able to make a career plan and degree plan, and hopefully earn some free money toward your college tuition!

Search GI Bill Schools: You can use this GI Bill School search tool to help find available programs where you can use your GI Bill.

Can you attend school on the GI Bill and still receive unemployment benefits? This is a common question many people ask when they are planning on using the GI Bill to pay for their college education. Whether you are still in the planning stages of your retirement or separation from active duty, or you are taking the opportunity to go back to school after entering the workforce and subsequent unemployment, the answer is the same – yes, you can use the GI Bill while you are receiving unemployment benefits. However, you will need to be aware of how unemployment benefits work in your state to ensure you remain eligible to continue receiving unemployment benefits.

Can I Collect Unemployment Benefits While Using the GI Bill?

Let’s take a look at a recent question we received, and how this might apply to this specific situation. Keep in mind that unemployment benefit rules vary by state, so you should contact your state employment bureau for information specific to your situation.

Q: I am a US Marine and have some questions about the unemployment benefits. My EAS date is on December 16th this year. I am planning to go back to school after the military. I will try to pursue my bachelor in 3 years. In this case, I intend not to work so I can just focus on school. Will I be able to receive the unemployment benefit if I do this? I’m talking about 3 years of unemployment benefits, while attending school. Hope you will be able to answer this. thank you.

A: Leo, thanks for your service, and best of luck pursuing your education. It is a great benefit to be able to claim unemployment benefits after military separation. I recommend that everyone file for unemployment benefits immediately after they separate from military service. But there is something that you should know about unemployment benefits – they aren’t a free ride. Unemployment exists to help people bridge the gap between jobs. In most cases, states require people receiving unemployment benefits to be actively seeking employment in order to receive benefits.

What does this mean for you? Unemployment benefits are sponsored by the U.S. Department of Labor, but individual states are responsible for setting rules and requirements. When I claimed unemployment benefits from Texas after I separated from the military I had to keep track of my job search efforts. Each week I had to call the Texas Workforce Commission to receive my unemployment check and I had to verify (via an automated phone system) that I was actively seeking employment. It’s been several years since I did this, but I believe I had to state how many job applications I sent in, how many interviews I had, etc. Keep in mind that rules and systems change and can vary from state to state.

Unemployment benefits are limited in duration

In addition, there are time limits for how long one can claim unemployment benefits. Most states offer around 26 weeks of unemployment insurance benefits, but there are federal extensions which may allow you to extend the receipt of unemployment benefits by up to 20 weeks or so. Some states with exceptionally high unemployment rates may have additional extensions. So you may be eligible to receive close to a year of unemployment benefits, depending on your specific situation. Again, this may vary by state and possibly on other circumstances, so be sure to contact your state employment agency for information specific to your situation.

You may be able to receive unemployment benefits and go to school

That doesn’t mean you can’t go to school – far from it. But you need to be able to prove to your state that you still qualify for the unemployment benefits while you are attending school. For some states that may mean you need to show that you are seeking work. There is one more consideration – some states do not allow students to receive unemployment benefits. If you are in a state which does not allow students to receive unemployment benefits, you may not be able to receive unemployment benefits while receiving GI Bill benefits.

So the best way to answer your question is to say you may be able to receive unemployment benefits while using the GI Bill, but you probably won’t be able to claim 3 years of unemployment benefits while you are going to school. However, the good news is that the Post-9/11 GI Bill benefits should pay for the majority of your tuition, and some of your housing costs as well, hopefully making it more affordable to go to school.

New GI Bill Program for Unemployed Veterans

The recently passed VOW to Hire Heroes Act of 2011 created a new program that would provide GI Bill for Unemployed Veterans, even if they had exhausted their GI Bill benefits, or if their GI Bill benefits had already expired. This program will provide up to 12 months of benefits for eligible veterans at the full-time active duty MGIB rate. This program is only open to unemployed veterans age 35-60. Eligible training includes VA Approved training and courses at a community college or tech school. The courses must lead toward an Associate’s Degree, approved certification, or non-college degree in a high demand occupation. Some examples of approved programs include trucking, information technology, some medical fields, and more.

Best of luck with your degree and thanks for your service!

There are a number of tax-advantaged college savings vehicles available to help families save for the ever-increasing costs of higher education.  Two of the most popular methods for saving for college are the 529 College Savings Plan and the Coverdell Educational Savings Account (ESA).  Is one of these methods better than the other? How do you choose between the ESA or the 529 savings plan? Let’s take a look.

Choosing Between a Coverdell ESA and 529 Plan

Age Limitations

Perhaps your choice of college savings plan will be determined by age limitations. Contributions can be made to a beneficiary of any age with 529 savings plans, while the Coverdell ESA requires that beneficiaries be under the age of 30.  When it comes time to withdraw money from a 529, beneficiaries can be any age and can use the funds over the course of a lifetime provided they are for approved education expenses.  Funds from a Coverdell ESA must be withdrawn and used by the time the beneficiary reaches the age of 30.

Annual College Savings Plan Contribution Limitations

Coverdell contribution limits max out at $2,000 per year, per beneficiary.  If multiple people are contributing to the same beneficiary’s Coverdell ESA, a maximum of $2,000 can be received, making coordination and communication essential to avoid taxes or penalties.

There are no annual contribution limitations for 529 College Savings Plans.  The amount allowed per plan over the lifetime of the plan varies depending on the state in which the 529 is opened, but ranges from $100,000 to $365,000.

Income Limitations for  College Savings Plan Contributions

Under the 529 plan, it doesn’t matter how much you earn.  Everyone can contribute to a 529 plan.  For the full $2,000 contribution to a Coverdell ESA, you need adjusted gross income (AGI) of less than $95,000 per year for a single tax filer or $190,000 per year for joint filers.  Higher income earners can contribute a smaller amount per year; but if the maximum income limits are reached, the individual may not contribute to a Coverdell ESA at all.

Tax Advantages and Benefits of College Savings Plans

Neither the Coverdell or 529 Plan allow federal income tax deductions on contributions, but the 529 plan may allow tax deductions on state income taxes, depending on your state laws. Earnings in both plans grow tax-free.  Withdrawals from a Coverdell ESA or 529 plan for qualified expenses can be taken federal tax free, as well. Here are some more tax advantages of 529 Plans.

What Are Qualified Withdrawals?

The Coverdell ESA and 529 Plans each have their own list of qualified withdrawals.  For Coverdell ESAs, you can use money for any educational expense from kindergarten to grad school.  Tuition, fees, books, computers, internet access for education, transportation to get to school, private or public school fees, etc.

Money from a 529 plan must be used for higher education expenses at accredited colleges and universities, for educational expenses like tuition, fees, books, and room and board.

How The College Savings Plans Impact Financial Aid

Money in a Coverdell ESA or a 529 plan is considered an asset of the custodian (usually the parent) and not the beneficiary.  If a parent holds the Coverdell ESA, it will be included in the parent’s assets.  Parental assets are assessed at a lower rate than student assets when calculating financial aid awards, which helps minimize the impact of money in an ESA.

Investment Options

Both the Coverdell ESA and 529 account allow for stocks, bonds, CDs and mutual fund investment options.  With the Coverdell, you can change your investment allocations as frequently as you want.  With the 529 plan, you can only change your investment allocations twice per year. Here is more information about how to open a 529 College Savings Plan, and where to open a Coverdell ESA Plan.

Which is Better – Coverdell ESA or 529 Plan??

Overall, the 529 plan is more flexible regarding who can contribute, contribution limits, ages that beneficiaries can use the funds, and it offers the state income tax deduction in some states. The advantages of a Coverdell include more flexibility for investments (ability to open an account virtually anywhere and change investments at will) and it offers slightly more liberal qualified withdrawal opportunities.

Can’t Decide?

If you’re still not sure which college savings option is the best for you, you can actually contribute to both a Coverdell ESA and a 529 plan. These plans are independent of each other.

College tuition is expensive – and it’s not getting any cheaper. Thankfully there are a few programs out there which make it easier to save for college. This is especially important if you if you are saving for your child’s tuition and will not be able to use your GI Bill benefits to help pay for your child’s college. Yesterday, we looked at the 529 College Savings Plan, which is a great way to save for college tuition. Today we are going to look at another college savings plan that offers tax benefits.

Coverdell Educational Savings Account (ESA)

Once called an Education IRA, a Coverdell Educational Savings Account (ESA) is named after Senator Paul Coverdell, who introduced this college savings plan.  Coverdell ESAs are similar to IRAs, but they are designed to save money for education rather than retirement.  Because of this, the name was changed for Education IRA to Coverdell ESA, to more accurately reflect what the money is being saved for.

How the Coverdell ESA Works

A Coverdell ESA is a savings or investment account for college tuition. You can open an account through a mutual fund company, bank, or brokerage firm, choose the investments, and then send in contributions.  The person who opens the account is considered the “responsible person” and controls the money and investments until the beneficiary reaches the age of majority for the state in which they live in.  For most states, this is the age of 18.

Contribution limits. Annual contribution limitations for Coverdell ESAs are $2,000 per student, however, contribution limits may be limited based on the modified adjusted gross income (MAGI) of the person making the contributions. Here is additional information about contributions:

• Anyone can contribute up to $2,000 in a Coverdell ESA for the benefit of someone under the age of 18, unless you exceed income limitations.  For single tax filers, if you make more than $110,000 annually you will not be able to contribute personally into a Coverdell ESA.  For joint tax filers, you must make less than $220,000 per year to contribute.
• There is also a phaseout income range which allows for lower contribution amounts. This is based on a MAGI for single filers: $95,000 and $110,000; or income between $190,000 and $220,000 for joint filers.
• If you exceed the income limitations for contributing to a Coverdell ESA, you can give the money as a gift to the student beneficiary, who can then contribute or open the ESA themselves.

Tax Benefits of Coverdell ESAs

Coverdell ESA contributions are not tax deductible, but earnings and withdrawals from a Coverdell ESA are tax free as long as distributions from the Coverdell are made for qualified educational expenses.  Qualified expenses include college costs, but can also extend to private schools at the elementary or secondary school levels, uniforms, computers, and transportation for education purposes.

If a beneficiary of a Coverdell ESA uses the money for anything other than qualified education expenses, they are subject to both a 10% penalty and the money is treated as ordinary income at tax time. Money in Coverdell ESAs must be used by the time the beneficiary is 30 years old, whether it is used for qualified educational expenses, used for non-qualified expenses and assessed a 10% penalty, or transferred to a relative.

How to Choose a Coverdell ESA

Just like any other investment, the Coverdell ESA can be opened through brokerage firms, banks, or mutual fund companies.  You’ll want to compare fee structures and commissions when making your selection, as well as the types of investments to include. Here is additional information on where to open a Coverdell ESA Plan.

One of the best ways to save for college is with a 529 College Savings Plan, which is named after section 529 of the Internal Revenue Code, 26 U.S.C. 529.  Why should you care about a 529 plan? Because they can offer some very nice tax benefits as an incentive to save for college. Let’s take a look at 529 plans and why they are a great way to save for college.

529 College Savings Plan

Where can you open a 529 plan?

Each state has it’s own version of the 529 plan and you can choose to invest in a 529 plan from your state or from another state. However, it’s often more advantageous to invest in a 529 plan within your state of residence because many states offer tax advantages and potential scholarship opportunities.  Additionally, 529 plans from your state of residence are exempt from financial aid calculations, meaning the money saved in the plan won’t prevent your eligibility for other sources of financial aid programs.

Two Types of 529 Plans – Prepaid and Savings

There are two types of 529 plans, one is a prepaid plan and the other is a savings plan.

Prepaid 529 Plan. Prepaid 529 plans allow you to buy tuition credits at today’s costs, which can be used in the future.  The advantage of this is the ability to lock in your college costs before inflation and time causes them to increase.  Prepaid 529 plans are administered by individual states for state run universities, or by individual colleges.

529 Savings Plan. The savings version of the 529 plan functions similar to a retirement account, but it is used for college tuition and eligible expenses. The savings plan can have different types of investments, such as Certificates of Deposit, mutual fund index funds, and ETFs.  These plans offer more flexibility, but are subject to market returns, so you could potentially make or lose money.  Savings 529 Plans are administered through states at times, but the actual record keeping and administrative work involved in the plans are typically handled by financial services companies or mutual fund companies.

What 529 Plans Can Be Used For

Qualified expenses for 529 plan funds include tuition, room and board, books, supplies, equipment and college related fees required to study at any vocational school, accredited college or university program in the United States.  Some foreign universities also qualify. 529 savings can be used in conjunction with the GI Bill to help pay for expenses not covered by your GI Bill benefits.

You may not use money from a 529 plan to pay back student loans or student loan interest.

Tax Advantages and Benefits of 529 Plans

Many people prefer the 529 plans for college savings vehicles because of their tax advantages.

• Tax deferred growth. Money in a 529 account grows tax-deferred and can be withdrawn tax-free if used for qualified educational expenses for the beneficiary of the 529 plan.  The donor (person who opens the 529 plan) remains in complete control of the fund.  Most 529 plans will even allow the donor to reclaim the money for themselves if things change, although the earnings portion of non-qualified withdrawals are subject to income tax and a 10% penalty.  The assets returned to the donor are also not included in the donor’s gross estate for estate tax purposes.
• Tax deductions on contributions. On a federal level, contributions to a 529 are not deductible from income tax liabilities, but most states allow state income tax deductions for all or part of 529 contributions.
• Withdrawals may not be considered taxable income. When you take distributions from your 529 plan for qualified higher education expenses, the money is exempt from federal income tax.
• Watch out for non-qualified distributions. If you take money from your 529 plan for anything other than qualified educational expenses, the distribution is subject to income taxes and an early distribution penalty of 10% on the money the plan has earned except under a few circumstances.

529 plan eligibility

Everyone is eligible for a 529 plan – there are no income or age restrictions.  The opening contribution generally has a low minimum requirement, and the ongoing contribution requirements are low, as well.

Ability to transfer 529 funds to family members. Another benefit of 529 plans not commonly found in college investment vehicles is the ability to transfer the money from one beneficiary to another family member without penalty.  Qualified family members may include son, daughter, step children, adopted children, foster children, siblings and step siblings, parents, step parents, nieces and nephews, aunts, uncles, in-laws, first cousins, or the spouse of any qualified family member.

Interested in learning more about 529 college savings plans? Check out these articles:

• How and Where to Open a 529 College Savings Plan.
• 529 College Savings Plan vs. Coverdell ESA.

FYI – a Coverdell ESA is another type of college savings plan that offers tax advantages. Here is more information about a Coverdell Educational Savings Account (ESA), and How and Where to Open a Coverdell ESA Plan.

The Yellow Ribbon Program for GI Bill was created as part of the Post 9/11 Veterans Educational Assistance Act of 2008.  The Yellow Ribbon program allows universities and colleges which grant degrees in the United States to enter an agreement with the VA.  The agreement will enable the VA and the higher education institution to split the costs 50/50 of  any tuition expenses that go above and beyond the cost of the highest public in-state undergraduate tuition – meaning people who qualify for the Yellow Ribbon program can attend any degree-granting institution for the price of the highest priced undergraduate state school tuition.

Yellow Ribbon Program for GI Bill

Who Benefits from the Yellow Ribbon Program?

If you have served at least 36 months of active duty after September 10, 2001, you are probably eligible for the Yellow Ribbon Program.  You may also be eligible if you were honorably discharged from active duty for a disability caused during service, provided you served at least 30 continuous days of service after September 10, 2001.  Eligibility can also be extended to dependents eligible for Transfer of Entitlement under the Post 9/11 GI Bill based on a veteran’s service.

You must be also be eligible for maximum benefits under the Post 9/11 GI bill in order to qualify for the Yellow Ribbon Program.

What Do Eligible Recipients of The Yellow Ribbon Program Receive?

If you are eligible for the Yellow Ribbon program under the Post 9/11 GI Bill, you’ll receive funding to cover the amount of tuition and fees that exceed the highest public state undergraduate tuition and fees.  This allows you to attend a private institution, graduate school, or attend a state school where you are not a resident.

Schools which participate in the Yellow Ribbon Program voluntarily will choose the amount of money to be contributed per eligible recipient; and the VA will match the amount and make their payment directly to the institution on behalf of each recipient.

Participating Colleges and Universities Requirements

Participating colleges and universities of the Yellow Ribbon Program must agree to provide funds to qualified Yellow Ribbon applicants on a first-come, first-served basis; within the current academic year and in all subsequent academic years while the student maintains attendance requirements and satisfactory academic performance.  The school must also state the maximum number of people per academic year may receive the contributions, and state the dollar amount that is contributed on behalf of each participant of the program during the academic year.  The funds must be made toward the program, on behalf of the recipient in the form of a scholarship or grant.

How Do I Apply for the Yellow Ribbon Program?

Each participating educational institution can establish their own application procedures for students.  They also determine how many students per year may receive funds under the Yellow Ribbon Program.

You must also apply for an educational institution that offers the Yellow Ribbon Program – a list of 2010 – 2011 schools sorted by state is available here: http://www.gibill.va.gov/GI_Bill_Info/CH33/YRP/YRP_List_2010.htm

To learn more, visit: Yellow Ribbon Program.

Being in the military is a full-time job, 24 hours a day, 7 days a week, 365 days a year. But that doesn’t mean you should let that get in the way of your dreams of achieving an education. Even deployments don’t have to stop your education because many schools offer online classes and many deployed locations now feature educational centers where you can take proctored exams or even take placement exams to test out of college courses.

Let me share with you how I was able to complete my Bachelor’s Degree while on active duty by taking full-time classes, both in residence and while deployed to the Middle East. And no, I didn’t have a cushy office job. I worked as a C-130 mechanic on the flight line, often working 9-12 hour days at home station, and 13-14 hour days while deployed.

Tips For Taking Classes While in the Military

Be flexible with your educational options

Each school is different and may or may not understand how the military operates. Ideally you will want to find a school that offers night classes, online learning, or non-traditional course schedules so you can attend on a regular basis. It also helps to attend classes at a military friendly university. You may have to compromise with your choice of schools or your degree plan if you want to attend classes while on active duty, but depending on your career goals, it may be worth the compromise.

Search for military friendly schools! Active duty military members have special needs when it comes to education. Check out these GI Bill Schools for military friendly educational programs.

Here are some military friendly schools that offer online courses:

Set educational goals

The most important step is to have a goal. I completed a year of college before I enlisted and I completed roughly half of my basics – the classes which are required for most Bachelor’s Degrees. But I didn’t have everything completed. I went to our education center and met with the guidance counselor from one of the schools on our base.

Based on the review of my transcripts and the credits which would transfer over (Basic Military Training, a few credits from tech school, and Airman Leadership School), we determined how many credits I would need to achieve my Bachelor’s Degree, then we determined which CLEP and DANTES tests I could take to test out of certain classes.

My goal was two fold:

1. Test out of as many classes as possible to reduce the amount of time needed to complete my degree.
2. Complete my Bachelor’s Degree as quickly as possible

The first goal would directly help the second goal, so I hit it with a vengeance and completed as many tests as I could, leaving me with 10 classes through the university, which also happened to be the minimum number required to take through the school to receive a BS from them (most schools have a minimum number of classes you must take through them in order to receive a degree).

Get organized

Once I had my testing out of the way, I looked at the upcoming class schedule and determined which classes were offered at which times and I tried to forecast my deployment schedule so I could take other classes online.

It took a bit of juggling because some classes are only offered in residence or at certain times, but with a little help from the counselor, we were able to determine the best order to take each class. Being organized takes work, but it can be extremely important if you want to take classes while on active duty.

Be flexible with your work schedule

I was a C-130 maintainer, which required around the clock maintenance. The school offered evening classes, so I had the choice of working 0800-1600 or midnight to 0800. I chose to work the midnight shift because it gave me the opportunity to attend classes. It’s also much easier to get the mid shift than the day shift. I was able to remain on the mid shift for 2 years (which was a year longer than it took to complete my degree).

Not everyone has the opportunity to work a range of shifts, so try to be flexible and work with your supervisor. Many units and supervisors will support your educational aspirations if you are willing to work with them. See if you can come in an hour or two early, stay late, or volunteer to work an occasional weekend shift if necessary.

Make education a priority

It should go without saying, but if you want to balance your military career, your family, and an education, you need to set priorities. Obviously, your family and career come first, but you will have a hard time if you don’t list education directly after those. I don’t recommend completely dropping your social life and extracurricular activities, but you need to maintain a balance. That may mean skipping some nights at the club or hanging out with the guys a little less frequently. But it also means completing your degree.

Utilize downtime

I took online classes while I was deployed to the Middle East. We typically worked 13-14 hour days, with about one day off each week. You could usually find my nose buried in a book or writing a paper whenever we had downtime. The same for whenever I had a day off. I would usually grab a couple extra hours sleep, head to the gym, then go to the morale tent with my study materials. Just a couple hours of dedicated study time makes a huge difference. Then the rest of the day is yours.

Enlist support from friends and family

Eduction and life in general are easier to handle when your family and friends support your goals. Be sure to let them know how important your dream of an education is and do your best to support them in return.

Remember, each situation, degree plan, unit work load, and other factors are different, so you may need to exercise more flexibility and patience if you want to attend classes while on active duty. I feel very fortunate to have been able to complete my Bachelor’s Degree while on active duty because it gave me options when it came time to make the decision to reenlist or separate from the military. Ultimately, I chose to separate from the military because I was ready for a new challenge in life. But I am forever grateful for the opportunity I had to achieve my degree and make that decision.

Do you have any tips for taking classes while on active duty?

Search GI Bill Schools for military-friendly educational programs.

I signed up for the Montgomery GI Bill (MGIB) when I enlisted in the military. Like many military members and veterans, I haven’t had the chance to use all of my MGIB benefits yet. Part of the reason is because the military has a generous Tuition Assistance (TA) program. I completed a year of college before I enlisted and I used Tuition Assistance to complete my bachelor’s degree while I was on active duty. The only time I touched my GI Bill was to get a top up when I started a Master’s Program (TA only covers up to a certain dollar limit per semester hour and the Master’s classes exceeded that limit). So it was GI Bill to the rescue!

What happens if you don’t use your GI Bill Benefits?

Unfortunately, the Montgomery GI Bill is pretty much a use it or lose it benefit. In most cases you will lose your Montgomery GI Bill Benefits if you don’t use them within 10 years of separating from the military. The Post-9/11 GI Bill expires 15 years after you separate – just one of many reasons why you should make the switch if you are eligible!

If you aren’t eligible for the Post-9/11 GI Bill and your 10 year time limit has already passed, then you may be out of luck. I’m coming up on 4 years since I separated from the USAF, so I have to start making plans if I want to use my GI Bill benefits.

Can You Get a Refund on Your Montgomery GI Bill?

We receive several common questions about GI Bill benefits – primarily about losing GI Bill benefits, transferring GI Bill benefits, and getting a refund for GI Bill benefits if the benefits are not used. In most cases, the answer is no, you cannot get a refund for your GI Bill.

The Montgomery GI Bill usually works like this: You have one chance to buy in to the MGIB when you join the military service. If you opt in, you pay $1,200. Then you can use your MGIB benefits while on active duty or with 10 years from the time you separate from the military (there are some exceptions to the time limits, particularly if you rejoin the service or are recalled to active duty; this will restart your clock). You typically lose any portion of your MGIB that you do not use within the 10 year time limit, and there are usually no refunds.

MGIB Refunds Available for Post 9/11 GI Bill users

There is an exception to the no refund policy for the Montgomery GI Bill. You can get a refund of your $1,200 buy-in if you are eligible for the Post 9/11 GI Bill, you elect to use those benefits instead of the Montgomery GI Bill you bought into, and you use the entire Post 9/11 GI Bill benefits.

From the GI Bill FAQ Page:

Q: Do I get a refund of the $1,200.00 buy-in for the Montgomery GI Bill?

A: Any individual who paid the $1,200.00 buy-in for the Montgomery GI Bill and elects to use the Post-9/11 GI Bill may be refunded a proportional amount if, and after all entitlement under the Post-9/11 GI Bill is used. Individuals who do not use all their entitlement under the Post-9/11 GI Bill will not receive a refund of contributions paid under the Montgomery GI Bill.

How does the Montgomery GI Bill Refund work?

Based on my understanding, you have to be eligible for the Post-9/11 GI Bill, elect to give up your MGIB benefits and switch to the Post-9/11 GI Bill, use all your Post-9/11 GI Bill benefits, and request a refund.

Of course, there is some fine print: You will receive the MGIB refund with your final BAH payment, which means you must be attending an in-residence program (veterans attending college via online eduction are not currently eligible to receive BAH benefits through the Post-9/11 GI Bill program). If you are primarily taking online courses, then I recommend taking at least one class at a local university, even if it doesn’t specifically apply to your program – you can still declare another major. The only purpose of taking that class is to get he $1,200 refund.

The MGIB refund is also prorated based on the amount of Montgomery GI Bill eligibility you have remaining. For example, if you didn’t use any of your Montgomery GI Bill benefits, you should receive the entire $1,200 refund. If you used 1/3 of your MGIB benefits, you may only receive $800 back, etc. However, I am not 100% certain on the formula used, and the VA rep I spoke with on the phone mentioned he would have to run the query on a case by case basis. Please contact the Department of Veterans Affairs for more information specific to your situation.

This is a great benefit for veterans who are eligible for the Post-9/11 GI Bill. Just keep in mind the requirements: you must use 100% of your Post-9/11 GI Bill to be eligible, you must be receiving BAH during your final month of GI Bill eligibility, and you will receive a prorated refund if you used any portion of your MGIB benefits.

Though heralded as one of the most significant pieces of legislation in history, the GI Bill almost didn’t come to pass. Known as The Servicemen’s Readjustment Act of 1944 (more commonly the GI Bill of Rights) it was almost stopped at the Congressional level as members of the House and Senate debated the finer details of the law.

Designed to assist veterans assimilating into civilian life, many people had concerns about exactly how that was to take place. This included concerns about sending battle-hardened veterans into colleges and universities, a privilege once reserved for only the rich.

The main goal was to prevent further misfortune such as when World War I veterans were discharged with a mere $60 allowance for their services and a train ticket home.

Education was clearly seen as the key to success for our veterans. During the Great Depression, some veterans had a difficult time making a living for themselves and their families. Congress was trying to intervene and change this situation.

Millions took advantage of the GI Bill’s home loan guaranty (different than today’s VA Loan program). The veteran’s administration backed almost $2.4 million in home loans for World War II veteran’s and their families.

Montgomery GI Bill

The Mongtomery GI Bill is the”revamped” version of the original GI Bill of Rights, and the program that most veterans are familiar with. To be eligible for the Montgomery GI Bill , military members were required to “buy in” at a cost of $1,200 during their first few days of military service. Once they paid the initial buy-in fee, they were eligible to receive a monthly stipend while attending a qualified educational or trade program. The GI Bill is available to Active Duty, Guard, and Reserve.

Selected Reserve programs are available members of the Selected Reserve including the Army Reserve, Navy Reserve, Air Force Reserve, Marine Corps Reserve and the Coast Guard Reserve. The Army National Guard and the Air National Guard are also included.

An educational assistance program is available for those seeking a degree, certificate, or correspondence course. These also include cooperative training, independent study programs, apprenticeships and on the job training. If you’re eligible for this program, you may be entitled to benefits of up to 36 months of education. In most cases, the GI Bill is a use or lose proposition – any benefits not used within 10 years of discharge will be forfeited without receiving a refund on the $1,200 buy-in fee. Here is more detailed information about GI Bill eligibility.

Veterans Educational Assistance Program (VEAP)

The Veterans Educational Assistance Program (VEAP) was a program brought about to replace the GI Bill. It was a cost saving measure that was widely unpopular and was eventually replaced by the revamped Montgomery GI bill. There are still military members in service and veterans who are eligible for VEAP. If you first entered the service between January 1, 1977, and June 30, 1985, and opened a contribution before April 1, 1987, contributing at least $25 to $2,700, then were discharged or released from active military service, you qualify for VEAP.

If you elected to make contributions from your military pay to participate in VEAP, your contributions were matched on a $2 to $1 basis by the government. These benefits are yours to use for your degree, certificate, correspondence school, apprenticeship or on the job training program, as well as vocational flight training programs.

You have 10 years from your release date to use your VEAP benefits. If you don’t use funds you pain in and were entitled to, your portion remaining in the fund will be automatically refunded. Additional information about the VEAP program.

Post 9-11 GI Bill

This bill provides financial support for education and housing to those individuals who have served at least 90 days of aggregate service. Service must have begun on or after September 11, 2001, or servicemen must have been discharged with a service connected disability within 30 days. You must have received an honorable discharge to qualify for this bill.

Approved training includes graduate, undergraduate degrees, vocational and technical training. All programs must be offered by an institution of higher learning that has been approved for GI Bill benefits.

The GI Bill offers servicemen an opportunity to further his or her education and obtain home ownership through the various programs available. Be sure to take advantage of these GI Bill programs as soon as possible after discharge.

Search GI Bill Schools: You can use this GI Bill School search tool to help find available programs where you can use your GI Bill.

Saving money for your child’s education is an important thing to do, especially with tuition costs rising each year. Two of the most popular educational savings plans are the 529 College Savings Plan and the Coverdell Educational Savings Account (ESA).

Both college savings plans offer tax advantages and may be good options depending on your needs. This article compares Coverdell ESA and 529 Plans.

The 529 College Savings Plan offers a more flexible plan for many people, so I thought I would share some of the tax advantages of saving for your child’s college education with a 529 College Savings Plan.

Tax Advantages of the 529 Plan

There are several major advantages to using a 529 College Savings Plan as a college savings vehicle.

• Tax exempt earnings. 529 earnings grow free from federal income tax as long as your withdrawals are used to pay for college expenses.
• Tax exempt withdrawals. Withdrawals from a 529 Savings plan are exempt from income taxes when used for qualified higher education expenses.
• Tax deductions and/or credits. Some states offer a state tax deduction or credit for contributions made to9 a 529 Savings Plan. Here is a list of states that offer this benefit.

Tax Disadvantages of a 529 Savings Plan

If you decide to make withdrawals from your 529 Savings Plan for something other than higher education expenses, you may be hit with penalties and taxes. In fact, the penalties are similar to the early withdrawal penalties for retirement fund. Any accumulated earnings are taxed, and you must pay an additional 10% penalty on your earnings.

Check with your 529 plan for more details

This article only includes a brief overview of the advantages and disadvantages of 529 plans. For more information, I recommend checking with the IRS or your individual plan.

Recommended articles about 529 plans:

• Coverdell Educational Savings Accounts (ESAs).
• 529 College Savings Plans vs. Coverdell ESAs
• Our Son Just Turned One, Starting College Tomorrow.
• How to open a 529 college savings plan for your children.
• 529 Plan and College Savings: Should We Contribute?
• College Savings and Investing With 529 Plan and ESA.

Each state can offer their own 529 college savings plan and there may be differences among plans offered.