How to Use Your GI Bill to Earn a 100 Percent Free Online Degree

The new GI Bill—which goes into effect later this year—will allow many eligible veterans to earn a bachelor’s degree via distance learning at little or no cost.

However, not all veterans will come out ahead with this bill, depending upon where they live and where they choose to go to school. Some may be better off using the old GI Bill (also known as the Montgomery bill).

Here are 5 keys to making sure you use your military benefits wisely—so that you can achieve your distance education without owing a penny.

1. Are You Eligible for the New GI Bill?

2. Before Making Military Education Decisions, Check With the VA

3. The New GI Bill Takes Away Some Benefits

4. Choose Your Online College Carefully—Not Always a Full Ride

5. You Can Use Both GI Bills

Are You Eligible for the New GI Bill?

You are covered by the post-9/11 GI Bill if:

• You are a veteran who served at least 90 days of active-duty service after Sept. 10, 2001 and received an honorable discharge. (Note: For full benefits, you need to have three years of service after Sept 10, 2001. Those who served less time will receive a smaller percentage of benefits, depending on time served.

• You are a vet who served at least 30 days of post/9/11 active-duty service—and were discharged due to a service-related disability. (You will qualify for full benefits.)Also keep in mind that the old GI Bill provided 36 months of educational benefits. Some vets who are also eligible for the new GI Bill— but who used up their old benefits—can qualify for an additional 12 months of benefits under the new bill.

 2. Before Making Military Education Decisions, Check With the VA

Details for the new, post-9/11 GI Bill—which goes into effect on Aug. 1—continue to change, and may change right up until the last minute.

“Don’t rely on what a college advisor will tell you [about the new GI Bill],” advises Ramona McAfee, assistant dean of military and federal programs at Columbia College in Missouri (where military students make up about one-fourth of the 25,000-student population, many of whom are online).

“This particular GI Bill is very, very complex. There are lots of ifs, ands or buts in it, lots of restrictions, lots of twists,” says McAfee. Plus, she cautions, “details are still being worked out.”

In fact, as we were writing this story, the bill, signed into law in June 2008, was altered in early April (for example, student health insurance will be covered). A bill is pending in Congress which, if passed, would change the GI Bill to provide a housing allowance to vets who attend online schools fulltime.

For all questions about the new GI Bill, it’s best to double-check with the Veterans Administration before making any commitments—and then double-check again later, to make sure the VA hasn’t changed its rules. The best way to do this is to:

• • Call the VA tollfree at 1-888-GIBILL-1 (888-442-4551)

  • Visit the VA’s GI Bill website at: www.va.gibill.gov

3. The New GI Bill Takes Away Some Benefits

The new GI Bill takes some benefits away that are covered under the current (“Chapter 30” or “Montgomery”) GI Bill.

Training and apprenticeships will NOT be covered.

The new GI Bill will cover only colleges (both two-year and four-year) and universities, whether they are fully online or traditional, campus-based schools. It will NOT cover:

• • Training that won’t result in a college degree—such as HVAC certification, truck driving, EMT certification, barber or beautician school, or flight training;

  • Apprenticeships or on-the-job training programs, such as plumbing, hotel management, or firefighting;

  • Certificate programs that aren’t provided by a college or university.

If your online learning plan includes the above types of programs, you may be better off using the current, Montgomery GI Bill, and not enrolling in the new GI Bill.

(Note that the VA does have a method for SOME veterans who were previously qualified under the Montgomery bill to take training and apprenticeship courses under the new GI Bill – check with the VA to see whether this affects you.)

Students going to school 100 percent online will NOT receive a housing allowance.

Unless Congress acts to change the GI Bill (a bill is pending), vets who attend distance school fulltime will be cut off from a significant source of monthly income.

The new GI Bill pays colleges directly—with no money sent to students for tuition and fees. It does give a monthly housing allowance to full-time students, however: a check sent directly to the student to cover housing costs. The amount varies depending on the student’s zip code, and can range from about $800 per month to more than $2,500 per month.

However, the new GI Bill does NOT give this housing allowance to distance education students. In some cases, this means the student will be better off staying with the old GI Bill.

There is a loophole in the new GI Bill: If you attend just one “on ground” course, you qualify for the housing allowance.Louis Martini, director of military education at Thomas Edison State College in New Jersey, says online students can find a college near where they live and sign up for a class with at least one credit, such as a gym class. As long as they take at least one residential class along with their online studies, they are eligible for the housing allowance.Having veterans do this in order to get their housing benefit “looks really kind of silly,” admits Martini. It also remains to be seen if the VA will close this loophole once the program goes into effect in August.4. Choose Your Online College Carefully—Not Always a Full Ride

When Congress passed the new GI Bill, its intent was to pay the full cost of a four-year, public school degree—a big step up from the past GI Bill, which primarily has been used by vets to cover community college (two-year degrees).

To achieve this, the new GI Bill promises to pay for the most expensive public university undergraduate degree (including tuition and fees) in each state. Vets will not be required to go to public schools, but they will be able to apply the most expensive public degree cost toward any college they choose to attend.

The VA has issued a preliminary chart listing the most expensive tuition and fees per state—which reveals a vast disparity.

One state charges zero tuition (California). Others charge less than $100 per credit (for example, Massachusetts charges $71.50), while some charge as much as $1,333 per credit (Texas).

Fee amounts also vary dramatically: from $127 per term (usually, this means per semester) in Arizona to $43,035 per term in Colorado.

These ranges are due to the differing subsidies states provide to schools and also to specialty programs available in some states (such as aviation) that have higher fees.

So, what does this mean for you?

Depending where you want to go to school, these differences could mean that you can afford a private-school education … or that even a public education will leave you owing money (in these cases, the old GI Bill will be a better bet).

Some examples:

* PRIVATE SCHOOL, ONLINE UNDERGRADUATE DEGREE

You are interested in an online bachelor’s degree in business administration. You are thinking about South University, a for-profit, private distance school with its online campus based in Georgia, which charges $60,300 for this four-year degree.

The VA will reimburse Georgia schools a maximum of $203 per credit hour—or $36,540 for this degree, leaving you owing $23,760.

You could still have all or part of this additional balance covered if South chooses to participate in the VA’s new Yellow Ribbon Program. With this program, schools agree to pay a portion of the difference between what they charge and what the GI Bill covers. The government will match what the school chooses to pay.

If South were to agree to pay an additional $11,880 toward your bill, the VA would also pick up that amount, and you would owe nothing.

Schools have until June 15 to determine if they want to enter the Yellow Ribbon Program, and how much money they are willing to provide.

Always check with your preferred school to determine if it is part of the Yellow Ribbon Program. This one factor can make a big difference in your out-of-pocket costs.

For instance, the University of Phoenix Online has agreed to be part of the Yellow Ribbon program. If you are seeking a bachelor’s in business from Phoenix, you can expect to pay $64,800. The VA will pay $59,632 of this (reimbursement rates for Arizona are $490 per credit, more than double what is given to Georgia schools), leaving you owing about $5,000.

However, the University of Phoenix will put up $2,500 under the Yellow Ribbon Program. The government will match this with another $2,500—meaning you will owe nothing in tuition.

Keep in mind that you will have living costs while attending an online school that are not covered under the new GI Bill. If you need a living stipend, you might be better off using the old GI Bill, which pays a maximum benefit of $1,321 for 36 months, or $47,556, sent directly to you to use for tuition, rent, and other expenses.

This amount of money will not fully cover tuition charged by more expensive schools, such as the University of Phoenix and other for-profit, private schools.

For the most affordable education, consider a nonprofit, public university. GetEducated.com’s surveys of online college affordability have revealed that public, non-profit universities almost always provide the least expensive degrees for online students.

GetEducated.com’s surveys have revealed that online degrees offered by public colleges cost, on average, up to half as much as the very same degrees offered by for-profit universities.* EXAMPLE:  PUBLIC SCHOOL, ONLINE BACHELOR’S DEGREEIf you live in North Carolina, you can get your online bachelor’s in business administration from East Carolina University for a total of $11,880 over four years. (Note: If you don’t live in North Carolina, the price quadruples, to $54,480. Always check in-state versus out-of-state tuition rates when evaluating schools, as there often is a hefty difference.)The VA tuition benefit for North Carolina schools is $57,900, easily covering both out-of-staters and residents.

* EXAMPLE:  PUBLIC SCHOOL, ONLINE MASTER’S DEGREE

Graduate study is covered by the new GI Bill, but the VA uses undergraduate tuition to set rates. If your online graduate program charges more than an undergraduate program, you will wind up owing money—even if you attend a nonprofit, public school.

The University of South Carolina charges out-of-state residents $1,085 per credit for an online master's in civil engineering. In-state residents are charged $589 per credit. (Total degree cost: $32,550 for out-of-staters, $17,670 for residents).

The GI BIll's reimbursement rate in South Carolina is $460 per credit hour, or $13,800 for a 30-hour degree. This means out-of-state residents will owe $18,750, and in-staters will owe $3,870.

This is another situation where the old GI Bill will serve you better, since its maximum benefit of $47,556 will cover this distance graduate degree whether you are an out-of-state or in-state resident.

5. You Can Use BOTH GI Bills

Most service members will have to choose one GI Bill or the other. However, you may be able to use both the new GI Bill and the current, Montgomery GI Bill—depending on your veteran status and how much you have earned in veterans’ benefits.

For example, you could use the new GI Bill for a college degree. Then, assuming you have benefits left on your Montgomery GI Bill, you can apply these to pay for an apprenticeship or training program.

If you think this applies to you, talk to a VA benefits counselor by calling the VA  at 888-442-4551.

Bottom Line

Take care in selecting your online college:

• • Calculate how much each online college costs before you enroll; make sure you have a clear statement of all tuition and fees before signing with any college

  • Compare the tuition and fees your school charges with VA reimbursement rates before signing—you may pay significantly more for a school in one state versus another

  • Consider whether your preferred university charges differently for residents and non-residents (you may be better off picking a school within the state where you live)

  • Check to see that your chosen online school is part of the Yellow Ribbon Program. If so, calculate the difference this will make in your out-of-pocket college costs

One easy way to find out how much online schools cost is to search GetEducated.com’s database. You can search this online college directory by state or subject or by specific school name. Every college profile in the GetEducated.com directory reveals the total cost— tuition and fees—charged for each distance learning degree.

You can also consult any of GetEducated.com’s Best Buy rankings lists to find the least expensive online degrees nationwide.

The VA began accepting enrollment applications for the new GI Bill on May 1. Before you make this commitment, consider all your options—including financial ones—carefully, and check with the VA.

The military may continue to make changes in its tuition and reimbursement programs. If you monitor your GI benefits wisely, you can earn a 100 percent free college degree.