Savvy Consumer: Federal Benefits for Veterans and Dependents

Federal Benefits for Veterans and Dependents
2004 Edition

Benefit Programs (continued)

Education and Training

Education laws are complex. The following is only a summary. Additional information for school officials, veterans and dependents can be found at http://www.gibill.va.gov, VA's Education Services Web page, or by calling 1-888-GI-BILL-1 (1-888-442-4551).

Montgomery GI Bill (Active Duty)

Eligibility

The Montgomery GI Bill (MGIB) -Active Duty provides a program of education benefits that may be used while on active duty or after separation from active duty. Veterans must receive a fully honorable military discharge for the period of service on which MGIB eligibility is based. Discharges "under honorable conditions" and "general" discharges do not establish eligibility. Veterans who do not receive a qualifying discharge from one period of service may qualify based on a discharge from another qualifying period of service.

All participants must have a high school diploma or equivalency certificate before applying for benefits. Completing 12 hours toward a college degree before applying for benefits also meets this requirement. Under previous law, veterans were required to meet the high school requirement before they completed initial active duty for training. Those who didn't may now meet the requirement and apply or reapply for benefits. If eligible, they must use their benefits within the following period: (1) 10 years from the date of last discharge from active duty, or (2) by Nov. 2, 2010, whichever is later.

Additionally, every veteran must establish eligibility under one of the following four categories.

Category 1 - Service After June 30, 1985

To be eligible under Category 1, veterans must: have entered active duty for the first time after June 30, 1985; and not have declined MGIB in writing upon entry onto active duty. The military reduces their pay by $100 a month for the first 12 months of active duty. These pay reductions are not refundable. Eligible servicemembers can use the MGIB benefit while on active duty after completing two continuous years of service. Veterans can use the MGIB benefit if they: completed three continuous years of active duty, or two continuous years of active duty if they first signed up for less than three years or have an obligation to serve four years in the Selected Reserve (the 2x4 program) and enter the Selected Reserve within one year of release from active duty.

Servicemembers or veterans are barred from eligibility under Category 1, however, if they received a commission as a result of graduation from a service academy or completion of an ROTC scholarship. However, such a commission isn't a bar if the applicant: (1) received a commission after becoming eligible for MGIB benefits (including completing the minimum service requirements for the initial period of active duty); or (2) received a commission after Sept. 30, 1996, and received less than $3,400 during any one year under ROTC scholarship.

Under Category 1, applicants are also barred from benefits if they declined MGIB because they received repayment from the military for education loans. If they did not decline MGIB and received loan repayments, the months served to repay the loans will be deducted from MGIB entitlement. Individuals who received loan repayments for one period of active duty can still be eligible based on another qualifying period of active duty as long as they did not decline MGIB upon entering active duty.

Early Separation

Veterans who did not complete the required period of service may still be eligible under Category 1 if discharged for one of the following reasons: (1) convenience of the government-with more than 30 continuous months of service for an obligation of three or more years, or 20 continuous months of service for an obligation of less than three years; (2) service-connected disability; (3) hardship; (4) a medical condition diagnosed prior to joining the service; (5) a condition that interfered with performance of duty; (6) a reduction in force (in most cases). Servicemembers planning to separate early should ensure their separation reasons are coded properly to avoid disqualification for MGIB benefits.

Category 2 - Vietnam Era GI Bill Conversion

To be eligible under Category 2, veterans must have had remaining entitlement under the Vietnam Era GI Bill on Dec. 31, 1989. Additionally, they must have served on active duty for any number of days during the period Oct. 19, 1984, to June 30, 1985; or served on active duty for at least three continuous years beginning on July 1, 1985; or served at least two continuous years active duty beginning on July 1, 1985, followed by a minimum of four years in the Selected Reserve beginning with one year of release from active duty.

Veterans not on active duty on Oct. 19, 1984, may be eligible under Category 2 if they served three continuous years on active duty at any time beginning on or after July 1, 1985, or two continuous years of active duty at any time followed by four continuous years in the Selected Reserve beginning within one year of release from active duty.

Veterans are barred from eligibility under Category 2 if they received a commission after Dec. 31, 1976, as a result of graduation from a service academy or completion of an ROTC scholarship. However, such a commission does not bar eligibility if the veteran received the commission after becoming eligible for MGIB benefits, or received the commission after Sept. 30, 1996, and received less that $3,400 during any one year under ROTC scholarship.

Category 3 - Involuntary Separation/Special Separation

Veterans may be eligible under Category 3 if they meet one of the following requirements: (1) elected MGIB before being involuntarily separated; or (2) were voluntarily separated under the Voluntary Separation Incentive or the Special Separation Benefit program, elected MGIB benefits before being separated, and had military pay reduced by $1,200 before discharge.

Category 4 - Veterans Educational Assistance Program

Eligibility under Category 4 may be extended to veterans who participated in the Veterans Educational Assistance Program (VEAP) if they: (1) served on active duty on Oct. 9, 1996; (2) participated in VEAP and contributed money to a VEAP account; (3) elected MGIB by Oct. 9, 1997, and paid $1,200. Veterans who participated in VEAP on or before Oct. 9, 1996, may also be eligible even if they did not deposit money in a VEAP account if they served on active duty from Oct. 9, 1996, through April 1, 2000, elected MGIB by Oct. 31, 2001, and contributed $2,700 to MGIB.

Certain National Guard servicemembers may also qualify under Category 4 if they (1) served for the first time on full-time active duty in the National Guard under title 32, U.S.C., between June 30, 1985, and
Nov. 29, 1989, and had no previous active duty;(2) elected to have National Guard service count toward establishing eligibility for MGIB during the nine-month window ending on July 9, 1997; and (3) paid $1,200.

Period of Eligibility

Eligibility generally expires 10 years after discharge or release from active duty. However, there are exceptions for disability, re-entering active duty, and for upgraded discharges.

Payments

For training in college, technical or vocational school, eligible veterans qualify to receive the following monthly rates for full-time training, effective Oct. 1, 2003: $985 a month if they qualify for MGIB benefits based on active duty for three continuous years or more or active duty for two continuous years plus four years in the Selected Reserve, or $800 a month if they qualify for MGIB benefits based on active duty of less than three years. Benefits are reduced for part-time training. Payments for other types of training follow different rules. For complete rates, visit (http://www.gibill.va.gov ).

VA will pay an additional amount, commonly called a "kicker" or the "college fund" if directed by the Department of Defense. Eligibility is based on occupational specialties and is generally established upon the servicemember's recruitment into active duty. Servicemembers potentially eligible under Category 1 (or originally eligible under Category 1 but subsequently eligible under Category 3 because of the reason for discharge) can make additional contributions up to $600 before leaving active duty to receive a higher rate of benefits.

The maximum number of months veterans can receive MGIB benefits is 36 months at the full-time rate or the part time equivalent. The following groups qualify for the maximum: (1) eligible veterans who served the required length of active duty, (2) eligible veterans with an obligation of three years or more who were separated early for the convenience of the government and served 30 continuous months, (3) eligible veterans with an obligation of less than three years who were separated early for the convenience of the government and served 20 continuous months.

Training Available

The following types of training are available under the Montgomery GI Bill: (1) courses at colleges and universities leading to associate, bachelor or graduate degrees, including accredited independent study, which may be offered through distance education; (2) courses leading to a certificate or diploma from business, technical or vocational schools; (3) apprenticeship or on-the-job training programs for individuals not on active duty, including self employment training begun on or after June 16, 2004, necessary for ownership or operation of a franchise; (4) correspondence courses, under certain conditions; (5) flight training, if the veteran holds a private pilot's license upon beginning the training program and meets the medical requirements; (6) state-approved teacher certification programs; (7) preparatory courses necessary for admission to a college or graduate school; and (8) licensing and certification tests approved for veterans.

Additional MGIB Benefits

Accelerated payment of MGIB benefits is available to those enrolled in certain high-cost programs leading to employment in the technology industry.
Transfer of entitlement to dependents is currently provided by the U.S. Air Force in limited circumstances.
Tutorial assistance allowance is available for individual tutoring if training in school at one-half time or more. The maximum benefit is $1,200 ($100 per month).
Tuition Assistance Top-Up provides for payment to an individual for the difference between the tuition assistance amount paid by the military component and the total cost of tuition and approved charges.

Work-Study

Veterans may be eligible for a work-study program in which they work for VA and receive hourly wages. Veterans must train at the three-quarter or full-time rate. The types of work allowed include: (1) outreach services for VA and State Approving Agencies; (2) VA paperwork; (3) work at national or state veterans' cemeteries; (4) work at VA medical centers or state veterans homes; and (5) other VA approved activities.

Counseling

VA counseling is available to help MGIB participants assess their educational and vocational strengths and weaknesses. Counseling is also available to help plan education or employment goals. Additionally, individuals not eligible for the MGIB may still receive VA counseling beginning 180 days prior to separation from active duty through the first full year following honorable discharge.

Montgomery GI Bill (Selected Reserve)

Eligibility

The Montgomery GI Bill - Selected Reserve (Chapter 1606) provides education benefits to members of the reserve elements of the Army, Navy, Air Force, Marine Corps and Coast Guard, and to members of the Army National Guard and the Air National Guard. To be eligible for the program, a reservist must: (1) incur a six-year obligation to serve in the Selected Reserve signed after June 30, 1985, or, if an officer, agree to serve six years in addition to the original obligation; (2) complete Initial Active Duty for Training; (3) have a high school diploma or equivalency certificate before applying for benefits; and (4) remain in good standing in a Selected Reserve unit.

Reserve components determine eligibility for Chapter 1606. VA does not make decisions about eligibility and cannot make payments until the reserve component has determined eligibility and notified VA.

Period of Eligibility

If a reservist separates from the Selected Reserve, benefits generally end the day of separation. If an individual stays in the Selected Reserve, benefits generally end 14 years from the date the reservist became eligible for the program. For reservists who became eligible before Oct. 1, 1992, benefits generally end 10 years from the date they became eligible. Under special circumstances, eligibility may be extended.

Payments

The full-time rate is $282 a month for 36 months for full-time training. Part-time benefits are reduced proportionately. For complete current rates, visit http://www.gibill.va.gov. The Department of Defense may make additional contributions, or "kickers," on behalf of individuals in critical military fields, as deemed necessary to encourage enlistment.

Training Available

Eligible reservists may take undergraduate, graduate or technical training at colleges and universities. Those who have a six-year commitment beginning after Sept. 30, 1990, may take the following training: courses for a certificate or diploma from business, technical or vocational schools; cooperative training; apprenticeship or on-the-job training; correspondence courses; independent study programs; flight training; or remedial, deficiency or refresher courses needed to complete a program of study.

Work-Study

Eligibility for the Work-Study program under the Selected Reserve Montgomery GI Bill is the same as in the Active Duty Montgomery GI Bill.

Tutorial Assistance

Benefits for tutorial assistance are the same as in the Active Duty Montgomery GI Bill.

Counseling

VA counseling is available to help Chapter 1606 participants assess their educational and vocational strengths and weaknesses, or to help plan educational or employment goals.

Benefit Programs (continued) >>
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