GI Bill Benefits and In-State Tuition When Separating From Service

Another little gift was tucked into the recently passed VA health care legislation:  incentive for colleges and universities to offer in-state tuition to recently separated veterans and their family members using  GI Bill funding for their education.  And serious incentive it is:  those schools will lose their VA approval if they do not to offer in-state tuition to certain students using either Montgomery GI Bill or Post 9/11 GI Bill educational benefits.

This law was written to protect transitioning military families who may not yet be able to meet the current residency requirements in some states.  In order to qualify for this benefit, students will have to begin their education within three years of the veteran’s discharge from active duty, and will remain eligible as long as they maintain continuous enrollment with the school.  This applies to the veteran, and his or her spouse or children receiving transferred post 9/11 GI Bill benefits.  This legislation does not change the rules regarding providing in-state residency to active duty families.

Under current law, the VA pays tuition at the in-state rate, but it is up to the student to qualify for in-state tuition.  About 30 states have laws that make it easier for veterans and their families to qualify for in-state tuition rates, but some states still have strict residency requirements that make it nearly impossible for military family members to qualify for the reduced tuition rates.  Students who can not obtain residency sometimes obtain financial relief from the Yellow Ribbon Program, or they have to pay the difference out-of-pocket.

This change will force states with restrictive laws to change their laws to accommodate these federal guidelines.  However, it doesn’t provide a free pass.  Schools can require students to show intent to establish domicile even if they don’t yet meet the physical presence tests.

Proponents of the change say it will help military families receive in-state tuition in situations where military service has made it difficult to meet the state’s requirements.  Opponents of the legislation say that it will give military families more leeway in claiming in-state rates in states where they have no intention of residing, and that it will reduce federal funding to already squeezed university budgets.

In the legislation, it references a start date of 1 July 2015.

The full text of the legislation can be found here, and specific references to tuition can be found by using the CTRL-F search function to find references to “in-state.”

What do you think?

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.