Rules that dictate how the Post-9/11 GI Bill works together with other forms of financial aid often prevent those other forms of aid from reducing your out-of-pocket college costs at all. Understanding this can help you choose the right college and be prepared for what you will actually need to pay.
The Post-9/11 GI Bill pays full tuition at state schools, assuming you are able to use the rules that grant you in-state tuition. At private schools, it pays up to an annual cap. However, the Post-9/11 GI Bill is always the last payer of tuition and fee expenses, meaning it’ll pay only what’s left over after other tuition and fee aid is applied.
Every form of financial aid has rules about how it can be used. Whether it’s a merit or need-based scholarship from the school, a private scholarship or a government grant, the aid can be used only according to its rules. Many private scholarships and school aid, both merit and need-based, can be used only for tuition.
If a tuition-only scholarship or grant reduces the amount of tuition you owe, it reduces the amount of tuition that the Post-9/11 GI Bill will pay. This means your cost will be the same with or without that scholarship.
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For example, let’s say that you’re going to a school that costs $20,000 per year. If you have no other aid, the Post-9/11 GI Bill will pay the entire $20,000, assuming you’re attending full time. However, if you get a $5,000 school scholarship that can be used only for tuition, that will bring your tuition bill down to $15,000. That’s how much the Post-9/11 GI Bill will pay. Your out-of-pocket cost remains $0 either way, but that $5,000 scholarship hasn’t benefited you.
This concept is called displacement, meaning one form of payment (the scholarship) replaces the other form of payment (the Post-9/11 GI Bill).
In this example, the school can see that you’re not benefitting from the scholarship. As a result, it may choose to rescind the scholarship. From its perspective, spend $5,000 of their limited financial aid money simply to reduce the amount that the GI Bill pays doesn’t make sense. This is most frequently true with need-based aid, but it can apply with any aid.
Again, your out-of-pocket cost is still $0. So that’s a good thing.
How to Keep Your Scholarship Value
A couple of strategies can help you maintain the value of aid that might be subject to displacement.
Ask for an Exception
First, you can ask the aid grantor if it would allow the aid to be used for something other than tuition. Sometimes, aid rules can be re-written, or an exception given, for the aid to go toward other costs, such as room, meals or books.
If the Post-9/11 GI Bill won’t cover all of your schooling, you can ask the grantor if it would be willing to defer the aid to another semester. For example, perhaps you have only 16 months in Post-9/11 GI Bill benefits and you need four years of school. If the aid grantor is willing, you could use the Post-9/11 GI Bill each fall semester, then use the other aid in the spring semester. This is a significant change in payment distribution, as most aid gets divided up between the semesters. This requires some coordination, but if the grantor is willing, it works well.
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Applying it to our previous example, the Post-9/11 GI bill would pay the full $10,000 in tuition each fall semester. In the spring semester, the $5,000 aid would offset the $10,000 tuition bill, leaving just $5,000 in tuition to be paid through other means.
Consult Your School Certifying Official
So how do you know how the rules will play out in your unique situation? In addition to carefully reading your financial aid award letter, you will likely need to talk to the school certifying official (SCO) at the school you hope to attend. SCOs are the VA-trained professionals at the school. They can show you exactly how your Post-9/11 GI Bill benefits will interact with whatever other forms of aid you have available.
Knowing how financial aid can be displaced and how you may or may not be able to work around it is a key part of deciding whether a school fits in your college financial plan. You’ll want to have a full understanding of the rules before starting on a program so you won’t have surprise costs that could derail your educational goals.
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