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Military Veterans: Filling out Your FAFSA

Jun 23, 2010 Jennifer Williamson, Distance Columnist | 4 Comments

Filling out a FAFSA is not the easiest of processes—even for straightforward traditional students. For military veterans, the FAFSA can get very complicated, very fast. Here are a few things to keep in mind when filling out your FAFSA as a military veteran.

How the FAFSA Considers Your Combat Pay

When you’re taxed, you’re allowed to exclude mention of your combat pay from gross income. However, you do have to include it when applying for financial aid—on Worksheet B, under Untaxed Income. You also have to include it in earned income figures—there is a category for combat pay in Box 12(Q) of your W-2.

If you didn’t file an income tax return for combat pay, be careful not to repeat it twice. Include it only in earned income amounts, not on Worksheet B, or you could be over-reporting your income.

You’ll also need to report housing allowances and subsistence allowances. You should not, however, report any untaxed income from the year of your award—for example, because you’re no longer serving active duty—the school can use professional judgment to consider removing these amounts from the income counted. Talk with your school if you have untaxed income in this category, as schools have the leeway to make these adjustments under the HEROES Act.

Military Student


Your Status On the FAFSA

It seems simple—under the federal rules, all veterans are considered independent. This means they shouldn’t have to report their parents’ income on the FAFSA.

However, it’s a little more complicated than that. The US Department of Education has different standards for who it considers a “veteran” than the Veterans Administration does. For federal student aid purposes, “veterans” are those who have engaged in active duty with the Army, Navy, Air Force, Marines, or Coast Guard and who were not dishonorably discharged. This also includes basic training, but only for individuals who are veterans and not currently on active duty.

National Guard and Reserve members are only “veterans” if they were called on active duty by Presidential order, not by the State.

Another confusing issue is whether you’re a veteran or on active duty. You’re only considered a veteran if you were released from active duty, not training—even if you only served one day of active duty. If you’re still on active duty, you’re not a veteran. However, the government will treat you as a veteran for student aid purposes if you will be one by June 30 of the year you plan to attend school, if your commanding officer writes you a letter confirming this.

Your Education Benefits: Rewards vs. Income

As a veteran, you’re eligible for education funding benefits under several different programs. When applying for federal student aid, these shouldn’t be reported as income. You’ll find on your FAFSA separate sections asking about your monthly military benefits and the amount you receive every month. This is your resource section—and your benefits should be reported as resources.

Resources reduce the amount of need-based financial aid you qualify for by one dollar for every dollar of resources you get. Your income affects what your Expected Family Contribution will be. If you enter your benefits twice—in the areas for earned income and for resources—you could have it counted twice.

Avoiding Over-Awards

A school may have to reduce your financial aid package if the sum total of your financial aid and resources goes over your actual financial aid, as demonstrated on your FAFSA. When this happens, the school has to reduce the amount of financial aid you get.

You have to include in your resources your veterans’ benefits including Montgomery Bill benefits. However, you can eliminate mention of any veterans education benefits already included in calculating your expected family contribution—so make sure no resources are counted twice.  Colleges can also choose not to count any amount of a subsidized Stafford Loan that is either less than or the same amount as your Montgomery GI Bill.


It isn’t always easy getting enough financial aid—even if you’re a military veteran. The FAFSA isn’t an easy document to make sense of. Bear in mind that you don’t have to include your parents’ income if you are a veteran. Be careful when filling out the FAFSA—and hopefully you’ll get all the financial aid you’re entitled to.



Tjbinajr Over a year ago

Question. My son joined the Marine Reserves and is at boot camp right now. Jan - Mar. 2012. He is a junior in college and is missing his spring semester. When we do the FAFSA, what can we put down? His recruiter told him his senior year would be paid for. How does that happen????

SarahRi Over a year ago

I would highly recommend that you speak with your son's recruiter about how to correctly fill out the FAFSA for his particular situation. The recruiter or someone else in the Marine Reserves department will be able to give you the best guidence in that area. I would also recommend that you read this article for more tips about filling out a FAFSA: Five Common Mistakes To Avoid When Filling Out the FAFSA.

Mississauga Limo Over a year ago

Yes I ft g

Especially war veterans must study the FAFSA Forms very carefully whenever they propose to fill it up because it can get very complicated very fast.New recruits should also take care and try to get their recruiters to help them with filling the form, as otherwise, there is every likelihood for them to go wrong. New recruits however need not worry about entering their parent's earnings on the form.

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