Military Veterans: Filling out Your FAFSA
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.
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.
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.
More About College for Military Personnel
- Military Students and the Government Shutdown
- Seven Tips for Transitioning from a Military to a Civilian Career
- Common College Perks for Military Personnel
- What is the Montgomery GI Bill "Top-Up" Benefit - And Do You Qualify?
- Members of the Military: Does Your School Qualify for GI Bill Assistance?
- Six Things You May Not Have Known About the Military Tuition Assistance Program
- Military and Veteran Students: Getting Funding for Education Outside the Federal Government
- The GI Bill Consumer Awareness Act: How it Helps Veterans