Maximizing GI Bill® Benefits & Transfer of Benefits

Using DANTES, the Yellow Ribbon Program, Scholarships & More

Post 9/11 GI Bill® benefits right now are the most generous in the history of the GI Bill®. With a maximum of 36 months of benefits that pays tuition, a book stipend and a monthly housing allowance, one would think it is enough to pay for a four-year college degree. And many times, it is.

But in other cases, it does not cover all the costs of going to college today. In this guide we look at several different ways students, who are either veterans or currently serving members, can use to get the most from their GI Bill® benefits with the goal being to have as little out-of-pocket expenses as possible.

GI Bill® is a registered trademark of the U.S. Department of Veteran’s Affairs (VA). More information about educational benefits offered by the VA is available at the official U.S. government website at http://www.benefits.va.gov/gibill.

Real Ways to Maximize Your GI Bill® Benefits


  • DANTES

    The Defense Activity for Non-Traditional Education Support (DANTES) is a program where veterans or currently serving members can take end-of-course final exams in select college courses – usually first-year 3-credit introductory ones – and if passed, get credit for the course without having to take the course.
    There are three different DANTES test categories:

    • College Level Exam Program (CLEP)Of the three exams, CLEP tests are the most popular. There are 33 typical freshman-level exams in five subject areas: composition and literature, world languages, history and social sciences, science and mathematics, and business.
    • Excelsior College Exams (ECE)For service members having experience in healthcare or teaching, ECE tests are a good choice as they are more focused in those two areas. The 55 exams fall into six categories: business and technology, education, humanities, natural sciences and mathematics, nursing and social sciences, and history.
    • DANTES Subject Specialized Tests (DSSTs)These 36 tests are divided into the following six categories: business, humanities, math, physical science, social science and technology.

    Most DANTES tests take around 90 minutes to complete. With each exam awarding on average three credits, taking 33 CLEP tests alone could earn 99 credits. However, be sure to check the school’s policy on transferring in credits as most would not accept that many on a transcript. But by combining DANTES and the ACE conversion credits awarded for military service, veterans can be well on their way to a degree.

    The power of DANTES is awesome, yet highly under-utilized. It is a fast way to build up college credits and it does two things: gets you to a degree quicker and conserves GI Bill entitlement for the courses you must take later. Tests are free for military personnel having a Common Access Care (CAC), however, veterans and dependents must pay for their tests. But, the cost of the test in almost all cases is much less than if paying to take the course, and it conserves GI Bill benefits which could then be used later, for example, to pay for more expensive graduate school tuition.


  • Military Transcripts

    Much of the training military members receive can be parlayed into college credits. For example, Military Occupational Specialties (MOS), Professional Military Schools (NCO and Officer) and much of the training qualify for credits that can in turn be applied towards a degree. See what credits you may have that can be applied toward a degree by applying for a transcript.


  • Scholarships and Grants

    These sources of education financial aid are free for the taking, and the best part is that neither require repayment. Application procedures vary and can be as simple as filling out an application or may require writing an essay in addition to an application. Many scholarships and grants worth thousands of dollars go unawarded each year due to a lack of applicants.

    Some scholarships and grants are geared toward veterans, military members and specific protected groups, while others are open to all students. Here is a brief sampling of some of the scholarship and grant categories:

    • General
      This category of financial assistance is not specific to any one group. Run-of-the-mill sources of financial aid are abundant and easily found.
    • Women
      Women are a force of their own and as such recognized separately. As a result, some scholarship programs apply only to the fairer gender and others are more restrictive yet pertaining only to female military members or veterans.
    • Disabled
      Veterans in this category deserve all the financial help they can get so they can get trained in a skill commensurate with their limitations. Many different scholarships and grants are available to help them along with their education endeavor.
    • Specific Branches
      Because the military values education both while serving and after, many of the branches, either directly or through one of their member associations, offer scholarships to their own people and families that served in that branch.
    • School-specific
      Most schools offer their own scholarship. Some are routinely offered, while others must be selected to receive and are usually based on some type of qualification such as need.

    For more information on scholarships and grants, go to the U.S. Department of Education website for Federal Student Aid. Don’t forget to search the top-line menu while there.


  • Federal work-study program

    This is a great source of funding for students looking to fund part of their education and putting in the time to get it. The beauty of the Federal work-study program is they try to match your work to your degree program. So not only do you earn money for school, but you get some on-the-job experience in the process. That gives you an edge when it comes to listing experience on your resume.


  • FAFSA®

    Filling out the Free Application for Federal Student Aid (FAFSA®) can net extra money from sources that might otherwise be unknown. Financial aid sources usually come from two areas: need-based and non-need-based. One of the good things about the FAFSA® is that is does not include GI Bill payments as income, so your reported income on the application is actually lower than what you made in that reported year.


  • Combining GI Bills

    Many veterans come out of the military with two GI Bills: the Montgomery GI Bill – Active Duty (MGIB-AD) and the Post 9/11 GI Bill. For veterans having just one GI Bill or the other, they would have up to 36 months of benefits, but when combined, that coverage increases up to a possible 48 months of coverage under the Rule of 48. Now instead of just having enough entitlement for a four-year degree, there would be enough to help pay for a graduate degree too, but only if they are used in the correct order.

    • To get the 48 months, veterans must first exhaust their MGIB-AD and switch GI Bills to get the additional 12 months of coverage. Veterans have the option to switch to the Post 9/11 GI Bill right away to get the better pay structure, but in doing so give up the additional 12 months. Veterans having used some of their MGIB-AD eligibility can also switch, however they only get the same number of Post 9/11 GI Bill months as they had left under their MGIB-AD.
    • Deciding which route to go comes down to an individual’s educational goal. If there is no desire to progress farther than a four-year degree, then most students are better off switching to the Post 9/11 GI Bill right away.
    • However, if a graduate course of study is in the plan, then it may be better to use the MGIB-AD for undergraduate work that has the cheaper tuition rate and save the 12 months of Post 9/11 GI Bill for the higher graduate tuition rate.


  • Yellow Ribbon program

    While not applicable to all students having the Post 9/11 GI Bill, it can be a financial boon to students attending private schools, or to students classified as non-residents and paying out-state tuition. The Post 9/11 GI Bill only pays up to $22,805.34 per year in tuition at private or foreign schools. Some schools charge that much for one semester.

    In the case of non-resident students, the VA can only pay up to the resident rate, which leaves an unpaid balance between what the VA pays and what the school charges in out-state tuition. However, if the school has a Yellow Ribbon agreement with the VA, and not all of them do, a part of that unpaid balance (up to all of it) could be waived between what the school and VA together apply toward it.

    In a school’s Yellow Ribbon agreement, the following should be stated:

    • the percentage of unpaid difference of tuition the school will waiver
    • the maximum number of students in the program at any one time
    • a yearly monetary cap per student (if any)
    • majors covered and at what degree level

    A school has the option to waiver up to 50 percent of the unpaid balance in tuition; the VA matches whatever the school waivers on top of the tuition they already paid) making it possible for the student to have zero out-of-pocket costs. Of course, if the school chooses to waiver a lesser percentage, the VA will end up paying less too and the student would have some out-of-pocket expense.

    If eligible for the Yellow Ribbon Program, a student would apply for it when registering for classes as a GI Bill student. It is the responsibility of the school to notify the student if s/he were chosen for the Yellow Ribbon program or not.


  • Mixing Online and On-Campus Classes

    The way the Post 9/11 GI Bill is set up, students who attend classes only online get approximately half as much monthly housing allowance as students who take at least one class per semester on campus and the rest online. Just taking one 3-credit class on-campus per semester can double the housing allowance.


Things to Know about Maximizing GI Bill Benefits

  • Tuition is expensive today at most four-year colleges and graduate schools. One smart way to maximize Post 9/11 GI Bill benefits, especially if you plan to attend graduate school, is to go to a community college for the first two years and pay the cheaper tuition out-of-pocket. At the end of two years, switch to a four-year school and use your GI Bill to pay for the rest of your bachelor’s degree and up to two years of the much more expensive graduate degree. If attending a public school and at the 100 percent Post-9/11 GI Bill benefit level, the full tuition would be paid for the rest of the four-year degree and grad school.
  • If attending a private school, choose one that has a generous Yellow Ribbon program that includes your area of study both at the undergraduate and graduate level. If selected, it would help offset what the New GI Bill could not pay. Remember the Post 9/11 GI Bill limit for private school is $22,805.34 per year.
  • Accepting certain types of financial aid can have some implications when it comes to maximizing your Post 9/11 GI Bill benefits and here is why. There are two types of financial aid: the type that is dedicated to pay towards tuition and the type that can be used for anything. If not using the Post 9/11 GI Bill in conjunction with other forms of financial aid, it does not make a difference which type is used. However, when used with the New GI Bill, having dedicated tuition money will reduce the amount of tuition paid by the VA under the Net Payer Rule as explained below.

What is the net payer rule? How does it affect maximizing the benefits?

In general, the Net Payer rule says the VA is the last payer when multiple forms of financial aid are used to pay for tuition. In other words, all the other forms of financial aid that must be applied towards tuition are applied first to pay down the tuition bill and the VA pays what it is authorized to pay on the balance.

So how does this affect maximizing your Post 9/11 GI Bill? What many using their New GI Bill don’t realize is that regardless of how much (or how little) the VA pays toward their tuition, the amount of entitlement deducted from their remaining balance is the same – generally four months per semester.
The net payer rule does not affect the monthly housing allowance or book stipend, but depending on what the VA ends up paying, the entitlement expenditure for what the student get in return might not be the best bang for the buck.

Scholarships & Grants Specifically for Family Members of Servicemembers

Many dependents (children and spouses) are fortunate enough to have received Post 9/11 GI Bill entitlement from a parent through a Transfer of Education Benefits (TEB). Depending on the number of months transferred, it often is not enough to pay all the expenses required to complete a degree. In these cases, the student should apply for these types of financial aid to make up for the shortfall. Below are five examples worth seeking:

  • AMVET Scholarship
    American Veterans
    Up to a $4,000 award available to current high school seniors who are either children or grandchildren of veterans and active duty personnel. Deadline is May 1st and money is awarded based on financial need, merit and academic promise, and may be used for part-time or full-time education programs at accredited schools.
  • Fry Scholarship
    Department of Veterans Affairs
    Up to $22,805.34 per year (private school) or 100% tuition at public school. Deadline: Benefits must be used by age 23 for children and 15 years from date of the servicemember’s death for spouses – Mirrored to the Post 9/11 GI Bill, it provides up to 36 months of paid education benefits consisting of tuition, monthly housing allowance and annual book stipend. Available to children and surviving spouses of service members killed in the line of duty after September 10, 2001.
  • MyCAA
    Military Spouse Career Advancement Accounts Program
    Spouses of lower-graded military members, including active duty, National Guard and Reserves (and even spouses themselves on Title 10 orders) can get up to $4,000 to pursue licenses, certificates, certifications, or associate degrees in certain high-demand portable career fields and occupations. Eligibility is limited to spouses of service members in the following grades: Enlisted E-1 to E-5; Warrant Officer W1 to W2; Commissioned Officer O1 to O2. Training must be completed no later than three years from starting the program.
  • Scholarships for Military Children
    Military Scholar
    Funded through the Defense Commissary Agency, this scholarship awards approximately 700 scholarships of $2,000 each per year. To apply, students must be enrolled full-time in at least a two-year school and maintain a GPA of at least 3.0 on a 4.0 scale. Eligibility of family members are restricted to sons and daughters of active duty, Selected Reservists and retirees.
  • ThanksUSA Scholarship
    ThanksUSA
    On average, $3,000 awarded, and deadline is in May. Their mission is to provide college, technical and vocational school scholarships on a need basis to the children and spouses of U.S. military personnel. Since 2006, this private program funded primarily through donations has awarded 4,000 scholarships worth $12 million.

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