It’s college financial aid season, and prospective students across the US are receiving admissions and financial aid award letters for programs starting in the fall of 2026. These financial aid award letters are part of the decision-making process for where these students will attend school. If they have access to Post-9/11 GI Bill benefits, understanding exactly how those benefits will impact their other financial aid awards is an essential part of the decision-making process.
Also Read: How to increase TSP contributions without shrinking your paycheck
This article does not discuss Post 9/11 GI Bill benefits in general, or the process of transferring benefits from a service member to an eligible dependent.
The Last Payer of Tuition
The key piece of information is that the Department of Veterans Affairs is always the last payer of tuition and fee expenses under the Post-9/11 GI Bill. This means that any other awards earmarked for tuition and/or fees must be applied for before the Post-9/11 GI Bill will pay any benefits. The school will only submit the remaining balance to the VA for payment.
For example, let’s say the student is attending a school with tuition and fees of $10,000 per year. If the student has no other financial aid designated solely for tuition or fees, the Post-9/11 GI Bill will pay the entire $10,000. However, if the student receives a $5,000 scholarship that may be used only for tuition, the VA will pay only the remaining $5,000 in Post-9/11 GI Bill tuition benefits. That $5,000 scholarship won’t reduce the amount that the student pays. It only reduces the amount that the VA pays. This is called displacement: One type of aid is displacing another type of aid.
In contrast, if the student receives a $5,000 scholarship that can be used for other expenses, the school may apply that $5,000 to other costs, such as room and board. Then, the VA will pay the full $10,000 in tuition and fees using Post-9/11 benefits. In this case, the student’s total out-of-pocket cost is reduced by the $5,000 scholarship.
How Aid May Change With GI Bill Benefits
The majority of financial aid is provided directly by the individual colleges and universities. Whether merit-based or need-based, schools regularly award thousands of dollars to students. As we’ve seen above, if those awards are only for tuition, then any money given by the school doesn’t reduce the cost to the student; it simply reduces the cost to the VA.
From a school’s perspective, that doesn’t make much sense. Whether they are rewarding academic, athletic, or artistic talent with merit aid, or awarding need-based financial aid to make college more affordable, a school doesn’t benefit when their contribution reduces the amount that the VA pays.
As a result, most schools will revoke any tuition-only awards they have given if the student is using Post-9/11 GI Bill benefits.
Let’s say Susie Student attends a school that charges $20,000 per year in tuition and fees. The school awarded Susie $10,000 in need-based aid, based on her financial situation. If she notifies the school that she is using Post-9/11 GI Bill benefits, the school will likely rescind her need-based aid. Either way, Susie pays $0 in tuition and fees, but when they rescind their need-based aid, the school saves that $10,000 that can be given to another student.
No Impact on Other Post-9/11 GI Bill Benefits
In addition to tuition and fees, the Post 9/11 GI Bill also pays a Monthly Housing Allowance (MHA) and a books allowance. Because both of these allowances are paid directly to the student regardless of their actual costs, neither of these two benefits is impacted by other forms of financial aid. In fact, a student could receive financial assistance to cover all their housing, food, and book expenses and still receive their full MHA and book allowances.
For example, let’s say Colin College receives a $2,000 scholarship from the local spouse’s club that can be used for living expenses. Colin could get the $2,000 check from the spouse’s club, and also receive MHA and books allowance from the VA. In some cases, the check might need to go through the college, but if the rules allow, the school can refund that money to Colin for his living expenses.
Side note: military spouses using transferred Post 9/11 GI Bill benefits can’t get MHA if their service member is receiving Basic Allowance for Housing. In the example above, Colin would only receive MHA if his veteran was no longer serving. If Colin’s husband or wife were still serving and receiving BAH, then Colin couldn’t receive MHA.
Every School Is Different
How this actually unfolds at each school will depend on how different forms of financial aid are coded and on the school’s unique policies and practices. For example, some financial aid may be coded so that it can be re-allocated to another expense. Some schools will consider certain types of aid as tuition-only, and other types of aid as available for different costs.
The only way to know exactly how using Post 9/11 GI Bill benefits will work out in your specific situation is to ask the school itself. You’ll usually ask this of the School Certifying Official, who serves as the designated liaison between the school and the VA. You can generally find the SCO in the veteran’s center, the bursar’s office, or the financial aid office. At some schools, the SCO may direct you to another official to answer your questions.
As you compare financial aid award letters, be sure you know whether you might use Post-9/11 GI Bill benefits and how those benefits will impact the aid listed on those award letters. Only with all the information can you make the best financial choice about your college options.
