If you've transferred GI Bill benefits to a child, how will that affect his or her ability to get needs-based financial aid for college? For many active or retired senior military officers and NCOs, the question may be moot, as family income may already severely limit the access to needs-based financial aid. But that may not always be the case. So, do GI Bill benefits affect financial aid?
The short answer is "No". You might think that at least the BAH portion would have to be reported as income, but it isn't. Tuition covered by the GI Bill isn't counted either.
So, use your GI Bill and file the Free Application for Federal Student Aid (FAFSA). You never know what might happen
The Same Rules Don't Apply to All VA or Military Benefits
The same can't be said for some other VA or military benefits.
Dependency and Indemnity Compensation (DIC) does count as income when completing the FAFSA. Some other types of VA education benefits like work study programs also count as income and must be reported on the FAFSA. While likely not a factor if you've given your GI Bill benefits to a child, VA Disability Compensation needs to be reported on the FAFSA.
Combat pay is not reported when completing the FAFSA either. As you complete your FAFSA based on your income from two years prior, this could affect you or your child after your retire.
Military and Veteran Finances are Different
Just like a military career is different than a civilian career, military and veteran finances are different form civilian finances. If you're considering working with a financial advisor, we think you should work with one that deals with those differences every day. Give us a call if you'd like to chat.
If you found this article useful, you might like the following blog posts:
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.