The G.I. Bill Loophole

A guest post by veteran and former Education Department official Jon Oberg over at Higher Ed Watch yesterday noted that the new G.I. Bill may still end up screwing veterans over a bit, even if the new Higher Ed Reauthorization Act prevents counting veterans benefits against a veteran’s federal aid package.

Because federal aid is never enough to cover the cost of tuition, room and board, and books, it’s ultimately up to each individual institution to create a total aid package. Even if there are federal regulations about not counting veterans benefits against the federal aid package, an individual college or university might. Instead of giving a student institutional grants to make up the difference between federal aid and cost, they could end up supplementing the remaining costs with loans or work study.

The new G.I. Bill does create the Yellow Ribbon Program, which matches college and university aid dollar-for-dollar from the Department of Veterans Affairs. This could create the proper incentive for institutions to give veterans their best possible package instead of their worst. But the program is optional, and Oberg fears that still might not be enough to compete with the private loan system.

The way that federal and institutional aid is packaged is complicated, and it seems like individual institutions have a lot of leeway in figuring out how to allocate aid packages. This can be good or bad, depending on the priorities of the institution.

Cross posted at Pushback.