Editor’s Note: A version of this article was originally published on Hirepurpose’s Career Compass.
The Post-9/11 G.I. Bill is the most valuable piece of compensation for your service in the military. In exchange for no fewer than 36 months of honorable and faithful active service after Sept. 11, 2001, you’ve received the Holy Grail of economic mobility.
It offers as much as the maximum cost of in-state tuition in your home state. Additionally, under legislation passed in 2014, public colleges and universities receiving G.I. Bill funding must offer veterans the benefit of in-state tuition, regardless of their residency. The G.I. Bill will pay a $1,000 book annual stipend. Vets on their G.I. Bill receive basic allowance for housing equivalent to an E-5 with dependents according to the zip code of your school. There’s even a $500 relocation allowance for veterans who are moving to a new school from a rural community.
Done right, you could go from no college background at all to a degree from a top university in four years, and be financially comfortable along the way.
But it’s all too easy to squander. Here are four of the worst (and most common) ways veterans waste their G.I. Bill:
1. Using your G.I. Bill while you’re on active duty.
Attempting to gain college credit while you’re still on active duty is an honorable (and often strategically prudent) endeavor, but using your G.I. Bill to do it is a big mistake.
There are three main reasons for this. The first is that if you are stationed on a base, your education options will likely be limited. You don’t want to waste an opportunity like the G.I. Bill on a school that isn’t the perfect fit for you, or on online classes.
The second reason is that you’ll be missing a lot of the financial incentives that come along with the G.I. Bill. When a vet uses the G.I. Bill on active duty, he or she is ineligible for the relocation allowance and the basic allowance for housing that come with the G.I. Bill benefits. In using your G.I. Bill on active duty, you’re lessening its value by tens of thousands of dollars.
The last reason not to use your G.I. Bill on active duty is that you don’t need to. Every branch has some form of tuition assistance that will let you take college classes for free while not dipping into your G.I. Bill benefits.
2. Wasting your money on a predatory school.
Through the G.I. Bill, the federal government pays out a ton of money to enable modern veterans to obtain an education. But, wherever there’s money, there are people who want to exploit it.
One unfortunate byproduct of the G.I. Bill is the rise of predatory for-profit colleges that seek to take advantage of the money the bill offers veterans. There are three types of colleges: public schools that are run by the state or local governments; private not-for-profit schools that are run independently, but rely heavily on endowments and fundraising and don’t seek to make a profit from tuition; and for-profit schools that seek to make money by charging tuition and turn a profit.
Not all for-profit schools are bad, but far too many of them are. While we don’t want to name names (*cough* University of Phoenix *cough*), the key thing is to research your school before you apply and enroll. The worst of these for profit schools will seek to keep you enrolled as long as possible, so they can continue to get money from you. After one or two years, you’re left with no G.I. Bill, possible debt, and a degree that isn’t looked at favorably among many civilian employers.
3. Using your G.I. Bill on an online school.
We get the appeal of online colleges; really, we do. You get to study on your schedule and go to work and raise a family, things that many veterans understand. But there are risks in attending an exclusively online school.
In going to school online, you will decrease the value of your G.I. Bill. For students on their G.I. Bill who take all of their classes online, their monthly housing allowance is equal to half the national average of the BAH for an E-5 with dependents, or just over $700 per month.
Even if you went to school in one of the locations with the lowest housing rates in the country — Owensboro, Kentucky, or Alpena, Michigan; for instance — you’d receive more than $1,000 in monthly housing allowance, substantially more than the online rate. If you go to school somewhere with high housing rates, like New York City or San Francisco, those allowance rates are more than $3,000 a month. We’re talking serious money that you’re missing out on by going to school online.
So if you must go to school online, do so through a program that has a brick-and-mortar campus. All you have to do is take one class in the classroom in order to get the full housing allowance based off of the zip code of that school. If you want the flexibility of online classes, that’s the way to go.
4. Using your G.I. Bill before you get to your ideal school.
Maybe you knew you were going into the military after high school, so you don’t have the grades or SAT scores to land at the school of your dreams. Maybe you have your sights set on a graduate school. Or maybe you know you want a college education, but you aren’t sure what field of study you want to pursue. In any event, don’t tap into your G.I. Bill until you get to the smartest place for you to use it.
If your end goal is to go to Penn State, but you know that you need to do a couple of years at your local community college before you can apply to transfer, don’t use your benefits on those community college credits.
Think about it this way: you’re using you G.I. Bill on a school which costs $3,000 per year with the intent of getting into a school that costs $40,000 per year. When you do get to that more expensive school, you’ve burned your G.I. Bill trying to get there. Instead, consider paying for community college out of pocket, and only tapping into your benefits when you’re where you want to be. It’s a hell of a lot easier to scrap together $3,000 than $40,000.