Higher Education Is Costly: Military Service Can Keep it Affordable

ROTC students sit and listen to a speech.

The cost of higher education and the thought of taking on student debt can be overwhelming. Perhaps you don’t think college is right for you now and want to wait. The military has options to make education affordable – whenever you choose to attend. In addition to the unique training and skills you gain as a service member, the military offers several ways to ease the cost of college. Learn more about tuition assistance, credentialing assistance, scholarships and other education benefits.

Committing to military service while in school: ROTC and military institutions

ROTC scholarships: Each service branch offers Reserve Officers’ Training Corps programs at various universities and academic institutions across the nation. Through ROTC, you will learn leadership and special skills while participating in the military and academic experiences. The ROTC program has several options, whether you’re straight out of high school, already attending a school or prior enlisted. There is a service commitment after graduation. Learn more:

Military Service Academies: Each branch of the military has a four-year university that offers full scholarships to its students. While in a service academy, you will be held to high academic and physical fitness standards. The application process is lengthy and extremely competitive. Applicants must be between 17 and 22 and unmarried with no children. After graduation, cadets and midshipmen serve as commissioned officers in the military. Get more information:

Tuition assistance and other education options while serving

College Loan Repayment Program: Various benefits are available to those who join the military after graduating from college. Qualified candidates could fast-track to officer training and apply for the College Loan Repayment Program and more. The military could pay off a portion or all your loans in exchange for a service commitment. This offer is not always available and is contingent on several factors such as your military job and your loan amount. Keep in mind that not every service branch offers this program. A local recruiter can provide specific details.

Education assistance is available.

Learn which of these various options can help you best reach your education goals in the military.

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Tuition assistance: As an active-duty service member, you may be able to attend school part time. Each service branch offers tuition assistance of up to $250 per semester hour for academic classes. Tuition assistance can be used for undergraduate and graduate programs, as well as several other programs.

Tuition assistance may not cover the full cost of college, but the Top-Up Program allows you to use GI bill funding to cover the rest. Talk to your education counselor for more information.

GI Bills: The Department of Veterans Affairs offers several programs to help veterans and active-duty service members pay for education. The GI bills are two of the most well-known programs. See the next section for details on the GI bills.

National Guard/reserves: Joining the National Guard or reserves allows you to serve in the military part time and receive education benefits.

Credential program: Earning credentials can help you develop as a service member and prepare you for civilian employment after separation or retirement. The Credentialing Opportunities On-Line program can help pay for education or training that leads to certification or license. It may also cover the exam fees of a credential.

Education options after military service

Post-9/11 GI Bill: This is available to those who serve at least 90 days of active-duty service after Sept. 10, 2001 and receive an honorable discharge. The benefit covers up to 100% of tuition and fees, a yearly stipend for books and a monthly housing allowance. As a bonus, if you’re a veteran at the 100% benefit level, you may also be eligible for the Yellow Ribbon Program. This program, available at military-friendly institutions, pays any tuition or fees not covered by the Post-9/11 GI Bill. You may be eligible for full housing allowance during the coronavirus disease 2019 pandemic.

Montgomery GI Bill: This education benefit requires you to have served at least two years on active duty and have a high school diploma or GED. Unlike the Post-9/11 GI Bill, the Montgomery GI Bill covers tuition and fees only, and you have up to 10 years after discharge to use the benefit.

If you’re already serving or recently transitioned, Military OneSource offers a free specialty consultation to help you reach your education goals, whatever they may be. Call 800-342-9647 for 24/7 help.

The cost of higher education and the thought of taking on student debt can be overwhelming at times. Perhaps you don’t think college is right for you now and want to wait. Whatever the case may be, the military has options to make college affordable – whenever you choose to attend.

Four Steps to Buying a Car as a Service Member

Cars sit in a lot for purchase.

Buying a car is a major purchase. There’s a lot to know – from sticker prices to auto loans to warranties. Avoid getting ripped off or buying more car than you need. Do your homework ahead of time, get advice from someone you trust in your command, stay clear of scammers who often set up shop right off the installation and follow these steps.

1. Consider how a car fits into your military life

Think about how owning a car fits into your military life. That brand-new car with all the bells and whistles may look good, but remember the moment you drive off the dealer’s lot, it will depreciate in value. New cars lose value faster than used cars, as this blog post explains.

Your answers to these questions can help you figure out the type of car that best meets your needs.

  • Will you be using the car for fun, errands, to get back and forth to work, or to visit family?
  • What will you do with your car while you are deployed?
  • Would you be comfortable putting your vehicle into storage when you PCS to a place where you can’t take the car?
  • If you can take your car to your next assignment, what type of vehicle would be good for your new location?
  • Could you get by with ride-sharing or even a bike?

Free Financial Help Available

Whether you’re buying a car, a home or balancing your budget, Military OneSource offers free financial counseling to help you make smart money choices.

2. Figure out your budget

The next step in car shopping is to calculate what you can afford to spend. Use online car buying resources and Consumer Reports available through the Military OneSource MWR Digital Library to find out pricing and the reliability of vehicles you’re considering. Then use Military OneSource’s Member Connect Support Services’ car payment calculator to figure out ahead of time a monthly car payment you can afford and that also makes sense given your current and future financial situation.

Also consider extra monthly and annual expenses that go with owning a car – such as state vehicle property taxes, registration, insurance and maintenance – when figuring out your budget. It is also important to understand the gas mileage for your potential new vehicle and factor that into your monthly expenses.

Calculate your spending power on your base pay. Don’t include any extra allowances or pay that you might be receiving right now. You don’t want to build your budget around that special pay, because your car payment will still be around after that special pay ends.

Consider contacting a Military OneSource financial counselor or visiting a personal financial manager at your military installation to ask questions and get information on figuring out a budget, financing options and the car-buying process itself.

3. Focus on the financing

Many car buyers use an auto loan to pay for some of the costs of the vehicle. A loan can be a great tool to help you buy a car, but be smart in your borrowing. Making a few wrong decisions in the finance office could end up costing you. Understand the total cost of your purchase, how much you are financing and how much interest you will pay over the life of the loan.

The Military Lending Act offers protections to service members, including limiting the amount a creditor may charge. But military members still need to be extra careful because they are often sold overpriced vehicles with overpriced financing. Check out your installation’s website to see if it posts off-limits establishments to help you stay clear of local predatory lenders or car dealers.

These factors play into your loan terms and what you’ll pay:

  • Your credit score: Prepare now by checking your credit report. You may find errors to address or you may want to take steps to improve a low score. Military OneSource free financial counselors or your personal financial manager at your installation’s Military and Family Support Center can help with suggestions.
  • Interest rates: Learn a bit about current market rates for auto loans. Keep in mind that your rate will be based, in part, on your credit history, so a first-time buyer may not be eligible for the best possible rates. Check with your bank or credit union to see what they can offer to you.
  • Down payment: Larger down payments mean lower monthly costs and/or shorter loan terms, which puts more money in your pocket in the long run.
  • Focus on the total cost: Your monthly payment is an important part of the equation, but the most important part is the actual cost of the car. A creative financing person can always manipulate a loan to get the monthly payment down to a certain number, usually by giving you a longer loan.
  • Length of the loan: Longer loans mean more money paid in interest, as this infographic shows. More importantly, longer loans also mean a longer time that the balance on the loan will be higher than the value of the car, which is also called negative equity, being “upside-down,” or being “underwater.”
  • Location restrictions: Will your lender permit you to take the vehicle out of the state or country if you get overseas orders? To ship a vehicle, you’ll need written permission from the lienholder. Make sure your loan doesn’t prohibit you from moving the car across the country or world.

Planning for the financial aspects first ensures that you’ll end up with a car you can afford. It’s essential that you don’t get overextended, because money troubles may derail your military career.

4. Car shopping

Once you know what you can afford, research vehicles online to determine which ones best meet your needs as well as your budget. With information in hand, visit several sellers and test drive several different vehicles before you make a final choice. Remember, a used car is a good – and less costly – choice in most situations. A new car can quickly lose its flash and value.

Consider taking a level-headed friend with you or ask someone in your command to help you with this big purchase. It’s a lot easier to say “no” when you’re not alone. Give yourself plenty of time to make your car-purchasing decision. Don’t feel pressured by your situation or the car seller to make a snap decision that you might regret later.

Once you’ve found the right car, there are just a few more things to finalize. Remember: understanding all the costs involved in owning a car and avoiding dealer add-ons can help you buy a vehicle that keeps you in your budget.

Finish the paperwork: You’ll likely spend some time with the seller finishing the paperwork for your car purchase. If you’re buying through a dealership, be aware that they may try to sell you add-ons like extended warranties. Don’t buy anything that you hadn’t already factored into your budget. Consider taking the loan and sales contract to your legal services office for a review. Don’t sign a contract unless you are absolutely sure that you understand all the terms.

Register your car in your state of legal residence: It may be easier to register your new car where you buy it, but there are good reasons to register it in your state of legal residence. Most states will permit active-duty military to register their cars by mail.

Get the right insurance: Get your new car covered by insurance immediately. Consider comparison shopping between a few insurance companies to see if one has better rates for the same coverage. Be sure that your insurance company understands that the car is registered in your state of legal residence but generally needs to be insured where it is kept. Check with your insurer to make sure you have the right coverage.

Buying the right car for your needs and your budget can help make car ownership a positive experience. Doing your homework and shopping smart is the best way to make the right choice for your military lifestyle.

Voluntary Education Websites

American Flag

These resources offer information on federal grants and loans, scholarships for injured service members and other education tools.

Defense Activity for Non-Traditional Education Support (DANTES) DANTES supports the off-duty voluntary education programs of DoD by helping eligible service members and their families pursue their education goals. DANTES provides programs and services in certification, counselor support, distance learning, and examinations, and manages the Tuition Assistance Reimbursement Program.

Department of Education This website provides information for students, parents, teachers, and administrators, including links related to student aid, grants, and scholarships.

Department of Veterans Affairs Education Benefits The VA offers education programs for veterans of military service as well as education benefits to surviving family members.

Guide to the Evaluation of Educational Experiences in the Armed Services Provided by the American Council on Education, the Guide to the Evaluation of Education Experiences in the Armed Services has served as the standard reference for recognizing learning acquired through military experience. The Guide allows personnel to search by military occupational specialty (MOS) or courses and provides the recommended academic credit equivalent.

Student Aid on the Web Student Aid on the Web is an official US government website that provides information and resources for college students and their families to assist them in choosing the right college, applying for financial aid, and repaying student loans.

Test Center Lookup DANTES provides a website allowing service providers to search and retrieve contact information for DANTES testing centers by location, Service branch, Major Command, and/or by ship name (for Navy and Coast Guard).

Federal Grants and Loans

Various federal grants and loans exist to assist students (military and non-military) in paying for the costs of higher education:

  • Federal Grants – A grant is a form of financial aid that does not need to be repaid by the student. The federal government offers grant programs for eligible students in the form of the Federal Pell Grant, the Federal Supplemental Educational Opportunity Grant, the Academic Competitiveness Grant and the National Science and Mathematics Access to Retain Talent Grant (the National SMART Grant).
  • Federal Perkins Loans – Federal Perkins Loans are similar to Stafford Loans, except that the student borrows (and subsequently repays) the financial aid from the university instead of the federal government. Federal Perkins Loans have shorter time periods for repayment than Stafford Loans, but Perkins Loans do not require that students are enrolled at least half-time.
  • Free Application for Federal Student Aid – The Free Application for Federal Student Aid is the required application for students seeking financial aid from the U.S. government for their education costs.
  • Stafford Loans – Stafford Loans consist of the Federal Family Education Loan Program and the William D. Ford Federal Direct Loan (Direct Loan) Program, both administered by the Department of Education. Stafford Loans provide financial assistance to students enrolled at least half-time and do not require repayment until after the student graduates, leaves school or drops below half-time status.

Savings Plans, Student Loans and Scholarships for Military Teens

Teen girl being awarded scholarship

With the many available scholarships, grants and other options for financial aid, paying for college doesn’t have to be intimidating. There are plenty of resources to help you as you begin planning for your future.

As you think about how to pay for school, be sure to maximize financial aid, grants and scholarships first, then look into educational loans to cover the rest. You can also get a head start on saving with a 529 savings plan.

What’s a 529 Plan?

A 529 plan is a tax-advantaged savings plan that can make it easier to save money for college. You can check out the Securities and Exchange Commission for more details, but here are the basic facts:

  • There are two kinds of plans. 529s are either college savings plans, which can be used for college expenses at any college, or prepaid tuition plans, which lock in future tuition at in-state public colleges at the present price. Talk to a financial professional to find out which is best for you.
  • Your parents will call the shots. You’ll be the beneficiary of the plan, but your parents or guardians will be the ones to decide when withdrawals can be made.
  • The earnings won’t be taxed. This is one of the biggest perks of a 529 plan — it isn’t taxed as long as any withdrawals are made for college expenses. If the money is used for something other than college, like on a new car, tax penalties could apply. Make sure you read the fine print and know the details of your plan.
  • You can get a plan in any state. 529 plans vary by state, but you aren’t stuck with the plan from the state where you currently live. If you like another state’s plan, you can get that one instead.
  • Anyone can contribute. Make sure you tell other important adults in your life —grandparents, aunts, uncles and the like — about your 529. Next time they’re wondering what to get you for your birthday or graduation, they can make a contribution.

How can I apply for scholarships and financial aid?

  • Fill out a FAFSA. The Department of Education’s Free Application for Federal Student Aid, also known as FAFSA, should be the first step in your financial aid journey. You can either get an application from your guidance counselor or download it online — just don’t wait until the last minute. The earlier you can fill out the application, the sooner you’ll know what type and amount of aid you can expect.
  • Consider your qualifications. There are thousands of scholarships out there — it’s just a matter of finding the right ones for you. First, see what local scholarships are available in your area, and from your potential college choices. Second, check for scholarships based on your individual strengths, credentials, talents and accomplishments.
  • Military scholarships. Having a parent or guardian who is a service member may qualify you for certain scholarships. Talk to them, or contact your installation education center for more information.

What do I need to know about student loans?

After you’ve exhausted all financial aid or scholarship options and saved as much money as you can, it may be time to look into student loans. Consider these factors before accepting student loans:

  • Remember, you have to pay them back. Loans are not “free money” and you can end up paying back much more than you originally take out, depending on the interest rate.
  • Pay attention to the terms. Make sure you understand the terms of any loans you accept. In addition to the interest rate, you should also pay attention to the repayment schedule and find out about the “grace period,” or how soon you have to pay it back after graduation.
  • Go for federal loans first. You can apply for loans through the government or private institutions, but federal loans tend to have lower interest rates and a more generous grace period.
  • Check for military-offered loans. Talk to your parents and research whether you’re eligible for any interest-free loans through the military. You can also read about the various scholarships, grants and loans for military students.

Where should I start?

  • Talk to your guidance counselor. Take advantage of your counselor’s wealth of experience and make an appointment to discuss your individual options.
  • Sit down with your parents or guardians. If you haven’t already, find time to sit down and talk candidly about your plans and your family’s financial situation. You’ll need to know all of your options before you begin formulating a college savings plan. Getting everything down on paper can help keep everyone on the same page.
  • Connect with a no-cost personal financial counselor. A financial counselor can give your family more information on your options. Learn more about how to arrange for no-cost financial counseling through Military OneSource.
  • Contact the education consultants at Military OneSource for help with college admissions and financial aid applications.
  • Do your research. Lots of schools and organizations put their scholarship opportunities online, so a preliminary internet search is a great way to get your feet wet and see what’s out there.

There are many ways to finance your college education; it’s just a matter of seeking out the options that work best for you. Military OneSource has your back to connect you with the best support for the next step in your education — and before you know it, you’ll be walking across the graduation stage with a diploma in your hand.