If I'm Eligible to Receive a Traditional Student Loan Will it Affect my Military Education Benefits?
Service in the military offers a wide array of education benefits for individuals to use while enlisted or after leaving the military.
There are also benefits available for spouses and dependents. When applying for financial assistance, many may wonder if eligibility for a traditional student loan will affect military education benefits.
Federal financial assistance does not affect eligibility of military education benefits. The first step in applying for any type of financial assistance is filling out the Free Application for Federal Student Aid.
Eligibility for Both Types of Assistance
All individuals associated with the military are encouraged to apply for military education benefits, including those actively serving, veterans, retirees, and reserve personnel.
Those who are applying for active duty status can complete the FAFSA before exiting the military or before admittance to an institution. Individuals applying as veterans must be currently serving or have served in active duty of one of the armed forces, serving or have served for Reserve or National Guard, received honorable discharge, attended a service academy, or will become a veteran by a certain date.
The eligibility for federal student assistance is typically based on financial need and various other aspects.
The common requirements include: U.S. citizen or eligible non-citizen, valid Social Security number, males between 18 and 25 years old must register with the Selective Service, high school diploma or GED certificate, and maintaining satisfactory academic progress of a minimum 2.0 grade point average.
Military Education Benefits and Federal Financial Assistance Combined
Students are able to receive federal financial assistance in addition to military benefits. In fact, military students are often encouraged to apply for financial aid because federal and state benefits may not always cover the complete cost of higher education.
Receiving military education benefits does not affect the eligibility for federal assistance and the benefits do not count as income for federal aid.
State military benefits are regarded as a resource instead of income. However, non-educational military benefits, such as food allowance, disability, and pensions, must be listed as untaxed income.
Types of Loans
There are a variety of loans that are federally funded and paid directly to the institution of higher learning. Every loan has varying interest rates, fees, and payment plans. Federal Perkins Loans are low-interest, around 5 percent, intended for undergraduate and graduate students who demonstrate an extraordinary financial need.
The loans are paid directly to the financial aid office of the institution and students set up billing and payment arrangements through this office. Some schools pay a student directly, and others apply the loan to the balance of a student’s account.
Subsidized Direct Stafford Loans are for students who show financial need and the amount able to borrow depends on the FAFSA.
These students are not charged interested while attending a college or university a minimum of half time and during deferment and grace time frames. Unsubsidized Stafford Loans do not require students to show financial need.
The school determines the amount that a student can borrow and interest accumulates from the initial pay out time.
Students can pay the interest while attending school and throughout grace, deferment, and forbearance time frames, or they can allow it to accrue and be added to the base amount of the loan.
Federal student aid and military education benefits work together to provide financial assistance to military personnel to help pay for all the costs of higher education, including tuition, fees, books, and living expenses.
This helps provide a more rewarding and less stressful college experience.