by Andrea Downing Peck
When the Post-9/11 GI Bill became law in 2008, the updated package of veterans’ education benefits was wrapped with a “Yellow Ribbon,” a provision in the legislation that opened the door for veterans to obtain a degree from a private university or out-of-state public college at little or no out-of-pocket cost.
The Yellow Ribbon is a Department of Veteran Affairs (VA) program that permits colleges and universities to pay a portion — or all — of veterans’ educational costs that exceed the Post-9/11 GI Bill payment rates. Participating schools voluntarily agree to offset up to 50 percent of any tuition and fee shortfall and the VA matches the school’s contribution, enabling many veterans attending more expensive private universities or out-of-state public universities as nonresident students to receive a fully funded education.
Since the program’s inception in the 2009-2010 academic year, the number of participating schools has nearly tripled, with 1,929 schools signed up, ranging from Embry-Riddle Aeronautical University’s many campus locations to George Washington University in Washington, D.C., and Baylor University in Texas.
Because the Yellow Ribbon program is reserved for veterans eligible for the Post-9/11 GI Bill at the 100 percent benefit level, step one is determining if you qualify for full benefit payments.
Veterans who have served at least 90 days of active duty service after Sept. 10, 2001, and received an honorable discharge will qualify for the Post-9/11 GI Bill, but only those who have served at least 36 months from that date forward to receive 100 percent of the maximum benefit. Tiered benefit payments range from 40 percent to 100 percent. Benefits are payable for 15 years following release from active duty.
National Guard members mobilized on Title 32 on or after Sept. 11, 2001, are eligible for Post-9/11 GI Bill benefits. Active duty time for the Post-9/11 GI Bill also can include Title 10 mobilizations for reserve and guard members.
The Post-9/11 GI Bill pays for 36 months of in-state tuition and fees at a public university, including graduate studies. Tuition and fee payments to private colleges, foreign schools and non-degree granting institutions is capped and determined annually. Beginning on Aug. 1, 2015, the national maximum will be $21,084.89 per year at such schools.
In addition, full-time students receive a monthly stipend for living expenses equal to the Basic Allowance for Housing (BAH) of an E-5 with dependents in the same zip code as their school. Part-time students receive
a pro-rated monthly housing allowance, while those enrolled in distance learning receive an amount equal to half the national average BAH for an E-5 with dependents, which is $754.50 in 2015.
An annual $1,000 book and supplies stipend is paid proportionally based on the number of credits a student is taking.
Without the Yellow Ribbon program, a private university education would be financially out-of-reach for many service members or military dependents who receive transferred Post-9/11 GI Bill benefits.
According to the College Board, the average cost of tuition and fees for the 2014–2015 school year was $31,231 at private colleges, $9,139 for state residents at public colleges, and $22,958 for out-of-state residents attending public universities.
Kate Horrell, a personal finance journalist and military finance coach, is surprised how few service members and military families are aware of the Yellow Ribbon program.
“Most people I talk to have never even heard of it or they have heard of it, but they have no idea what it means,” says Horrell, a military spouse. “It is amazing to me. It is not heavily publicized.”
The Department of Veterans Affairs outlines Yellow Ribbon program eligibility information at www.benefits.va.gov/gibill/post911_gibill.asp. A United States map also provides a state-by-state listing of participating colleges, eligible degree programs, the number of students awarded benefits and the maximum school contribution per student, per year.
However, unless a school offers Yellow Ribbon benefits to an “unlimited” number of students each year, not all eligible veterans or dependents attending a participating school may receive the benefit. Texas A&M, for example, offers Yellow Ribbon benefits to 25 students in total, which means only a handful of eligible out-of-state veteran students (or eligible dependents) are likely to receive Yellow Ribbon funds to offset the more than $17,000 difference in tuition rates for nonresident students.
When 20-year-old Joshua Lear decided to study software engineering at Florida Institute of Technology, part of the Florida school’s appeal was its unlimited Yellow Ribbon awards.
“For most of the state schools, the Post-9/11 GI Bill would cover the costs without the Yellow Ribbon program,” said Lear, who is using benefits transferred from his father. “Most of the private schools — like Boston University — had only one or two Yellow Ribbon program awards per year. That was one of the big deciders with me choosing Florida Tech over Boston University.”
While many veterans had to wait weeks or months for their benefits in the first year or two of the Post-9/11 GI Bill and Yellow Ribbon programs, Lear says his experiences all have been good so far.
“Everything always comes in on time,” he said. “There’s never been a discrepancy in the amount. It’s been very transparent.”
Michael Perry, director of undergraduate admissions at Florida Institute of Technology, says he expects his school’s support for the Yellow Ribbon program to be unwavering, despite the cost to the university to do so.
“There’s a commitment from the university to support veterans,” Perry said. “What do we get out of it? We get good students. Veterans tend to be more mature than a typical student. On our side, selfishly, we want students to come here who can handle the curriculum and graduate on time.”
The Military Compensation and Retirement Modernization Commission has recommended making changes to various VA education assistance programs, including eliminating the housing allowance for dependents using the Post-9/11 GI Bill and increasing the amount of time a service member must serve before they can transfer their benefits from at least six years (with an agreement to serve four more years) to at least 10 years (with an agreement to serve two more years).
Ryan Gallucci, Veterans of Foreign Wars’ (VFW) deputy director national veterans service, is confident the Yellow Ribbon program will not under go wholesale changes or lose the backing of participating universities.
“Given the future viability of the Post-9/11 GI Bill, we would argue the Yellow Ribbon program is critical to the GI Bill,” Gallucci says. “For more expensive programs, it is an incentive for the school to have some skin in the game in accepting more veteran students.”
Since the original G.I. Bill was enacted in 1944, veterans’ education benefits historically have been scaled back following wartime periods. Gallucci says the VFW will “argue that at all costs that we need to preserve the benefit for every last service member who served in Iraq and Afghanistan and make sure they have the opportunity to take advantage of it as its fullest through their period of eligibility.”
Nonetheless, Gallucci recommends veterans not delay using their lucrative education benefits.
“We would encourage veterans to take full advantage of the suite of benefits they have at their disposal to improve the quality of life for their families,” he said.