Solving the Montgomery GI Bill Mystery

If you are qualified for the MGIB - Active Duty and you have completed more than three years active duty, your total benefits are now worth up to $53,000. Your actual benefits may be higher if you signed up for the Army or Navy College Funds or have remaining Viet Nam Era GI Bill benefits. This sum is reached by multiplying the current FY maximum benefit by 36 (the number of portions or months in your account). Don't let the term "months" confuse you -- months only correlate with the calendar for full-time academic students.

Here's how it works for Active Duty members:

You can begin using your benefit after 2 years of service, however before you choose to use the GI Bill you should know that it is usually not a good idea to use it while on active duty, because VA administers the GI Bill differently for active duty and veterans. For instance a veteran is charged one month of benefits for each $1,473 - the current GI Bill "payment rate" - in education benefits used. (Effective Oct. 1, 2011)

Example: If a veteran receives $5,000 in education benefits, and if the  full-time payment rate was $1,250, divide $5,000 by $1, 250. The veteran will be charged 4 months of the 36 months of benefits., leaving him or her with 32 months of education benefits.

However if you are on active duty and go to school full-time for 4 months, you will still be charged 4 months of benefits even if your tuition is only $1,000.  

Considering this, it only makes sense to use your GI Bill on active duty if your tuition costs are very high or you use your “GI Bill Top-up” benefit.

Note: If you are on active duty you should ALWAYS consult your Education Service Officer or Navy College representative before using your GI Bill or taking any college classes. They are trained to give you the counseling that will help you avoid wasting your time and benefits.

Here's how it works if you are a Veteran:

If you have successfully completed your military service and are a full-time student (as defined by your school), the VA will pay you the full-time rate per month regardless of the tuition costs.

Example: If you are a full time student and your tuition cost is $100 you would still receive the full $1,473 per month while enrolled in school and taking a full load.

Some Frequently Asked Questions

Is the Montgomery GI Bill considered Financial Aid?
Not in the traditional sense. In most cases the school financial aid dept. does not considered the MGIB financial aid because it is normally paid directly to you, not the school. Most schools will require you to sign a promissory note, or apply for student loans to pay them up front.

This also means that you are eligible for student loans, scholarships, and Pell Grants along with the GI Bill. But it is important to note that your GI Bill income will reduce the amount of student financial aid you are eligible to receive.

For help in locating scholarships, see the Scholarship Search.

How long do I have to use my benefits?
Once you have separated from the service you have 10 years to use all of your benefits. Although separating from service "starts the clock" on your 10-year time limit, you should know that if you re-join active-duty service or you are activated from reserve status, for more than 90 days during the 10 year period, your 10 year clock is reset. In other words you get 10 years from your last discharge from active duty.

Example: Seaman Smith left the active duty and joined the Navy Reserve. Three years later she returned to active duty with seven years remaining on the MGIB clock. At that point the clock is reset at the 10 year mark when she leaves the service again, at which point the clock will start ticking again, meaning she now has a fresh 10 years left to use ALL of her benefits, or she will forfeit her remaining balance, which then returns to Uncle Sam.

Can I stop and start using the MGIB at will?
YES! Unfortunately, many people believe that once you apply for benefits you have to remain enrolled in school to get the full benefit. Thankfully that's not true, you can use the MGIB for any period of time, take time off and reapply to use it again at a later date.

What does a "month" of benefits mean?
For Veterans: Every time you use the current FY maximum "payment rate" ($1426) of MGIB benefits you use a month.

Here is what the VA says:
If a veteran receives $5,000, and the  full-time payment rate was $1,250, divide $5,000 by $1, 250. The veteran would be charged 4 months of the 36 months of benefits.

How often will I receive payments?
In most cases you will receive your benefits on a monthly basis. However each month that you are enrolled in classes you are required to verify your "status" this can be accomplished through Web Automated Verification of Enrollment (W.A.V.E.) or by telephone. Within 3-5 days you will receive a direct deposit of your monthly benefits. However you will not receive your payment until you verify.

Will I have to pay taxes on my MGIB benefits?
NO! Your MGIB benefits are NOT taxable!

What are the current "payment rates"?
The MGIB Payment rates increase every year; click here to see the current "payment rates."

Can I be eligible for more than one benefit?
You may be eligible for more than one VA education benefit. If you are, you must elect which benefit to receive. You can't receive payment for more than one benefit at a time. The other benefits are:

• Training and Rehabilitation for Veterans With Service-Connected Disabilities
• Post-Vietnam Era Veterans' Educational Assistance Program
• Survivors' and Dependents' Educational Assistance
• Montgomery GI Bill-Active Duty Educational Assistance Program
• Educational Assistance Test Program
• Educational Assistance Pilot Program

Bonus Tip! Fill out the VA Application ASAP. The current time for processing a GI Bill Application can be over 18 weeks. This means it could take over 4 months to start receiving your monthly payments. However you can fill out your application VA Form 22-1990 at any time. If you fill out the form well before you plan to start school you can reduce the wait time by months.

Remember, many schools offer free information packets they will mail you. You can request information from multiple schools at once by filling out a form on Military.com. With no obligation or cost, learning about different schools is a great way to take the first step. Click here to request information.