How Do Scholarships Affect What the VA Pays When Using the New GI Bill?

The way the Post 9/11 GI Bill works is the VA will pay her tuition and eligible fees (up to the in-state maximum for right now) directly to her school. She will get the book stipend at the beginning of each term (semester, quarter, etc.) paid at the rate of $41.67 per credit. She will also get paid a monthly housing allowance provided she is not taking all online classes and has a rate of pursuit of at least greater-than-half-time. Because the VA is always a month behind, she will get it after the month she actually earned it.

Due to a change that will start later this year, the in-state maximums will be eliminated and the VA will pay actual Post 9/11 GI Bill tuition and eligible fee charges at public schools.

As far as how other sources of funding will impact what the VA pays, it will depend on how those other sources of funding have to be used. Some scholarships have to be used towards tuition/fees while others do not. The ones that have to be credited toward tuition/fees, will drop the amount left for the VA to pay as they are the last payer. When the other sources of fenced funding are credited first, the actual charges left for the VA to pay will be less. If none of the scholarships are fenced money, then she could use it for housing, books or whatever and the VA would pay the full actual tuition/fees charge up to the in-state limit (for right now).

One issue that can crop up is that some scholarships do not show up right away at the beginning of a term, so the VA pays what the school charges (up to the in-state limit) and then mid-term a fenced scholarship or two shows up meaning now the VA has overpaid the school. This can happen multiple times during the course of the term, so it can be a back-an-forth situation to get the accounting correct.  In certain situations, it can also happen to a student, so students have to be vigilant about keeping track of scholarship and VA money and if they get into an overpayment situation, pay the money back to the VA right away, so it doesn’t affect their future VA payments.