No More Break Pay? 3 Resources for GI Bill Students on a Budget

GI Bill 2.0 expands many of the provisions of the original Post-9/11 GI Bill, but one significant cut has some veterans scrambling to get their budgets in order.

Under GI Bill 2.0, break pay, or funds that veterans received to cover housing and other expenses when school wasn't in session, is eliminated. This change affects veterans using the Post-9/11 GI Bill as well as other veterans education programs. Instead of receiving the same payment every month, regardless of when classes were in session, monthly payments for housing and other stipends are now prorated.

The Department of Veterans Affairs explains, "This means that when your semester ends (e.g. December 15th), your housing allowance is paid for the first 15 days of December only and begins again when your next semester begins (e.g. January 10th) and is paid for the remaining days of January." Other monthly benefits will also be prorated.

Break pay changes could threaten students' finances

The elimination of break pay has a different effect on veterans depending on their situation. Some young veterans find that GI Bill funding is more than adequate to meet their financial requirements. For example, one veteran interviewed for this story, a single man with no existing financial obligations who was recently discharged from the Marines and living in Iowa, said that he was living better than he ever had with his GI Bill benefits.

Veterans with families or other financial commitments may have a harder time stretching GI Bill benefits to cover their expenses. With unemployment high among young veterans and good paying jobs harder to find, VA benefits are an important financial resource for some veterans. Kenneth Kopf, who is employed full time and attends Moraine Valley Community College in Illinois, relies on his GI Bill benefits to help meet his living expenses while in school.

"The GI Bill has not only helped me by letting me get an education, which is highly needed in this tough economy, but it has also helped me keep my house," Kopf said. "If it wasn't for the monthly [housing allowance], I would have had a hard time paying my mortgage. I thought I would be able to get a better job with my mechanical experience and Army backgrounds, but the economy went just before I got out."

Three sources for financial planning assistance

Now that break pay is eliminated, GI Bill veterans may need to rethink their finances to make sure their funds stretch a little further. A number of public and private organizations offer financial planning help for veterans.

1. The Career Decision Toolkit

Run by the Department of Defense, the Career Decision Toolkit, located at www.turbotap.org provides information and guidance on personal finance, including interactive sections and discussions. Designed for separating military members, the site offers tools to help veterans construct a budget, compare financial plans and deal with changes in their finances.

Dirk Bettis, recently retired from the Army and planning to attend college next semester, said that turbotap.org is "awesome" and was surprised that he had never heard of it before.

The Career Decision Toolkit is offering a live online learning event called Financial Planning for Career Change, which will take place September 12 at 7:00 pm Eastern.

2. Student Veterans Organizations

Many college and university campuses have student veteran groups that can offer advice, resources and support for veterans dealing with financial issues. Bettis said that many of his peers experienced financial challenges while attending college using their military education benefits, and he said a number of them found help from student veterans organizations. One national group, Student Veterans of America, has local chapters on campuses nationwide and offers a scholarship guide and resources on benefits for veterans on its website.

3. Local organizations

Often help is available right off campus, as well. The National Foundation for Credit Counseling (NFCC), the nation's largest financial counseling organizations, is one such organization offering assistance. The NFCC Member Agency Network includes over 800 community-based offices located in all 50 states and Puerto Rico.

Another nonprofit organization is Clearpoint Credit Counseling Solutions, which offers help online or by telephone as well as at locations in 11 states. Posey Lynott Lavelle, vice president of operations with CCCS of Northeastern Pennsylvania, said that CCCS has experience assisting military families.

"For returning vets or existing servicemen, handling their finances with little assistance can be trying," Lynott Lavelle said. "The stress these families have with underpaid wages and the possibility of deployment should not be carried alone. By meeting with a counselor, reviewing their finances, and availing themselves of any resource such as the Soldiers and Sailor's Relief Act, they are taking the steps towards some level of financial comfort and potentially, financial security."

Lynott Lavelle points out that her organization offers training and courses in such basic areas as budgets and planning. A little planning ahead can help student veterans concentrate on schooling and avoid the challenge of facing budget troubles after they develop.

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