Posted Date:August 13, 2009
Author: David Bergeron, Acting Deputy Assistant Secretary for Policy, Planning, and Innovation, Office of Postsecondary Education
Subject: Guidance on Federal Veterans’ Education Benefits for Purposes of the Title IV Student Assistance Programs
On July 1, 2009, President Obama signed H.R. 1777 into law as Public Law 111-39, making technical corrections to the Higher Education Act (HEA). Among other things, H.R. 1777 updated the list of programs that meet the definition of “veterans’ education benefits” in section 480(c) of the HEA by including new programs and revising the statutory citations. Those programs are included in the attachment to this announcement. Note that section 480(c) includes, along with a listing of education benefit programs administered by the Department of Veterans Affairs (VA), certain ROTC programs that are administered by the Department of Defense (DOD).
In an electronic announcement posted on IFAP on July 2, 2009 we informed you that H.R. 1777 changed the effective date for the exclusion of Federal veterans’ education benefits, as defined in section 480(c) of the HEA, as estimated financial assistance (EFA) to July 1, 2009 (beginning with the 2009-2010 award year).
The following Questions and Answers (Q&A) provide additional information on the treatment of Federal veterans’ education benefits for purposes of the Title IV student assistance programs.
Q1: Is the required institutional matching contribution under the new VA “Yellow Ribbon Program”, considered Federal veterans’ education benefits, and therefore excluded from EFA? Or is only the amount of the VA Federal funds provided to the student considered to be Federal veterans’ education benefits and only that amount excluded from EFA?
A1: The Yellow Ribbon G.I. Education Enhancement Program (Yellow Ribbon Program) is a new program authorized by the Post-9/11 Veterans Educational Assistance Act of 2008 (Post-9/11 GI Bill), which added a new Chapter 33 to title 38 of the United States Code. Chapter 33 authorizes both a basic education benefit and the Yellow Ribbon Program. Under the Yellow Ribbon Program, an eligible institution may voluntarily enter into an agreement with the VA to jointly pay all or a part of the portion of the eligible veteran’s tuition and fees that exceeds the maximum amount otherwise provided under the basic Post-9/11 GI Bill benefit program. The VA matches, on a dollar-for-dollar basis, the amount contributed by the institution under the Yellow Ribbon Program.
Because the Yellow Ribbon Program provides veterans’ education benefits under chapter 33 of title 38 of the United States Code, all funds provided under this program, including funds provided by the institution as its contribution, are considered Federal veterans’ education benefits under section 480(c) of the HEA, and therefore both portions are excluded from EFA. However, only the Yellow Ribbon portion of the institutional award is excluded. For example, assume an institution’s tuition and fees for a veteran are $10,000 but the veteran will only be receiving $4,000 toward tuition and fees under the basic Post-9/11 GI Bill benefit program. Also assume that the VA and the institution entered into an agreement where the tuition and fee gap of $6,000 will be covered under the Yellow Ribbon Program. Thus, both the VA and the institution would each provide an additional $3,000 toward the veteran’s tuition and fees. Assume that the institution was using a $5,000 institutional scholarship to meet its Yellow Ribbon contribution for this student. Under this scenario, the full amount of the basic Post-9/11 GI Bill benefit program of $4,000 and the $3,000 contribution from the VA under the Yellow Ribbon Program would be excluded from EFA, as would the required $3,000 institutional contribution from the $5,000 scholarship. The remaining $2,000 of the $5,000 institutional scholarship must be considered EFA.
Q2: Does the exclusion from EFA of Federal veterans’ education benefits apply to all of the components of the assistance or to only to certain components? For example, does it apply only to amounts provided for subsistence or to only amounts provided for tuition and fees?
A2: Amended section 480(c) of the HEA includes the words “. . . benefits under the following provisions of law . . .”. Therefore, the exclusion from EFA applies to all of the benefits provided under the designated program. For example, all benefits provided under the Post-9/11 GI Bill are excluded regardless of whether the assistance was for tuition and fees, books and supplies, or as a monthly housing allowance.
Q3: Does the exclusion of Federal veterans’ education benefits from EFA apply where a veteran’s spouse or dependent is applying for Federal student aid and the spouse or dependent is receiving Federal veterans’ education benefits because of the status of the veteran?
A3: Any Federal veterans’ education benefits listed in section 480(c) of the HEA that are received by an aid applicant must be excluded from EFA even if the aid applicant is receiving those benefits as a spouse or dependent of a veteran.
Q4: Are the education benefits provided under the DOD’s Reserve Officers Training Corps (ROTC) considered Federal veterans’ education benefits and therefore not considered EFA even though they are not administered by the VA and are not provided to veterans?
A4: As noted earlier, the amended section 480(c) of the HEA includes, in addition to education benefit programs administered by the VA, two ROTC programs that are administered by the DOD. These are the scholarship benefits provided under the Senior Reserve Officers Training Corps (ROTC) in chapter 103 of title 10 of the United States Code and the subsistence allowance benefits provided under the ROTC in chapter 3 of title 37 of the United States Code. Therefore, education benefits from these two ROTC programs must be excluded as EFA even though they are not VA programs and the recipients are not veterans.
Q5: Are “tuition assistance” programs provided by the DOD (or the individual military services) Federal veterans’ education benefits and therefore not considered EFA?
A5: The only VA or DOD benefits that are to be excluded from EFA are those listed in section 480(c) of the HEA. Any benefits provided under any other program must be included as EFA in the calculation of the student’s eligibility for Title IV student assistance. For example, the Tuition Assistance Program of the Army Continuing Assistance System and the Army National Guard Federal Tuition Assistance Program are not programs included in section 480(c) of the HEA. Therefore benefits received under those programs must be included as EFA.
Q6: Since the law now removes as EFA all Federal veterans’ education benefits, may the institution exclude from the student’s cost of attendance (COA) the amount of those benefits that cover all or a portion of a specific component of the student’s COA? For example, may an institution exclude from the tuition and fees component of a student’s COA the amount paid by the VA for the veteran’s tuition and fees since it is not included as EFA?
A6: No.The institution may not exclude from the student’s COA, either generally or under the professional judgment provisions of the HEA, the amount of Federal veterans’ education benefits that cover all or a portion of a specific component of the veteran’s COA. The statutory exclusion from the definition of EFA of Federal veterans’ education benefits was done to remove consideration of those benefits in determining the student’s financial need. If the institution also excluded from the student’s COA the amount of Federal veterans’ education benefits that cover all or a portion of a specific component of his or her COA, the institution would be negating the purpose of the change made in the law.
Please note that this requirement for the treatment of Federal veterans’ education benefits with regard to COA is not to be confused with the recent statutory change to section 472(3)(C) of the HEA. Effective July 1, 2010, that provision requires that COA not include a housing allowance for aid applicants who live in housing located on a military base or for which a military housing allowance as provided under section 403(b) of title 37 of the United States Code – Pay and Allowances of the Uniformed Services.
Q7: Since these Federal veterans’ education benefits are no longer considered EFA, may they be included as income in the calculation of a student’s expected family contribution (EFC)?
A7: No. Federal veterans’ education benefits, as defined in section 480(c) of the HEA, have been and continue to be excluded from the calculation of a student’s EFC.
Q8: Do the words “including but not limited to” in section 480(c) of the HEA allow a school to exclude from EFA educational benefits received by a student from other programs not listed in section 480(c)?
A8: No. The statutory use of the words “including but not limited to” are intended to provide the Secretary with the flexibility needed in the event that (1) a new qualifying Federal veterans’ education benefit program is created or (2) the name or statutory citation of one of the currently listed programs is changed. As stated earlier, only benefits received under one of the programs specifically listed in section 480(c) of the HEA are to be excluded from EFA.
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