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How to Use GI Bill Education Benefits for Online Classes

GI Bill education benefits can be used for online classes or an entire online degreeVeterans education benefits allow eligible military personnel to earn a degree online at very low-cost. Some vets can even earn a free degree by taking accredited online courses.

However, not all veterans education benefits are equal. Benefits vary, depending on where veterans live, and where they choose to attend school.  Special rules apply to distance learning programs as opposed to campus degrees.

Some veterans may be better off using the old Montgomery GI Bill (MGI bill), while others may receive more benefits using the newer, Post-9/11 GI Bill, which went into effect in 2009.

Here are 5 keys to understanding and using your military distance education benefits wisely. Use this checklist and you may be able to earn an online degree without paying a penny.

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You are covered by the post 9/11 GI Bill if:

  • You are a veteran who served at least 90 days of active-duty service after Sept. 10, 2001 and you received an honorable discharge. (Note: For full benefits, you need to have three years of service after Sept 10, 2001. Those who served less time will receive a smaller percentage of benefits, depending on time served.)
  • You are a vet who served at least 30 days of post 9/11 active-duty service—and were discharged due to a service-related disability. (You will qualify for full benefits.)
  • You are in the National Guard member (benefits for National Guard members became effective Aug. 1, 2009, with payment beginning Oct. 1, 2011).

Some vets are eligible for both the MGI Bill and the Post-9/11 GI Bill. If you fall into that category, you may be able to combine benefits from both bills. For example, if you used up your 36 months of MGI veterans education benefits, you may qualify for another 12 months of benefits under the Post-9/11 Bill.

Because it is relatively new, the Post-9/11 Gi Bill continues to be amended, with new provisions going into effect at different times in 2011.

Given its complexity and ongoing changes, it’s best to double-check with the Veterans Administration before making any commitments—and then double-check again later, to make sure the VA hasn’t changed its rules.

The best way to do this:

  • Call the VA tollfree at 1-888-GIBILL-1 (888-442-4551)
  • Visit the VA’s GI Bill website at:

3. The Post-9/11 GI Bill v. the MGI Bill

The Post-9/11 GI Bill took away some benefits covered under the MGI Bill. However, many of these benefits are set to be restored on Oct. 1, 2011.

Until then, however, keep in mind that under the Post-9/11 Bill:

Training and apprenticeships are NOT covered.

The Post-9/11 GI Bill covers only colleges (both two-year and four-year) and universities, whether they are fully online or traditional, campus-based schools. It will NOT cover:

  • Training that won’t result in a college degree—such as HVAC certification, truck driving, EMT certification, barber or beautician school, or flight training;
  • Apprenticeships or on-the-job training programs, such as plumbing, hotel management, or firefighting;
  • Certificate programs that aren’t provided by a college or university

Training and apprenticeship programs WILL be covered starting Oct. 1, 2011.

Until then, if your online learning plan includes the above types of programs, you may be better off using the MGI Bill and not the Post-9/11 GI Bill.

Note: Reimbursement for flight training programs is changing, effective Oct. 1, 2011. The VA will pay the net costs for in-state tuition and fees or $10,000, whichever is less. Given that many flight-training programs carry hefty fees, you will need to carefully assess your school’s charges.

Students going to school 100 percent online will NOT receive a housing allowance.

Until the rules change on Oct. 1, 2011, vets who attend distance school full-time are cut off from a significant source of monthly income.

The Post-9/11 GI Bill pays colleges directly—with no money sent to students for tuition and fees. It does give a monthly housing allowance to full-time students, however: a check sent directly to the student to cover housing costs. The amount varies depending on the student’s zip code, and can range from about $800 per month to more than $2,500 per month.

The Post-9/11 GI Bill does NOT currently give this housing allowance to distance education students. Congress amended the bill to allow such payments (equal to one-half the national average for an E-5 ranked service member with dependents — up to $673.50). However, these payments do not go into effect until Oct. 1, 2011.

Before then, the student might be better off with the MGI Bill.

There is a loophole in the current Post-9/11 GI Bill: If you attend just one “on ground” course, you qualify for the housing allowance.

Louis Martini, director of military education at Thomas Edison State College in New Jersey, says online students can find a college near where they live and sign up for a class with at least one credit, such as a gym class. As long as they take at least one residential class along with their online studies, they are eligible for the housing allowance.

When Congress passed the Post-9/11 GI Bill in 2009, its intent was to pay the full cost of a four-year, public school degree—a step up from the MGI Bill, which primarily has been used by vets to cover community college (two-year degrees).

To achieve this, the Post-9/11 GI Bill promised to pay for the most expensive public university undergraduate degree (including tuition and fees) in each state. Those veterans who choose to attend private schools can apply the most expensive public degree cost toward any college they choose to attend.

The VA calculated maximum public tuition and fees per state (here is the 2010/11 chart). However, reimbursement amounts vary widely, depending on geography.

Two states charge less than $100 per credit hour (Wyoming charges $99.80, while South Dakota charges $99.80). Other states charge more than $1,000 per credit hour—Texas, for instance, bills $1,549.00.

Fee amounts also vary dramatically: from $310 per term (usually, this means per semester) in Washington, D.C. to a whopping $85,255 per term in Utah.

These ranges are due to the differing subsidies states provide to schools and also to specialty programs available in some states (such as aviation) that have higher fees.

Recognizing the inequity of this system, Congress simplified the reimbursement plan beginning Aug. 1, 2011.

Under this plan, the VA will pay all public school in-state tuition and fees, but will cap private and foreign school costs at $17,500 annually (or $70,000 for a four-year degree). This applies to both veterans and active-duty service members and to their transferees (children, spouses or other eligible dependents).

So, what does this mean for you?

Depending where and when you want to go to school, these differences could mean that you can afford a private-school education—or that even a public education will leave you owing money (in these cases, the Montgomery Bill will be a better bet).

Some examples:


You are interested in an online bachelor’s degree in psychology. You are considering Drexel University, a private, not-for-profit distance school with its online campus based in Pennsylvania, which charges $112,840 for this four-year degree.

Prior to Aug. 1, 2011, the VA will reimburse Drexel $112,080 in tuition ($934 per credit hour), plus fees up to $6,1110 annually. Your bill, then, would be paid in full.

After Aug. 1, 2011, the VA will reimburse Drexel only $70,000, leaving you owing $42,840.

If you go to Drexel after Aug. 1, you could have all or part of your balance covered by using VA’s Yellow Ribbon Program. With this program, participating schools (such as Drexel) agree to pay a portion of the difference between what they charge and what the GI Bill covers. The government will match what the school chooses to pay.

Always check with your preferred school to determine if it is part of the Yellow Ribbon Program. This one factor can make a big difference in your out-of-pocket costs.

Keep in mind that you will have living costs while attending an online school that are not covered under the Post-9/11 GI Bill. If you need a living stipend, you might be better off using the Montgomery GI Bill, which pays a maximum benefit of $1,426 for 36 months, or $51,336, sent directly to you to use for tuition, rent, and other expenses.

This amount of money will not fully cover tuition charged by the most expensive schools, such as the University of Phoenix and other for-profit, private schools.’s surveys have revealed that online degrees offered by public colleges cost, on average, up to half as much as the very same degrees offered by for-profit universities.

For the most affordable education, consider a nonprofit, public university.’s ranking lists of affordable online degrees have revealed that public, non-profit universities almost always deliver the least expensive education for online students.


If you live in North Carolina, you can get your online bachelor’s in business administration from East Carolina University for a total of $11,880 over four years.

The Post-9/11 GI Bill will easily cover this tuition amount—but, as an online student, you will not get housing fees paid until Oct. 1. In this case, you might be better off using your Montgomery Bill benefits to cover tuition as well as your housing and other living expenses—at least until the new GI Bill policy goes into effect.

Note: If you don’t live in North Carolina, the price quadruples, to $54,480. Always check in-state versus out-of-state tuition rates when evaluating schools, as there often is a hefty difference.

The Post-9/11 GI bill tuition benefit for North Carolina schools is $72,796 ($606.63 per credit hour), easily covering both out-of-staters and residents.


Graduate study is covered by the Post-9/11 GI Bill, but the VA uses undergraduate tuition to set rates. If your online graduate program charges more than an undergraduate program, you will wind up owing money—even if you attend a nonprofit, public school.

The University of South Carolina-Columbia charges out-of-state residents $1,085 per credit for an online master’s in civil engineering. In-state residents are charged $589 per credit. (Total degree cost: $32,550 for out-of-staters, $17,670 for residents).

The GI BIll’s reimbursement rate in South Carolina is $829 per credit hour, or $24,870 for a 30-hour degree. The VA also allows up to $2,798 annually for fees ($5,596 maximum for two years). If you are an out-of-state student, you might wind up owing as much as $7,680 or as little as $2,084 (depending how fees are calculated for this online master’s degree).

This is another situation where the Montgomery GI Bill will serve you better, since its maximum benefit of $51,336 will cover this distance graduate degree whether you are an out-of-state or in-state resident.

Most service members will have to choose one GI Bill or the other. However, you may be able to use both the Post-9/11 GI Bill and the Montgomery GI Bill, depending on your veteran status and how much you have earned in veterans’ benefits.

For example, you could use the new GI Bill for a college degree. Then, assuming you have benefits left on your Montgomery GI Bill, you can apply these to pay for an apprenticeship or training program.

If you think this applies to you, talk to a VA benefits counselor by calling the VA at 888-442-4551.

Bottom Line

  • Calculate how much each online college costs before you enroll; make sure you have a clear statement of all tuition and fees before signing with any college
  • Compare the tuition and fees your school charges with VA reimbursement rates before signing—you may pay significantly more for a school in one state versus another
  • Consider whether your preferred university charges differently for residents and non-residents (you may be better off picking a school within the state where you live)
  • Check to see that your chosen online school is part of the Yellow Ribbon Program. If so, calculate the difference this will make in your out-of-pocket college costs

One easy way to find out how much online schools cost is to search’s online degree database. You can search this online college directory by state, or subject, or by specific school name. Every college profile in the directory reveals the total cost— tuition and fees—charged for each distance learning degree.

Consult any of’s Best Buy ranking lists to find the least expensive online degrees nationwide.

The military may continue to make changes in its tuition and reimbursement programs. If you monitor your veterans education benefits wisely, you can earn a 100 percent free online degree.

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Financial Aid and Scholarships for the Military

Capella University Military Tuition Discount
Western Governors University Online Military Scholarships