Main image courtesy of Vets HQ.
Established with the intention of rewarding soldiers willing to take an extra risk during World War II, combat pay provides a stipend to all members of the U.S. Armed Services for their service in hazardous zones in addition to their base pay. If you’re a veteran, or are thinking about enlisting, combat pay can make a serious impact on financial aid. Here’s our guide to what combat pay is, how it can impact your chances at receiving financial aid, and what you can do to help fund your education.
What is the FAFSA and Why You Need to Fill it Out
The ins and outs of the FAFSA and benefits of completing it
If you’re a newbie at applying for financial aid, whether for an undergraduate degree or something comparable, the first thing necessary in order to become eligible to receive the most amount of aid towards your education possible is filling out the FAFSA.
The FAFSA or Free Application for Federal Student Aid is an online form that requires information about your household members, their income, your income, and yours and other household members’ savings. When you plan to fill out the FAFSA, make sure to have tax forms and any other information about your household’s situation available and ready to type in.
Once you’ve completed the FAFSA fully and submitted it, it will be run through a program that considers all of the information you previously input to generate your amount of financial need and your expected family contribution. The expected family contribution is the amount of money that the government expects your family (and possibly you) to allot towards paying for your education. Financial need is the amount that your expected family contribution does not cover in the cost of attendance, and this financial need amount will be factored into the grants, loans, and work studies that you will become eligible for.
The FAFSA is a crucial step for every student who is interested in receiving any sort of financial aid to take before going to school. Additionally, the FAFSA must be renewed each year that you’re in school, so always make sure to stay on top of those deadlines. While it varies by state, the deadline for first-time FAFSA applicants typically falls on August 1st and May 1st for students who are renewing their application.
Completing the FAFSA accurately is essential -- mistakes can potentially cost you financial aid like grants, federal student loans, and work study opportunities that many students rely on to finance their college education.
Learning the ins and outs of the FAFSA application doesn’t have to be difficult. Grantford offers a variety of educational FAFSA resources, including helpful tips and tricks to get the most out of your FAFSA this year.
What is Combat Pay?
Combat Pay and Base Pay Are Different, and They Need to Be Reported Differently When You Fill Out the FAFSA For School
Combat pay is a monthly stipend, or a fixed sum of money, given to active members of each U.S. Armed Service who are serving in certain hazardous areas. Combat pay is commonly mixed up with base pay, which is the initial salary or wage paid to those in the Armed Services for their service. Base pay does not include benefits or any other additions created later on, but it is paid consistently over the period of time that a person is employed.
Combat pay differs from base pay because it is the compensation given as a bonus to those in hazardous zones. Not all those who are serving in the U.S. Armed Service are receiving combat pay, but all those who are receiving combat pay are employed by the U.S. Armed Service.
The areas designated as hazard zones that soldiers would receive combat pay for serving in include Afghanistan, Jordan, Kyrgyzstan, Pakistan, Tajikistan, Uzbekistan, Philippines, Djibouti, Yemen, Somalia, Syria, The Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, Kosovo, The Adriatic Sea, The Persian Gulf, The Red Sea, Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and the United Arab Emirates. This list is subject to change as time passes and conditions change in those areas, but those are the places designated as combat zones for 2021.
This type of pay is given to soldiers who are put in harm's way, including if they were wounded in combat or were subject to hostile fire, mines, or other dangerous conditions. In 2021, combat pay came to $225, which would be added on top of a person’s base pay.
Combat pay is added as taxable federal income, but Social Security and Medicare will still be taken out from that pay. Additionally, each state sets their own regulations about taxing combat pay, so be sure to look up your state’s rules if you are enlisted or are planning on enlisting.
How Combat Pay Affects Financial Aid
Combat Pay Could Potentially Have a Negative Impact on Your Financial Aid, But Don’t Worry… There Are Plenty of Other Support Options
While combat pay is not federally taxable, it can still make a significant impact on your FAFSA and financial aid packages that are produced from your FAFSA. Combat pay is considered a part of your income and should be denoted as such on your financial aid application.
You can include your income from combat pay on your FAFSA on worksheet B of the application under untaxed income. If you need to find out how much you earned in combat pay over the financial aid year, you should refer to your W2 issued by the U.S. Armed Services for your work.
Your combat pay should not be factored into your adjusted gross income, as it is not taxable. If you have specific questions about how you should report financial aid, or if you have special circumstances, always feel free to reach out to your university to learn more about how they approach combat pay when creating financial aid packages.
If you have a parent who received combat pay, they should approach filling out the FAFSA in the same way if you are a dependent student. They, of course, should fill out their income in the parent section of the application, and any student who received combat pay should designate their income from it in the student finances section.
Other Education Benefits for Military Personnel
Additional benefits from being a military member and how it can help fund your education
Being in the military or having the status of veteran while attending school can come with some great financial opportunities despite combat pay potentially reducing aid packages. Being an active member of the military or a veteran can come with a multitude of benefits in student loans, scholarship opportunities, and more.
We’ll be going over key military education benefits like:
- Adjusted interest rates for service members
- Student loan deferment for active duty service members
- Scholarships for veterans and active military members
- Additional support from your college or university
Military Members Get Lower Interest Rates on Student Loans
Under the Servicemember Civil Relief Act, all students who took out loans before entering the military are subject to interest rates that are 6% or less during their active military duty. This act applies to both private and federal loans of all types, and can greatly reduce the amount of interest accrued by military members over time.
Student Loan Repayment is Deferred for Active Duty Service Members
Additionally, if you are on active duty then the repayment of your loans will be deferred for an extended period after your return from duty. This can greatly help with loan repayment while military members readjust to life after active duty, and decreases the chances of their loans becoming delinquent.
Scholarships for Veterans and Active Duty Service Members
Veterans and active military members also qualify for an entire pool of scholarships specifically designated for those serving in the Armed Services. By using our guide to scholarships, you can find scholarships specifically intended for veterans and enlisted military members.
There are scholarships for all types of military students, including those in ROTC programs, the Army, Navy, Air Force, Marines, and Coast Guard. Be sure to check out these scholarship opportunities:
- Grantford Recycled Essay Scholarship. Writing scholarship essays is time-consuming and boring, so we designed the easiest scholarship you’ll ever apply for. Just send in an essay you’ve already written, and your application for this $1,500 award is done. You can apply for the scholarship here.
- AFAS General Henry H. Arnold Education Grant Program. Available to Air Force service members and their dependents, this grant awards up to $4,000 to students who demonstrate financial need. Apply here.
- Anchor Scholarship Foundation Awards. Available to Navy personnel and their dependents, the Anchor Foundation offers several scholarships to students who demonstrate high academic performance, character, extracurricular involvement, and financial need. Apply here.
- Army Women’s Foundation Legacy Scholarships. Available to women soldiers and their dependents, this $2,500 can play a role in helping female service members reach their educational goals. Apply here.
- Additional scholarships for veterans and their families. These are just a few of the scholarships available to veterans, active duty service members, and military families. For a more extensive look at scholarships -- including more branch-specific and state-specific programs -- click here.
By applying to scholarships tailored towards this population, you increase your chances of receiving one due to the smaller pool of applicants. Scholarships are a great way to fund your education through means that don’t require repayment, but they do require substantial effort in order to be successful at securing one.
Additional Support from Your College or University
Aside from loans and scholarship opportunities, universities have special benefits for their veteran or active military population. Check out what opportunities your school has to offer on either their website or by contacting their financial aid office.
You don’t have to choose between serving your country and getting a degree -- there are plenty of financial aid options available to military service members, and the first step to taking advantage of the opportunities that are out there is understanding what they are and how they work.
If you are a veteran or you’re planning to enlist, knowing what combat pay is and how it factors in into your financial aid is a crucial first step in planning how you’ll finance your higher education. Hopefully, the tips, tricks, and resources included in this guide have given you a good start to understanding how being a military member impacts financial aid and the resources available to you as an active duty or veteran service member.
Have other questions about financial aid and military service? Our inbox is always open. Let us know what you’re trying to find out, and we’ll do our best to cover it in an upcoming article!
