Maximizing your GI Bill Benefits with Community College and Graduate School

January 16, 2022May 18, 2022 ryan.renkey military

The proliferation of degrees means that the percentage of Americans with master’s degrees today matches the percentage of bachelor’s degrees in 1960. If you believe that the master’s is the new bachelor’s degree or intend for a career that requires a professional degree, then it’s worthwhile to think through how you might pay for your education.

It can be difficult to imagine planning for grad school when you haven’t even begun undergraduate studies, but if you have (or will have) the Post 9/11 GI Bill then you should consider how you will use your 36 months of benefits. Planning ahead could save you over $100k.

Quick PSA – Avoid spending $1200 on the Montgomery GI Bill unless you’re sure you need it.

Traditional 4-Year colleges are expensive. Grad school is even more.

College tuition has risen faster than the rate of inflation over the last several decades. This means that it is more expensive relative to other goods or services than in the past. These increased costs are part of the reason why student loan debt has increased so rapidly.

However, as expensive as undergraduate programs are, graduate programs are even more expensive. Tuition for post-graduate degrees in medicine, business, law, and engineering can easily reach into six figures. For example, the top business schools, public or private, can charge $70k annually on tuition alone. For a two-year program in business, you can expect to pay nearly $150k in tuition with total costs exceeding $200k.

The high cost of these programs makes it worthwhile to pay for community college out of pocket. Paying out of pocket for two years of inexpensive community college allows you to apply your benefits towards two years of expensive graduate programs.

Community College

Unlike 4-year colleges and graduate programs, community colleges remain quite affordable in several states. In 16 states the annual tuition for a full-time student is under $4,000 and California leads the way as the least expensive with an average in-state tuition of only $1,450. Not only does California have incredibly inexpensive community colleges, but they also have some of the best undergraduate universities.

I didn’t go to community college, but I was a transfer student. As a transfer student applicant, I learned there were programs to admit graduates of state community colleges to 4-year degree granting public schools in the state. Depending on the state rules, you might even be guaranteed admission to a state university if you meet the required GPA while enrolled at a community college. Such in-state transfers were quite common and many of the students I stood next to during my orientation at George Mason were transfer students from community colleges in Northern Virginia.

Transferring

After I completed orientation at George Mason, it didn’t matter whether we transferred in or were admitted as freshman. No one cared. Sure, you might run into some asshat who thinks they are better than community college transfers. If you do run into someone like that, ignore them. There won’t be any asterisk next to your name nor will employers care.

Fresh Start

When you transfer colleges, you begin with a clean academic slate. Any previous GPA will be irrelevant. When you go to place your cumulative grade for your degree on your resume, you’ll only include the cumulative GPA for credits earned at the degree granting institution. This is both an opportunity and a challenge. It’s an opportunity because you don’t need to be held back by a low grade from freshman year. It’s a challenge because there’s less margin for error.

As a transfer student who completed 60 credits before transferring, you’ll only have a single year’s worth of grades to use when you begin applying to full time positions. I took this as a tremendous opportunity to really nail my grades over the first year. I knew that doing well in the first year could really set me up for long term success. While I didn’t have poor grades prior to transferring, my grades during my first two years were nothing to write home about. The blank slate when I transferred to George Mason was a gift. No longer was I bound by the actions of my 18- or 19-year-old self. After a few years in the Army, I returned to school with the wisdom of a 24-year-old who had seen the world. 24-year-old and wisdom don’t often pair in the same sentence, but relative to both my younger self and my peers the difference was huge.

Even if you didn’t consider yourself a great student in high school compared to your classmates that went directly off to prestigious universities, you might be surprised at how much better you are a few years later.

Graduation

Congratulations! You’ve made it this far and that’s a big milestone. If you’ve been following along thus far then you’ve completed an enlistment with the military, managed to pay your way through a bachelor’s degree without any debt, and still have two years of remaining GI Bill benefits. That’s a tremendous accomplishment!

What comes next?

If you chose to apply for medical school or a top law program to get into big law, then you’re about to be thanking your younger self. These programs last four and three years respectively and you might have just saved yourself $100k if not more!

For those going directly into the workforce, your time will come. Unless you have a requirement such as credit hours for a CPA or going into one of the programs mentioned above, there is NO NEED to jump directly into a graduate degree. This is especially true for MBA programs. You’ll be a more competitive applicant if you and work for a few years before considering a master’s in business. Your experience will help you understand what you like and don’t like in civilian employment. You’ll have a better idea of what you want to do and how a master’s degree might help you achieve your goals. Additionally, you’ll be better positioned to learn more and contribute more to the classroom. Even though you won’t be coming straight from the military, your military service will still be valued by business schools. Once you have a few years of experience, don’t be afraid to aim for the top programs.

Another reason to jump into the job market

Some vets might have been in a position where they were able to create emergency savings during their time in the military. This might not apply to you and that’s fine, but if you are in a financially advantageous position coming out of college, use it. Using the combination of a VA loan and accumulated savings from a few years of full-time income, a veteran could get a house quickly after graduation. This is a powerful benefit that you’ve already earned. If you plan to stay in the same city for the next five years, have your emergency savings in place, and have a strong job offer you might be able to get into a house within a year of graduating.

This is exactly what I was able to do coming out of undergrad. I worked for a year, got a raise, and re-signed my lease. I already had plenty of savings from my deployment and managed to save enough to cover closing costs for a home purchase. However, I quickly realized that I made a mistake by re-signing the lease and not considering homeownership. I should have already been looking at a home given how low home prices were in 2018 in Madison, WI. It was definitely more work and stress to get a subletter in place for the second half of the lease but the decision to get into the housing market is something I don’t regret!

Can I get a visual?

Hopefully I’ve convinced you by now why community college could be a good financial move if you’re leaving active duty without a college degree or enough credits to transfer. For all of us visual learners out there, let’s take a look at the breakdown of education expenses looks like for the 10 years after you separate from service. We’ll ignore any housing allowance payouts. Regardless of when the benefits are used, we know that we’ll have four years of housing benefits.

Community College > Transfer to 4-Year University > Work 4 years > Enroll in Graduate Program

Year	1	2	3	4	5	6	7	8	9	10
CA	(1,450)	(1,450)	0	0	0	0	0	0	0	0
NC	(2,500)	(2,500)	0	0	0	0	0	0	0	0
VA	(4,000)	(4,000)	0	0	0	0	0	0	0	0

4-Year University > Work 4 years > Enroll in Graduate Program

Year	1	2	3	4	5	6	7	8	9	10
CA	0	0	0	0	0	0	0	0	(65,000)	(65,000)
NC	0	0	0	0	0	0	0	0	(65,000)	(65,000)
VA	0	0	0	0	0	0	0	0	(65,000)	(65,000)

Depending on how expensive community college is, you could save anywhere from $122k-$127k. Even in the most expensive states that charge close to $10k for community college tuition, you’ll still likely save over $100k.

Other Ideas

Use the tuition assistance program while on active duty to take part time college classes. This can be an option for someone who is noy deployed. It’s certainly worthwhile if you remain stateside for your deployment, just don’t feel you need to try to do this if you are truly in a disadvantaged position. Value: Tuition savings of $3k-$15k plus two years wages worth $120k
Join the active reserves or national guard. Joining can provide tuition assistance, healthcare benefits, and some spending money. A big point to consider will be whether you are working full time in a civilian job and enrolled part time or whether you’re working part time. While I encourage others to work rather than take out loans for living costs, the top priority should always be your education. Education has been the biggest factor in accelerating my journey to FIRE and has been hugely impactful in other people’s journeys as well. Value: Tuition savings of $3k-$15k
Use the GI Bill Comparison Tool from the VA if you’re choosing between two or more schools that you’ve been accepted to. This tool will show what your benefits will be so you can make better informed financial decisions.

Should I load up on credits to make my benefits go further?

Probably not. A full-time undergrad schedule is 15 credits per semester. Adding an additional class will increase your total course load to 18 credits which is a manageable amount. The downside is that an increase from 15 to 18 credits over the course of a 120 credit degree will only move up your graduation date by one semester. In a best-case scenario this means you could graduate about five months earlier than otherwise. This earlier graduation might not help you if you’re waiting on a law program to start or if the company you interviewed for is looking for a summer start date.

It is technically possible to graduate in three years by taking 21 credits per semester. However, this is a ton of work and the timelines with a transfer from community college likely wouldn’t pair well together. Setting yourself up for future success is the primary goal, so it’s not worth jeopardizing your future to possibly have one extra semester of GI Bill benefits.