What is Combat Pay and how does it affect your FAFSA? | Grantford Financial Aid Blog (2023)

Main image courtesy ofVeterinary Center.

Established with the intention of rewarding soldiers willing to take extra risk during World War II, the Combat Pay provides all members of the US Armed Forces with a stipend for their service in danger zones on top of their base pay. If you are a veteran or considering enlistment, combat pay can have a serious impact on financial support. Here's our guide on what combat pay is, how it can affect your chances of getting financial aid, and what you can do to fund your education.

What is the FAFSA and why do you need to fill it out?

The ins and outs of the FAFSA and the benefits of the degree

If you are a newbie to applying for financial aid, whether for a bachelor's degree or something similar, the first thing required to get the best possible support for your education is to complete theFAFSA.

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 savings, and the savings of other household members. If you choose to fill out the FAFSA, make sure you have tax forms and any other information about your household's situation on hand and able to type them in.

Once you have fully completed and submitted the FAFSA, it will be run through a program that takes into account all of the information you previously entered to generate your financial need and expected family contribution. The expected family contribution is the amount of money that the government expects your family (and possibly you) to pay for your education. Financial need is the amount that your expected family contribution will not cover in the cost of attendance, and this financial need amount will count toward the scholarships, loans, and work studies to which you are eligible.

The FAFSA is a crucial step for any student interested in receiving some type of financial aid before going to school. Additionally, the FAFSA must be renewed every year that you are in school, so always make sure to meet those deadlines. Although this varies from state to state, the deadline for first-time FAFSA applicants is usually noticeable1. Augustand1st Mayfor students renewing their application.

Completing the FAFSA accurately is essential -- mistakes can potentially cost you financial assistance such as scholarships, government student loans, and work-study opportunities that many students rely on to fund their college education.

Learning the ins and outs of FAFSA application doesn't have to be difficult. Grantford offers a variety ofeducational FAFSA resources, includinghelpful tips and tricksto get the most out of your FAFSA this year.

Was ist Combat Pay?

Combat Pay and Base Pay are different and must be reported differently when completing the FAFSA for school

battle wagesis a monthly stipend or fixed amount of money awarded to active duty members of the US Armed Forces serving in designated dangerous areas. Combat pay is commonly confused with base pay, which is the starting salary or wages paid to members of the armed forces for their service. Base pay does not include benefits or other accruals that are subsequently created, but is paid continuously for the duration of an individual's employment.

Battle pay is different from base pay because it isCompensation as a bonus for people in danger zones. Not all of those in the U.S. Armed Service earn combat pay, but all who receive combat pay are with the U.S. Armed Service busy.

The areasdesignated as danger zonestheSoldiers would receive combat wages for their serviceinclude Afghanistan, Jordan, Kyrgyzstan, Pakistan, Tajikistan, Uzbekistan, Philippines, Djibouti, Yemen, Somalia, Syria, Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, Kosovo, Adriatic Sea, Persian Gulf, Red Sea, Iraq, Kuwait, Saudi Arabia , Oman, Bahrain, Qatar and the United Arab Emirates. This list is subject to change over time and conditions in these areas may change, but these are the locations designated as 2021 combat zones.

This type of payment is granted to soldiers who find themselves in danger, including when they have been wounded in combat or have been exposed to enemy fire, mines, or other dangerous conditions. In 2021, combat pay was $225, which was on top of an individual's base pay.

Combat pay is added as federal taxable income, but Social Security and Medicare are still deducted from that pay. In addition, each state sets its own rules for taxing combat wagesBe sure to look up your state's rulesif you are drafted or planning a call-up.

How Combat Pay Affects Financial Assistance

Combat Pay could potentially negatively impact your financial support, but don't worry... There are many other ways to support

Although combat benefits are not federally taxable, they can still have a significant impact on your FAFSA and financial aid packages prepared by your FAFSA.Combat pay is considered part of your income and should be reported as such on your financial assistance application.

You can include your combat pay income in your FAFSAon worksheet Bof the application under untaxed income. If you want to find out how much you earned in combat wages during the grant year, you should refer to your W2 issued by the US Armed Forces for your work.

Your combat wages should not be included in your adjusted gross income, as it is not taxable. If you have specific questions about how you should report financial assistance, or if you have special circumstances, you can always contact your university to learn more about how they handle combat money when creating financial assistance packages.

If you have a parent who received combat wages, you should approach completing the FAFSA the same way if you are a dependent student. They should, of course, fill out their income in the Parents section of the application, and any student who received combat pay should report their income from it in the Student Finances section.

Other educational services for military personnel

Additional benefits as a military member and how it can help fund your education

Being in the military or having veteran status while attending school can offer some great financial opportunities, despite combat wages that aid packages may reduce. Being an active military member or a veteran can bring a variety of benefits in the form of student loans, scholarship opportunities and more.

We go over the key benefits of military training such as:

• Adjusted interest rates for service members
• Student Loan Deferral for Active Duty Members
• Scholarships for Veterans and Active Duty Military Members
• Additional support from your college or university

Military members receive lower interest rates on student loans

Under theServicemember Civil Relief Act, all students who took out a loan before entering military service are subject to interest rates that are 6% or less during their active military service. This law applies to both private and federal loans of all types and can significantly reduce interest accrued by military personnel over time.

Student loan repayment is deferred for active duty members

If you are on active duty, your loan repayments will be deferred for an extended period after you return from duty. This can be very helpful in paying off loans while military members adjust to life after active duty and reduces the likelihood of their loans defaulting.

Scholarships for veterans and active duty members

Veterans and active-duty military members also qualify for a pool of scholarships specifically designed for those serving in the armed forces. Through useour guide to scholarships, find scholarships specifically designed for veterans and enlisted military personnel.

There are scholarships for all types of military students including those in ROTC programs, Army, Navy, Air Force, Marines and Coast Guard. Be sure to check out these scholarship opportunities:

• Grantford Recycled Essay Stipendium.Scholarship essay writing is time consuming and boring, so we have come up with the easiest scholarship you will ever apply for. Simply submit an essay you have already written and your application for this $1,500 award is complete. You canApply for the scholarship here.
• AFAS General Henry H. Arnold Education Grant Program.Available to Air Force members and their dependents, this scholarship awards up to $4,000 to students who demonstrate financial need.Apply here.
• Anchor Scholarship Foundation Awards.The Anchor Foundation is available to Navy employees and their dependents and offers several scholarships to students of high academic achievement, character, extracurricular dedication, and financial need.Apply here.
• Legacy-Stipendien der Army Women’s Foundation.This $2,500, available to women soldiers and their families, can help help women soldiers meet their educational goals.Apply here.
• Additional grants for veterans and their families.These are just a few of the scholarships available to veterans, active duty members, and military families. For a broader look at grants—including industry-specific and state-specific programs—Click here.
  

By applying for scholarships tailored to this demographic, you increase your chances of being awarded a scholarship due to the smaller pool of applicants. Scholarships are a great way to fund your education through funds that do not require repayment, but they require significant effort to be successful.

Additional support from your college or university

Aside from credit and scholarship opportunities, universities have special benefits for their veterans or active duty military personnel. Check what opportunities your school has to offer, either on their website or by contacting the Financial Aid Office.

You don't have to choose between serving in your country and getting a degree — there are many financial aid opportunities available to military service members, and the first step to taking advantage of the opportunities that are available is to understand what they are and what they are are how they work.

If you are a veteran or plan to enlist, knowing what combat pay is and how it will factor into your financial support is a crucial first step in planning how to fund your college education. Hopefully, the tips, tricks, and resources included in this guide have given you a good start in understanding how military membership affects the financial assistance and resources available to you as an Active Member or Veteran Service Member.

Do you have further questions about benefits and military service? Our mailbox is always open. Let us know what you're trying to find out and we'll do our best to cover it in one of the next articles!