FAFSA for Military: Financial Aid, Dependency Status & Maximizing College Money
Bottom Line Up Front: Military members file FAFSA as independent students (even if young) = more financial aid eligibility. GI Bill + FAFSA = stack benefits (use both). FAFSA income: Include BAH, BAS, bonuses (but combat pay excluded). Filing deadline: October 1 annually for next academic year. Expected Family Contribution (EFC): Lower = more aid. Pell Grant: $0-$7,395/year free money (doesn't reduce GI Bill). Military dependents: File as dependent until age 24 OR independent if married/have kids. CSS Profile required for some private schools (asks more detailed questions). Apply even if using GI Bill - you may get additional grants/scholarships.
FAFSA Basics for Military
What Is FAFSA?
Free Application for Federal Student Aid:
- Application for college financial aid
- Required for: Pell Grants, student loans, work-study, most scholarships
- Free to file (never pay someone to fill out FAFSA)
- Determines Expected Family Contribution (EFC) - how much family can pay
Types of aid FAFSA unlocks:
- Pell Grant: $0-$7,395/year (free money, based on income)
- Subsidized loans: $3,500-$5,500/year (government pays interest while in school)
- Unsubsidized loans: $5,500-$12,500/year (you pay all interest)
- Work-study: Part-time job on campus
- State grants: Varies by state
- School scholarships: Many require FAFSA
Why Military Members Should File FAFSA
Even if using GI Bill:
- Pell Grant doesn't reduce GI Bill (stack both!)
- State grants available
- School scholarships often require FAFSA
- Work-study option (earn extra money)
You're independent = more aid:
- Independent students get more aid than dependent
- Lower parent income doesn't count against you
Military Dependency Status (Critical)
Active Duty = Automatic Independent Student
If you're active duty military:
- ✅ File as independent (regardless of age)
- ✅ Don't report parent income
- ✅ Only report YOUR income (+ spouse if married)
Why it matters:
- Independent students eligible for more aid
- Parent income often too high (would disqualify from aid)
Proof required:
- Copy of military ID
- Statement of service (from personnel office)
Veterans = Independent
If you're a veteran:
- ✅ Independent student status
- ✅ Don't report parent income
Veteran definition (for FAFSA):
- Served on active duty
- Released under conditions other than dishonorable
Note: Even 19-year-old veteran = independent (age doesn't matter)
Military Dependents (Spouse, Kids)
Dependent of active duty member:
- File as dependent student (report parent/sponsor income) UNLESS:
- Age 24+
- Married
- Have own kids
- Veteran themselves
Exception - Emancipated Minor:
- Some military kids are legally emancipated (rare)
- File as independent if legally emancipated
Income Reporting for Military
What Military Income to Report
Include on FAFSA:
- ✅ Base pay
- ✅ BAH (housing allowance)
- ✅ BAS (food allowance)
- ✅ Bonuses (re-enlistment, special pay)
- ✅ Hazard pay
- ✅ Sea pay, flight pay
Exclude from FAFSA:
- ❌ Combat zone pay (tax-free combat pay NOT reported)
- ❌ VA disability compensation (non-taxable)
Where to find income:
- W-2 (Box 1 = taxable income)
- LES (Leave and Earnings Statement)
- Tax return (AGI - Adjusted Gross Income)
Example (E-5 with dependents):
- Base pay: $45,000
- BAH: $30,000
- BAS: $5,000
- Combat pay: $10,000 (6-month deployment)
- Report on FAFSA: $80,000 (combat pay excluded)
Assets to Report
Report:
- Savings/checking accounts (as of filing date)
- Investments (stocks, bonds, mutual funds)
- Real estate (not primary home)
- Business value
Don't report:
- Primary home value
- Retirement accounts (TSP, IRA, 401k)
- Life insurance cash value
- Cars
Impact:
- Assets reduce aid (but less than income)
- Parents' assets (if dependent student): 5.64% counted toward EFC
- Student assets: 20% counted toward EFC
Strategy:
- Pay down debt before filing (reduces assets on paper)
- Don't keep large cash in student's name (if dependent)
FAFSA + GI Bill (Stacking Benefits)
Can You Use Both?
YES - stack them:
- GI Bill pays tuition, housing (MHA), books
- Pell Grant = extra free money (doesn't reduce GI Bill)
- Total: GI Bill + Pell Grant = $7,395/year more
Example:
- Tuition: $10,000 (GI Bill pays)
- MHA: $2,000/month (GI Bill)
- Pell Grant: $7,395/year (FAFSA)
- Total benefit: $10,000 + $24,000 + $7,395 = $41,395
Pell Grant Eligibility
Income limits (approximate):
- EFC = 0 (maximum Pell): Income ~$30,000 or less
- Partial Pell: Income $30,000-$60,000
- No Pell: Income >$60,000 (varies by family size)
Active duty E-5:
- Income: $70,000 (base + BAH + BAS)
- Likely: No Pell (income too high)
Veteran (using GI Bill, not working):
- Income: $0 (GI Bill MHA not counted as income!)
- Likely: Maximum Pell ($7,395/year)
Why this matters:
- Veterans get Pell even while getting GI Bill (because MHA ≠ income for FAFSA)
How to File FAFSA (Step-by-Step)
Step 1: Create FSA ID (Do This First)
What it is:
- Username + password for FAFSA
- Digital signature (legally binding)
Who needs one:
- Student
- One parent (if dependent student)
Create at: StudentAid.gov/fsa-id
Keep it safe: You'll use same FSA ID all 4 years
Step 2: Gather Documents
Need:
- Social Security Number
- Driver's license
- Tax return (prior-prior year - see below)
- W-2
- Bank statements (as of filing date)
- Investment statements
- Military ID (for independent status)
Prior-Prior Year:
- Filing for 2025-2026 school year?
- Use 2023 tax return (two years prior)
- Already filed = easy
Step 3: File FAFSA Online
Go to: FAFSA.gov
Fill out:
- Personal info (name, SSN, DOB)
- School selection (add 10 schools - they all get your FAFSA)
- Dependency status (answer questions → determines independent vs. dependent)
- Income (from tax return)
- Assets (bank accounts, investments)
Sign: Use FSA ID (digital signature)
Submit: Takes 30-60 minutes
Step 4: Review SAR (Student Aid Report)
Within 3-5 days:
- Receive SAR via email
- Review for errors
- Note your EFC (Expected Family Contribution)
EFC examples:
- EFC = 0: Maximum aid (Pell Grant, subsidized loans)
- EFC = 10,000: Some aid (partial Pell, loans)
- EFC = 30,000: Little aid (maybe unsubsidized loans only)
Step 5: Wait for School Financial Aid Offers
Timeline:
- File FAFSA: October-January
- Schools send aid offers: March-April
- Accept/decline: By May 1 (typically)
Compare offers:
- School A: $10,000 grants + $5,000 loans
- School B: $15,000 grants + $3,000 loans
- School B = better (more grants, less debt)
FAFSA Deadlines
Federal Deadline
Opens: October 1 (for next academic year)
Example:
- October 1, 2024: File for 2025-2026 school year
No federal deadline (but earlier = better)
State Deadlines (CRITICAL)
Vary by state:
- California: March 2
- Illinois: As soon as possible after October 1
- Texas: January 15
Why it matters:
- State grants = first-come, first-served
- Miss deadline = lose state grant money
Check your state: Google "[State] FAFSA deadline"
School Deadlines
Each school sets own deadline:
- Often February-March
- Priority deadline (file by this date for most aid)
Check each school's website
Common FAFSA Mistakes (Military)
❌ Mistake #1: Not Filing Because "I Make Too Much"
Reality:
- "I make $80K, I won't get aid"
- Doesn't file FAFSA
- Misses: Scholarships requiring FAFSA, unsubsidized loans (if needed)
Fix: File anyway (takes 30-60 min, might qualify for something)
❌ Mistake #2: Not Filing Because "I Have GI Bill"
Reality:
- Uses GI Bill, doesn't file FAFSA
- Misses: Pell Grant ($7,395/year free), state grants, scholarships
Fix: File FAFSA even with GI Bill (stack benefits!)
❌ Mistake #3: Reporting Combat Pay
Reality:
- Reports combat pay as income
- Income looks higher than it is
- Disqualified from aid unnecessarily
Fix: Exclude combat zone pay (it's tax-free, don't report on FAFSA)
❌ Mistake #4: Reporting VA Disability as Income
Reality:
- Gets VA disability ($2,000/month)
- Reports on FAFSA as income
- Reduces aid eligibility
Fix: VA disability = NOT income for FAFSA (don't report)
❌ Mistake #5: Filing as Dependent (When Active Duty)
Reality:
- Active duty E-3, age 20
- Files as dependent (reports parent income $150K)
- Gets $0 aid
Fix: Active duty = automatic independent (don't report parent income)
CSS Profile (For Private Schools)
What Is CSS Profile?
College Scholarship Service Profile:
- Additional financial aid application
- Required by ~200 private colleges
- MORE detailed than FAFSA
- Costs $25 + $16 per school
Who uses it:
- Private schools (Harvard, Stanford, etc.)
- Some state schools
Differences from FAFSA:
- Asks about home equity (FAFSA doesn't)
- Asks about retirement accounts (FAFSA doesn't)
- Asks about non-custodial parent income (divorced families)
Should Military File CSS Profile?
File if:
- Applying to schools that require it (check school's website)
Don't file if:
- Only applying to public schools (usually don't require)
Cost: $25 + $16 per school = $57-$100+ total
Action Steps
This Fall (October-December):
- ✅ Create FSA ID (StudentAid.gov/fsa-id)
- ✅ Gather documents (tax return, W-2, bank statements)
- ✅ File FAFSA (FAFSA.gov) - file EARLY (October-December)
After Filing:
- ✅ Review SAR (check for errors)
- ✅ Check state deadline (file state grant apps if separate)
- ✅ File CSS Profile (if required by schools)
Spring (March-May):
- ✅ Compare financial aid offers
- ✅ Accept aid (grants first, loans only if needed)
- ✅ Decline aid you don't need
Every Year:
- ✅ Refile FAFSA (required annually)
- ✅ Update income/assets (changes each year)
Related Guides
Remember: File FAFSA even if using GI Bill (stack benefits = Pell Grant + GI Bill). Military = automatic independent student (more aid eligibility). Include BAH/BAS in income, exclude combat pay and VA disability. File early (October-December) for best aid. Takes 30-60 minutes. Free money available (Pell Grant $0-$7,395/year). Don't leave money on the table. File every year.