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VA Solicits Participation in Yellow Ribbon Program

March 24, 2011

The Department of Veterans Affairs (VA) is currently accepting Yellow Ribbon program agreements from interested schools for the 2011-12 academic year. The Yellow Ribbon program allows the VA to match institutional contributions to cover the gap when tuition and fees for academic programs exceed the maximum benefit under the Post-9/11 Veterans Educational Assistance Act. Amendments to the law enacted in January made significant changes to the tuition and fees benefits for veterans under the Chapter 33 program. Most of the changes are scheduled to take effect on August 1. Institutions will need to consider these changes in determining their commitments to the Yellow Ribbon program.

The Post-9/11 Veterans Educational Assistance Improvements Act of 2010 sets a nationwide cap of $17,500 for tuition and fees benefits for veterans attending independent and foreign institutions. The Yellow Ribbon program can be used for tuition and fees above that amount. All in-state charges for tuition and fees for public institutions would be covered. For out-of-state veterans, the difference between the in-state and out-of-state tuition and fees would be eligible for VA matching if the institution participated in the Yellow Ribbon Program and the veteran were eligible.

The amendments eliminate the state-to-state discrepancies in coverage of tuition and fees created by the original Post-9/11 GI Bill. Under existing rules, the maximum benefit was calculated based on the highest in-state undergraduate tuition and fees charged by a public institution in each state. With the new nationwide cap of $17,500, many veterans will be eligible for greater support. However, those attending institutions in states that had previously benefited from higher tuition and fee rates will see a decrease in the maximum benefit from the VA. Colleges and universities in those states, which may not have participated in the Yellow Ribbon program in the past because tuition and fees for their student veterans were fully covered by the base benefit, will need to reconsider.

VA regulations have not yet been updated to incorporate changes necessitated by the amendments, so there is still some uncertainty about how the new limits will be implemented, particularly in relation to timing of payments and the “net charges” provision. An FAQ posted by the VA explains that, for students at independent institutions, “the cap of $17,500 will be applied until it is exhausted,” suggesting that the funds available to cover tuition and fees for a year will not be spread evenly over two or more terms in an academic year. This would mean that Yellow Ribbon program utilization is likely to be uneven as well.

Last year over 1,100 institutions participated in the Yellow Ribbon Program. To participate in the coming year, institutions must submit their signed agreements by May 23. The VA’s Yellow Ribbon Program website has the agreement document, a checklist, and a helpful FAQ document. While institutions should begin considering their options and determining whether and how to participate in the Yellow Ribbon program for next year, it may be advisable to wait until closer to the May 23 deadline to submit the agreement to VA. Further guidance on how the changes to the law will be implemented may be provided by VA in the interim and have bearing on the Yellow Ribbon program.

Contact

Anne Gross
Vice President, Regulatory Affairs
202.861.2544
E-mail

Bryan Dickson
Policy Analyst
202.861.2505
E-mail