Student debt is increasing amongst all Americans¹, but on average, a veteran will take on more debt than a civilian student²—in spite of generous GI Bill benefits.


Veterans may get trapped with more student loan debt than the average American.

The primary contributors to veteran student loan debt are the same federal student loans that the average undergraduate takes out. In spite of GI Bill contributions, many vets either have to or choose to take out additional loans to pay for education-related fees or to put toward personal finances while in school. GI Bill benefits do not currently cover:

  • Out-of-state tuition at public universities.
  • Tuition fees at for-profit universities greater than $18,077.50 per year.
  • Unaccredited programs such as those found in vocational and technical colleges.

Is Federal Loan Debt Really All That Bad?

Federal loans come with low interest rates, which means debt in this category is typically more manageable. Plus, veterans now do not have to devote more than 10% of their income to debt repayment.³ While this may seem non-threatening at first glance, these policies may lead veterans to take on more debt than they otherwise would.

And, as you can imagine, the average veteran is at a more advanced stage of life than the vast majority of undergraduate students. The financial demands that come with housing, a spouse, and children lead many student veterans to take out federal loans to take the place of an income while the student is attending school. Unfortunately, it is due to these same responsibilities that debt can become crippling for veterans facing unemployment.

For-profit 4 year universities carry the most risk for student veterans. With notoriously high tuition fees and low job-placement rates, veterans may find that their investment in their education does not pay off.

The Department of Education reported to the LA Times, “Among veterans with benefits at two-year-schools, 31% at for-profits took out loans in the academic year ending in 2012, compared with 13% at public schools. At four-year schools, the rates were 37% at for-profits, 33% at public schools and 28% at private nonprofits.”

VSF’s Plan to Combat Veteran Debt

As a South Carolina nonprofit with the long term goal of reducing veteran unemployment in our state, our immediate goal is to establish VSF funds at all sixteen state community colleges in 2016. This will allow students to avoid going into debt in a few ways:

  • Scholarships cover everything related to program expenses, from books to tuition
  • Vets attend school for a shorter period of time, or on a part-time schedule
  • Jobs requiring vocational certification are increasing in the state of SC and across the nation, leading to shorter periods of unemployment
  • Funds go toward state-run programs, as opposed to what are essentially businesses in the education industry.

We’ve already seen such promising results amongst our scholarship recipients that we’re confidently moving forward with establishing new veteran scholarship funds in SC colleges.

If you know a veteran contemplating their educational options, share Veteran Scholarships Forever with them by directing them to our website where they can find out if a school near them offers scholarships from VSF.

We establish funds with the help of your generous donations. If you would like to contribute to the quality of a veteran’s life, click here to donate to VSF.


¹ “The biggest growth in the program came in the past decade, as student debt rose an average of 14 percent a year, to $966 billion in 2012 from $364 billion in 2004, according to New York Fed data.”

² The average amount borrowed per year amongst undergraduate college students is $4,840. The average amount borrowed per year amongst veterans is $7,400, which would equate to $29,600 worth of debt upon graduating from a four year university.