Veterans Borrow for Private and Public Higher Education Despite GI Bill Benefits

Survey data shows those at public schools received 52% of veteran undergraduate student loan dollars

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Veterans Borrow for Private and Public Higher Education Despite GI Bill Benefits
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Many military veterans borrow to pay for college despite having access to the robust Post-9/11 GI Bill. Much of the current policy discussion about this student loan debt has focused on borrowing at for-profit schools, but just more than half of the total amount of loans taken out by prior-enlisted undergraduate veterans goes to those attending public institutions, according to a survey done for The Pew Charitable Trusts.

Although problems at for-profit institutions have grabbed headlines because of allegations that the schools defrauded borrowers or led some student veterans to unknowingly acquire student loan debt, the nationally representative survey of more than 3,180 veterans indicates that the issues are broader and more nuanced.

Data from the survey collected in late 2020 and early 2021 shows that the median loan amount borrowed was in fact higher at for-profit four-year schools than the other types of higher education institutions that undergraduate student veterans most commonly attend. But the survey also reveals significant levels of borrowing at public schools, a surprising finding given that the Post-9/11 GI Bill covers up to 100% of in-state tuition and fees at public schools for eligible veterans. It also can provide a housing allowance and assistance to pay for books and supplies.

Pew conducted the survey of post-9/11 veterans to examine the scope and scale of veterans’ borrowing and explore why so many are taking out student loans to pay for higher education. Key findings include:

  • 52% of the total amount of student loans was taken out by undergraduate veterans who attended either two-year or four-year public institutions. This analysis does not include officers since they already have undergraduate degrees when they serve.
  • The proportion of the undergraduate veterans who had at least one student loan was about the same at for-profit, nonprofit, and public four-year institutions—ranging between 17% and 19%.
  • The median loan amount borrowed over a four-year period was the highest at for-profit four-year institutions and varied greatly by institution type.

Most dollars covered costs at public institutions, reflecting attendance patterns

Although similar proportions of undergraduate veterans borrowed student loans across all three types of four-year institutions—public, for-profit, and nonprofit—the survey data reveals that a surprising amount flowed to veterans enrolled in public schools between 2016 and 2020 despite access to the GI Bill, as shown in Figure 1. Forty percent of loan dollars went to veterans at public four-year schools and 12% went to those attending public two-year schools—adding up to just over half (52%) of all student loan dollars borrowed.

Figure 1

52% of Total Amount of Undergraduate Veterans’ Student Loans Went to Those at Public Institutions

Total higher education borrowing by these veterans, 2016-20