The U.S. Department of Veterans Affairs (VA) was established as a Cabinet-level agency in 1989, more than 300 years after Colonists first began taking care of American soldiers. The VA is the federal government’s second-largest department (after the Department of Defense), with a budget of approximately $90 billion per year.
The VA administers an extensive federal military benefits system, employing nearly 280,000 people in state and local offices across the country. Their charge is to provide services for veterans, their families and their survivors.
Federal Benefits and Eligibility
Eligibility for most VA benefits is based upon honorable discharge from active military service. Active service means full-time service as a member of the Army, Navy, Air Force, Marine Corps, Coast Guard, or as a commissioned officer of the Public Health Service, Environmental Science Services Administration or National Oceanic and Atmospheric Administration. Certain VA benefits require service during wartime.
The federal benefits provided to these veterans include:
- Health care: The VA operates the nation’s largest integrated health care system with more than 1,400 sites, including hospitals, outpatient clinics, counseling centers, nursing homes and other medical facilities.
- Unemployment benefits: Veterans unable to find work immediately after serving in the armed forces may be eligible for veteran unemployment compensation.
- Disability compensation: Disability compensation is a monetary, tax-free benefit paid to veterans who are disabled by a service-connected injury or illness.
- VA pensions: Veterans with low incomes who are either permanently or totally disabled, or 65 or older, may be eligible for monetary support if they have 90 days or more of active military service — at least one day of which was during a period of war.
- Education and training: Under the GI BIll, participants are entitled to receive a percentage of the cost of tuition and fees at an institution of higher education; a housing allowance; a stipend for books and supplies; and other education benefits. The Dependents’ Educational Assistance (DEA) program is available for veterans’ dependents and survivors. These individuals can receive similar benefits to help finance their educations. Another program, the Reserve Education Assistance Program (REAP), serves members of the Reserve armed forces. Individuals who spend two or more years on active duty are eligible for monthly stipends upward of $1,000 for education.
- Home loan guaranty: VA home loan guaranties help eligible service members, veterans, reservists and surviving spouses obtain homes, condominiums, residential cooperative housing units and manufactured homes, and refinance loans. Assistance is also available for veterans who have defaulted on their mortgages.
- VA life insurance: The VA offers life insurance plans that cover active-duty members of the Armed Forces and veterans.
- Financial counseling: Veterans and their families can get advice on tackling their debt and other financial issues.
- Burial and memorial benefits: Veterans, service members and their spouses and dependent children are eligible for VA burial and memorial benefits. Those benefits include a headstone for a gravesite. Family members can be reimbursed for any funeral costs if the death was service-related.
- Death benefits: The Dependency and Indemnity Compensation (DIC) program provides monthly financial help to surviving families of service members and veterans who died as a result of active duty or training. If the service member served during a period of war but did not die while serving, assistance is also available for the family.
In addition, every state — and several U.S. territories — has a Veterans Affairs Office. Collectively, state governments spend approximately $4 billion per year on veterans’ programs.
State benefits may include:
- Educational grants and scholarships
- Exemptions or discounts on fees, licenses and taxes
- Home loan and refinancing programs
- Employment assistance, job training and vocational rehabilitation
- Prescription drug coverage
- Long-term care
- Small-business loans
- Death benefits
- Free admission to state parks and/or use of state facilities
- Mental health services
- Legal assistance
Since programs and benefits vary from state to state, it is important to contact the nearest state Veterans Affairs office for specific information. The federal Department of Veterans Affairs website has links to the state offices.
Each service branch has its own aid society, or official charity, set up as a nonprofit organization whose mission is to help relieve the financial distress of its active duty and retired service members. Veterans can also take advantage of one of the many other independent, nonprofit organizations dedicated to serving their needs. Many of these groups help veterans apply for their federal benefits, offer financial and employment advice, and act as advocates on their behalf.
Under the auspices of the federal government, numerous private lenders offer various loan programs to qualified veterans. The Interest Rate Reduction Loan (IRRL), also known as the VA Streamline Refinance, helps save money on a refinance loan by lowering its interest rate and waiving many traditional closing costs. The Veterans Benefits Improvement Act, passed by Congress in 2008, allows a veteran to utilize up to 100 percent of the appraised value of a home for a VA Cash-out Refinance Loan.
Many banks and lending institutions also offer debt consolidation loans to veterans with substantial home equity, allowing them to restructure their high-interest rate obligations into one manageable, monthly payment.