Soldiers who enlisted prior to August 2009 will have to choose between the Montgomery Bill and the Post-9/11 Bill.

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The Montgomery GI Bill

Since its inception in the 1940s, the GI Bill has helped put millions of veterans through school. It has perhaps never been as robust as it is in its Post-9/11 incarnation. The Veterans Administration is only accepting applications for the Post-9/11 Bill; if you have Montgomery Bill coverage, you can switch over to Post-9/11 enrollment (the VA will even reimburse your $1,200 enrollment contribution from the Montgomery Bill). But not so fast: The Post-9/11 bill isn't a perfect fit for everyone. You may want to figure out which bill is right for you.

For example, the Montgomery GI Bill is paid in a set monthly rate directly to the veteran. As of August, 2008, that rate was set at $1,321 per month. For some veterans, this may be more than the cost of school and other expenses. Since the Montgomery benefit is paid directly to the veteran, he or she can pocket the difference. The Post-9/11 benefit can pay out much more for veterans who meet the qualification criteria, but checks for tuition and fees are paid directly to the school and won't exceed the total cost.

Since the Post-9/11 benefit payments are made directly to the school, colleges and lenders will take this into account when considering what amount of financial aid and student loans may be available for the veteran. This is not the case with the Montgomery Bill. A veteran can still apply for scholarships and student aid like any other student; a full ride in grants and scholarships would mean that the veteran's Montgomery Bill benefit checks are extra monthly income rather than payment for school. This is something to consider when calculating what benefits you're qualified for under the Post-9/11 Bill. If you're not eligible for the housing stipend and you've got grants and scholarship money available, then the Montgomery Bill may be the best for you.

Keeping the Montgomery Bill is also wise if you're unsure of whether you plan on transferring your benefits to your spouse or children. The Post-9/11 Bill requires that the soldier transfer benefits while on active duty; the Montgomery Bill allows transfer during the 10-year period the benefits are in effect. You may also want to keep the Montgomery Bill if you participated in the $600 buy-up. The additional $5,400 in aid won't transfer to the GI Bill.

Read the next page to learn about financial aid for Reserve veterans.