I have never been a big fan of the Reserves or the National Guard for just these reasons, they put way too many stipulations on serving and the compensations are used as incentives rather than giving them outright for serving as Active Duty troops do.
The definition of veteran for Federal student aid purposes is not necessarily the same as the definition of veteran for VA purposes. This can lead to potential problems, since the FAFSA processor performs a data match with Department of Veterans Affairs (VA) records to confirm a student's veteran status.
Members of the National Guard or Reserves, however, are only considered to be veterans if they were called up to active Federal duty by presidential order for a purpose other than training. A member of the National Guard or Reserves who is called up to active State duty is not considered a veteran. A key issue is whether they were under the control of a regular component of the US Armed Forces or remained under the control of the National Guard or Reserves.
A member of the Reserves who was called to active duty but who was discharged before serving on active duty (e.g., due to medical reasons) is not considered a veteran.
If a member of the armed forces was discharged during basic training for medical reasons, they are still considered a veteran for Federal student aid purposes so long as they served at least one day before being discharged.
If a member of the National Guard or Reserves was called to active duty and released, but then remained in the National Guard or Reserves, they are still considered a veteran. So long as they were called to active Federal duty by presidential order for a purpose other than training, served at least one day on active duty, and then were released under a condition other than dishonorable, they are considered a veteran for Federal student aid purposes.
