ACE loan and Initial Fee


10-Year Member
5-Year Member
Jul 13, 2008
There is some conflicting information out there about this topic. Some say that there is a $2500-$3000 initial fee while others say that it is covered in the ACE loan. My question is that if it is covered in the loan, is the loan paid back through the mid's salary or by external money? Thanks in advance.
It is my understanding that loans are paid off over the four years of a mid's tenure at USNA. If a mid voluntarily separates and owes money, the Navy will require the individual to pay back that amount upon separation. Early on, the loan is used to pay for uniforms, initial issue of supplies, etc. That cost is much more than you get paid in your first few months, or even year, leaving you in debt to the USN if you leave early.
Thank you, sir.

In addition, it is my understanding that scholarships can be applied to the ACE loan. Since it would otherwise be paid off with your midn salary, does this mean that you would see more money in your monthly paycheck?
I have been wondering the same thing and have never seen the question answered quite clearly. I will state it a different way: What if we as parents want to write a check to the Naval Academy covering all these fees for books, laptops, uniforms, etc. so that our student is not in debt? Would our mid then get more on his monthly paycheck? What if we write a check for half? Would the deduction be less from his paycheck, or would they still take out the same amount as everyone else but he would just be paid off faster?
oops, left off one similar question: Is the ACE loan mandatory?
My inlaws sent proceeds from Education IRA to USNA for our son. It was applied to his ACE loan. We still are not sure what that means. The overall balance is lower, but he does not get a larger paycheck. Plebes get plebe pay.
No you do not see more money in your paycheck. All Midshipmen 4/c get paid $100.00 per month their Plebe academic year ($50.00 July and August of Plebe summer) $200 youngster year, $300 second class year and then your first class year it converts to a normal paycheck with deductions taken out for services provided. The line item on ACE Loan sis paid off at the end of second class year.

During the first three years there is a line item for held pay. If you have too much in your held pay account you will get a lump sum at the end of the year. It is my understanding you at some point will get more back in held pay if you applied scholarship money, Edu. IRA's etc against the ACE Loan.

For Plebe parents - over Plebe Summer or sometime this year your Plebe will have received a booklet called "Midshipmen Stipend and Annual Budget Booklet. That goes through everything they need to know about their pay, including how to read their pay stubs, when they pay for certain articles of clothing etc. My Mid brought it home with his things after Plebe year. It is very interesting and does answer these question in lengthy detail. If you have a chance to look at it, it is worth perusing.

All Midshipmen will carry the ACE loan.
What is the ACE loan? I've never heard of it!

And I asked this question a few days/weeks/whatevers back: is there any kind of fee I or my parents have to pay on I-day [or then abouts]?? Anything at all?

Profmom2 said:
All Midshipmen will carry the ACE loan.

How do I get/apply for one then?

Katie :cool:
Costs and financial obligations
An interest-free loan from the federal government is advanced to entering midshipmen to help defray first-year costs. This is the ACE loan. This loan is repaid through monthly deductions from midshipmen pay during the first two to three years at the Academy. Parents should have their midshipmen speak to the USNA Finance Office about helping to repay debt, purchase textbooks, etc.

Reporting for Induction Day
Prior to Induction Day, appointees must have proof of United States citizenship on file at the Naval Academy. Appointees without proof of citizenship on file will not be given the Oath of Office. Name changes must be documented by a court order. Appointees without proof of citizenship on file will not be given the Oath of Office. Confirmation of immunization against common communicable diseases will be requested before induction. Specific instructions will be provided in the Permit to Report packet. Starting with the class of 2012 the entrance fee is not required. That be said, things can change. Your Permit to Report packet will tell you what you need to know.
Thanks Profmom. I will ask son about budget booklet. Would be interesting to read.
The Class of 2012 did not pay any fees on or before I Day.

All those plebes processed on I Day signed a form, one among many, for the loan. They also signed forms charging many, many uniform pieces that day. They had a sense of how much it was all costing, but didn't pay cash (nor did the parents) at any time that day. Or since, really.
They may not have paid any "cash" on I day but trust me they have paid A LOT that they don't see since. Just ask you mid how much books cost that first semester - no they did not get a bill - no they did not pay anything out of pocket but their paycheck is not exactly a paycheck. It is a stipend of what is left after paying for all these "free" things.

We shared a google spread sheet that first year where he recorded every thing spent at mid store and uniform shop. It was not cheap! Books alone for 1st semester Plebe year were over $800.00, the computer system was $2475.30

Keep in mind if they "over" spend at the Mid store during the year they will get no Held pay back and in the case of this last year there were numerous that had a Bill to pay at the end of the AC year for all those items they thought were "free."
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Budget Example from the Class of 2010 July of 2006 (Male) Females are more Expensive
$2500 Entrance Fee
$6500 Ace Loan
$ 845.67 Pay

Total Income $9845.67

Fixed Deductions
Fica SS $52.43
Fica Med $12.26
State Income Tax $19.03
Fed Income Tax $34.97
Life Insurance $29.00
MIDN Services $206.90 Personal Deduction for Hair Cuts, Cobbler Shop, IT, Laundry/ Dry Cleaning
Total $354.59

Fixed MIDN Activity Fees
Midshipmen Welfare Fund $20.00
Naval Academy Athletic Association $8.00
Total $28.00

Variable Deductions
Mid Store $2475.30 Computer
Uniforms $2993.00 (Female is $3091.00)
Books $211.50 This is a budget line item - August was $330.00 Rithe there with a book bill of $800 mine had already "overspent"
Alumni Association $0.00 Nothing is paid during Plebe Year
ACE Loan Payment $0.00 Does not start until November and for the year will be a total of $1100.00
Total $5679.80

Cash Pay $50.00

Ace Balance $6500.00
Held Pay $3733.28

Start August with $3733.28

Each Mid must have $440.00 left in held pay going into 3/C year. However they were budgeted to have $1188.32 left in Held pay for July of 3/c year. They had to have at least $600.00 left in Held Pay going into 2/c year.

As you can see if they really overspend at the Mid store or Uniform shop they will have to "out of pocket" make up for deficiencies in held pay. There is no Held pay that goes into 1/c year. You will either get what is left distributed or you will owe.

This information is from the Budget book for the Class of 2010.
This is pretty confusing...What is the loan for? Does each cadet have to take a loan? Can parents pay for uniforms/books? Do plebes receive $50/month for spending money? And, finally, does anyone know if the same system in used at USMA or AF? If I could swing it, I'd like to avoid my son taking on a loan to pay for his computer/books/uniforms...but based on your spreadsheet, I can't figure out if there is a way to do so...

Thanks for all of your info. I admit that I can be slower than most when it comes to understanding how all this works...:rolleyes:
Two things -

a) why do females cost more?
Profmom2 said:
$2500 Entrance Fee
$6500 Ace Loan
$ 845.67 Pay

Total Income $9845.67

--> The Entrance Fee.. is that paid in on I-Day?
--> Does everyone "get" an Ace Loan and/or how does one apply for it?

Or is it just ~$100/month for plebes and be done with it?

~ a befuddled Katie

[and I'm assuming the total income is the money the students get paid in total over 4yrs, with the stuff like books, uniforms, hair cuts already subtracted, right?]
The Ace Loan at USNA is mandatory. It is an interest free loan that is paid back over almost 3 years. It starts being paid off in November of 4/C year and finishes at the end of May of Mids 2/C year. Scholarships - if the issuing organization allows can be applied as can Educational savings accounts. The thing to remember even if you use Scholarship etc towards the Ace Loan your Midshipman's pay will not be any different than any of his classmates. It will be seen in the payback of held pay.

Starting with this past class there is no longer an initial enterance fee - it has been rolled into a larger ACE Loan. I would imaging the ACE loan for the class of 2012 was somewhere just over 9000.00. What everyone should keep in mind is that this is the only time we all will have use of the governments "free" money since this carries no interest, and is automatically accounted for in the way Midshipmen are paid. The big thing they have to keep in check is Midstore charging. Other than books - My Mid does not use it and pays for everything else on a debit card. He has gotten some held pay back every year.

There is no "application" for the ACE Loan. They will sign some documents on I Day acknowledging that they have been issued this money into their pay account. If they do leave the academy prior to paying it off they are responsible to reimburse the Navy for outstanding balances that they have already spent.

That example of Total Pay was for the Month of July of Plebe summer only. It includes your regular pay rate plus Ace Load and Fee (no longer collected on IDay)

Your total pay over 4 years will be more like $10,000+ your Plebe Year, 10,000+ your Third Class year, $10,000+ your Second Class year and 10,000+ your First Class year. So over the course of the 46 months at USNA you will be paid over $40,000, That does not include the ACE Loan or for the Classes of 2010 and 2011 their Initial Entrance fee.

Pay rate is about 850.00 per month every year. Out of that pay and your held pay is how you pay for all of your expenses. Even if you do your own laundry, girls never get a hair cut at Brigade Beauty Shop you are charged for those services which is why they fall in the Fixed Deductions.

Plebe Summer every Plebe will receive $50.00 at the End of July and End of August. Starting in September it goes up to $100.00 per month. This is all that is "left" after all of your deductions from your ~850 per month pay. Starting in July of 3/c year your cash pay (no not in cash but deposited to your Navy Federal Account) is $200.00 per month, and then in 2/c year it goes up to $300.00 per month. Starting your first class year it looks more like a real paycheck as the loan is paid off it but there are still some fees that will be subtracted at different times of the year so some months will be above $500 and others more like $350 (you pay for your Alumni membership,2 months and Books)

I would imagine the pay is similar at USAFA and USMA but will defer any details as I really only have ever seen the Budget book that the Midshipmen use.

If you can find a copy of Brief Points This budget stuff is also explained in that book.

Katie - get used to it, it just cost more to be a girl! Uniforms are more expensive. You have items like Trousers and skirts, Heels and flats; - yet to see a male Mid in a skirt and heels! - I am sure you get the picture! :rolleyes:
Pay rate is about 850.00 per month every year....

I would imagine the pay is similar at USAFA and USMA......

And for USCGA as well. :wink:

Pay rates for cadets/midshipmen is set by US Code, Title 37, Chapter 3, Paragraph 203 (c):

A cadet at the United States Military Academy, the United States Air Force Academy, or the Coast Guard Academy, or a midshipman at the United States Naval Academy, is entitled to monthly cadet pay, or midshipman pay, at the monthly rate equal to 35 percent of the basic pay of a commissioned officer in the pay grade O–1 with less than two years of service.


O-1 basic pay with less than 2 years is $2,557.70 as of today.

Therefore, cadet pay at USAFA/USMA/USCGA and midshipman pay at USNA is $894.50 per month.
$879.83 is what USNA is showing for 2008. $897.43 per month starting in January for 2009.
Oooooh skirts!! :biggrin::rolleyes:

jk, this info is very interesting! How it's all worked out :smile:
Thank you so very much Profmom2 for the detailed explanation, definitely understand it now!!! (and shall go look for a scholarship :smile:)
And thanks for the documentation, Luigi59!