The way it was explained to me is that you have to pay up front and then send in the bills to the VA to get your money back (I am sure that is a speedy process). It also has to be a 141 school I believe.
I too am wondering how it changes your limits. For instanse if I use $10K for flight training, is there still money left up to the tuition cap for that year or do you loose a year for that $10K? Can I go to a college and go to the FBO for flight training?
If you have the time, it makes more sense to enroll in school and take basket weaving. Your school will be 100% paid for and you get housing and books. Then use the $1500/mo housing allowance to fly. This gives you $18K to spend rather than $10K. It is sad the the full amount to use for flying, is less that the housing allowance for someone going to regular school.
"note to the grammar and spelling police, it is early and I just don't care!"