VSAC asks House committee for expanded loan-forgiveness and scholarships to retain Vermont workers

Vermont Student Assistance (VSAC) officials told the Vermont House Committee on Commerce and Economic Development on Feb. 18 that they are seeking expanded state funding for several workforce-focused education programs, including a proposal to extend a tuition-covering scholarship to Vermont State University and requests to replenish multiple forgivable-loan programs for teachers and mental-health professionals.

The budget request centers on a 3.6% increase to VSAC's base funding in the governor's budget, VSAC Chief Operating Officer Patrick LeDuc told the committee. "That is largely focused on trying to increase the 802 Opportunity Program from a $150,000 household income to a $100,000 household income," LeDuc said, describing that program as a layered, means-tested benefit that sits on top of VSAC's grant programs.

VSAC also proposed the Freedom & Unity Scholarship, modeled on the 802 Opportunity Program, to cover tuition and fees for eligible students at Vermont State University. "The Freedom and Unity scholarship proposal is to model that same program for Vermont State University," LeDuc said, adding VSAC provided budget scenarios targeting a $75,000 household income and a higher $100,000 threshold as options for a pilot or larger rollout.

Why it matters: Committee members repeatedly framed the requests as investments in retaining teachers, nurses, mental-health clinicians and other workers that state agencies and designated community providers need. Lawmakers pressed VSAC for outcome data and distribution details to determine how quickly the state would see new professionals in the workforce if funding continues.

Key program requests and recent use

- 3.6% base increase (included in governor's budget): VSAC said this increase primarily would fund expansion of the 802 Opportunity Program to households with incomes up to $100,000; the estimated cost cited by VSAC for that expansion is roughly $945,000.

- Freedom & Unity Scholarship (new proposal): VSAC presented options to start a program for Vermont State University modeled on the 802 Opportunity design; budget scenarios ranged by income threshold and program scope. VSAC described $5.2 million as a fuller-program estimate to cover all campuses and noted a pilot could start at a smaller funding level.

- Teacher loan-forgiveness program (request $3.9 million): VSAC reported it supported about 74 students in fiscal 2024 and 66 in fiscal 2025 through the teacher forgivable-loan program, and that an additional 218 applications for the program went unfunded when available funds ran out. VSAC told the committee the $3.9 million request is not included in the governor's budget.

- Mental-health professional forgivable-loan program (request $1 million): VSAC said an initial $1.5 million appropriation (carryforward and new funding) funded awards in FY24 and FY25 but that the program exhausted available funding and had 365 unfunded applicants. VSAC asked for $1 million to continue awards and noted it has limited outcome data because the programs are newer.

Program mechanics and outcomes

VSAC officials described forgivable-loan programs as structured similarly to an existing Vermont National Guard model: one year of tuition/fees forgiven for one year of service in Vermont. Tom, vice president and general counsel for VSAC, said the model is designed to make the terms easy to understand and to act as an incentive to keep graduates working in Vermont.

VSAC said some forgivable-loan funds have been fully utilized in recent years and that outcomes reporting is still maturing. For example, VSAC reported that roughly 25% of teachers using the program were male and about half of participants remained Pell eligible, indicating the programs reach low-income students.

Other VSAC supports

VSAC described additional programs and services the state appropriation supports, including: - Micro grants (short-turnaround awards up to $400) that help students cover small, urgent expenses that otherwise might cause them to stop out of college; VSAC said counselors submit applications and funds are paid directly to students. - Dual-enrollment support that pays flat amounts directly to students flagged by free and reduced-price lunch status to cover costs such as books or transportation. - Administration of roughly 40 private scholarships VSAC manages; officials said the scholarship application and selection process occurs each April and produces direct student benefits.

Committee questions and follow-up

Members asked for campus-level breakdowns of where teacher-program participants attend Vermont State University campuses and for further data on retention and employment verification as programs mature. VSAC said it can provide campus distribution data and expected employment-verification reporting as students graduate and enter service obligations.

VSAC also explained the repayment mechanics if recipients do not meet service obligations: the unpaid amounts go into repayment and are recycled to the same program as a revolving fund. VSAC said it currently administers repayment free to the state and pays program administration from a small portion of proceeds the agency may retain under federal and bond rules.

No formal committee votes or motions occurred during the VSAC presentation; the session was a budget briefing and Q&A.

Ending

Committee members said they value VSAC's outreach counselors and other supports and indicated continued interest in weighing the funding requests against other priorities. VSAC said it would follow up with additional data requested by lawmakers to support appropriation decisions.