VSAC asks for 3.6% state funding increase to expand tuition aid and forgivable-loan workforce programs

Scott Giles, president and CEO of the Vermont Student Assistance Corporation, told the House Education Committee on Feb. 7, 2025, that the governor pos;s proposed budget includes a 3.6% increase in VSAC pos;s state appropriation — roughly $945,000 — and that the additional funds are intended to expand need- and access-focused programs including the 802 Opportunity and several forgivable-loan workforce programs.

Giles said the $945,000 would raise the income threshold for the 802 Opportunity program (which currently serves families earning $75,000 or less at the Community College of Vermont) to $100,000, which he said would make roughly 70% of Vermont families eligible for the program. He described the proposed base increase as the core of VSAC pos;s budget request and highlighted other workforce-focused uses of state and federal funding.

The Vermont Student Assistance Corporation, founded in 1965, administers the state grant program and a range of federal and state-funded counseling and loan programs, Giles said. VSAC administers federal TRIO-style college access counseling in many middle and high schools, a state-supported advancement grant for adults pursuing nondegree credentials, and a suite of forgivable-loan programs aimed at workforce shortages, including nurse and teacher forgivable-loan programs.

Giles described the nurse forgivable-loan program as VSAC pos;s largest forgivable-loan program and said it receives about $3.3 million in Global Commitment (Medicaid) funds. He told the committee that VSAC also administered a one-time $1.5 million forgivable-loan incentive program for mental-health professionals that is now fully expended for the coming academic year and that VSAC is highlighting that program for potential continued support because of workforce needs in school settings.

On teachers, Giles told the committee that Vermont has 10% fewer teachers than before the pandemic, that the state has a high share of emergency or provisional licenses, and that the Vermont teacher forgivable-loan program is intended to recruit and retain teachers by covering tuition up to the in-state UVM rate in exchange for a year of service in Vermont for each year of support. He said the program is not need-based but noted that 46% of recipients were Pell-eligible; 24% identified as male and about a quarter were ages 20 to 30. Giles said VSAC had requested additional funding for the teacher forgivable-loan program (Giles referenced a $3.9 million figure when describing that request).

Giles said VSAC retains the authority under statute to charge an administrative fee of up to 7% of an appropriation and that the agency also keeps up to 2% of interest earned on its supplemental loan portfolio to support program administration; he added VSAC has not used its statutory administrative fee in recent years because other revenue sources have covered costs. He also said the agency has permission to use up to $300,000 of state funding for an "aspiration" program that partners with selected high schools to narrow the postsecondary continuation gap for first-generation students.

Committee members pressed for more detail about outcomes and tracking. Giles said VSAC is building tracking systems to follow participants and reported historically high fulfillment rates for the nursing forgivable-loan program (about 90% of participants fulfill work obligations in Vermont, he said), while adding that the teacher program is still early and outcomes will be evaluated over time.

No formal votes were taken during the committee pos;s hearing on Feb. 7; the discussion was testimony and Q&A about VSAC pos;s budget request and program outcomes. Giles closed by offering to provide the committee the research link and additional materials requested by members.

Ending: The House Education Committee will consider VSAC pos;s requests in the context of the larger state budget process; the chair explained later in the hearing that appropriations decisions move next through the Appropriations Committee, which reviews and prioritizes the governor pos;s proposals before the legislature reaches final budget decisions.