Scott Giles, president and CEO of the Vermont Student Assistance Corporation, told the House Education Committee on Jan. 9 that changes in a recent federal reconciliation bill will materially change who can borrow and which programs remain eligible for federal student aid.

Giles said the bill caps parent borrowing at $20,000 per year with a $65,000 lifetime limit per student, and creates new annual and lifetime caps for graduate borrowing: $20,500 per year and a $100,000 lifetime cap for most graduate programs, and $50,000 per year with a $200,000 lifetime cap for programs defined under a decades-old list of so-called "professional programs." He warned those limits could push some families toward state loan programs or commercial credit markets if additional funds are needed.

The bill also, Giles said, includes accountability measures that would require individual programs to show their graduates earn "as much or more" than those with only a high school diploma (and at the graduate level, more than a bachelor’s degree) to retain federal loan eligibility. Negotiated rulemaking on how the data will be measured and the timing for compliance is ongoing, he said.

"What they did was they attached to what is a 50-year-old definition of professional programs," Giles said, noting nursing was not included on that list. "There’s a lot of consternation because by virtue of not being in that group you won’t be able to borrow as much." He added that the definition was likely a late-stage drafting compromise in conference negotiations.

Committee members asked how states would know which programs meet earnings thresholds. Giles and Patrick LeDoux, VSAC’s chief operating officer, said the U.S. Department of Education and negotiated rulemaking will set much of the detail, while state data—particularly from the Vermont Department of Labor—will be part of the evidence used to measure program returns.

Giles cited new Fed and research reports that suggest roughly 28% of graduate borrowers borrowed more than the new federal caps; about 40% of that group may have private credit available, leaving a subset who may be unable to access private loans because of credit constraints. "There's going to be wide geographic variation," Giles said, noting Vermont’s average credit score is higher than many states but saying the regs are still being worked out.

He urged the committee to monitor impacts on students with the fewest supports and to identify workforce-critical programs—examples cited included licensed clinical mental health counselors—where state interventions might be needed if federal aid eligibility is lost.

The Committee heard that negotiated rulemaking is active and that implementation is unlikely to be immediate, because regulators plan to look at multi-year earnings windows. Giles said the state should prepare to help students and programs adjust to changed federal expectations, and that VSAC and Vermont colleges are already discussing mitigation strategies.

The committee did not take any votes on federal policy in the session; the hearing was informational and focused on questions and next steps.