Funding sources remain unidentified for one of Gov. Peter Shumlin’s signature economic development initiatives, the Vermont Strong Scholars program.
The college loan forgiveness initiative is designed to promote post-secondary education, target resources to high-demand and high-wage occupations, and shore up Vermont’s waning demographic of working-age residents.
The program was proposed by Shumlin in 2013 and passed by the Legislature in 2014. It’s slated to roll out in summer 2015, but its first bill won’t come due until Fiscal Year 2018.
Under the program, Vermont residents who enroll in certain two- or four-year degree programs after July 1 may be eligible for loan forgiveness for their final semester or year of schooling. The program can be applied toward tuition at the University of Vermont, the Vermont State College system or an in-state Independent College.
The loans aren’t paid off in full upon graduation, but repaid on students’ behalf as long as they stay in Vermont and continue working in qualifying engineering or information technology occupations.
Vermont Strong Scholars may cost up to $3.7 million per year at its projected peak of 384 students (134 students graduating with associate’s degrees, 250 with four-year degrees). The Vermont Student Assistance Corporation, the lender of choice for the program, has offered to pay about $100,000 per year.
Lucy Leriche, deputy secretary of the Agency of Commerce and Community Development, told the House and Senate’s Joint Fiscal Committee on Nov. 12 that the agency’s preferred interpretation of the statute would limit eligibility to students who enroll in qualifying degree programs after July 2015, rather than otherwise-eligible students already in school.
“This allows time for ACCD to work with the legislature to identify a sustainable source of funding as the costs increase incrementally,” Leriche told lawmakers in an interim report.
Leriche delivered the update the same day the Joint Fiscal Committee was told to expect a $100 million budget gap for Fiscal Year 2016.
Without a clear funding mechanism, Leriche said, officials also are discussing sponsorship with the Vermont business community.
One possible source is the existing Higher Education Trust Fund, which provides non-loan financial aid to Vermont students pursuing higher education in the state. Another is the Workforce Education and Training Fund, which pays for occupational skills training for unemployed or underemployed Vermont workers.
Rep. David Sharpe, D-Bristol, opposes the idea of using the workforce money.
“What will be seeing less money as a result of (paying for) Vermont Strong costs out of that pot?” he asked.
“That is a legislative decision,” Leriche responded.
Leriche said the state may need to appropriate money from the General Fund to get the program off the ground.
The lawmakers agreed to indefinitely shelve any discussion of expanding the program to non-residents matriculating into Vermont degree programs, or Vermont students attending out-of-state schools.
The Vermont Strong Scholars program was developed by the House Committee on Commerce and Economic Development. Rep. Bill Botzow, D-Pownal, chair of the committee, could not be reached for comment.
Former Rep. Michele Kupersmith, D-South Burlington, who resigned that position to take the position of workforce development and training coordinator with the Department of Labor, did not respond to a request for comment by press time.
