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Subchapter 001: GENERAL PROVISIONS
§ 2821. Student Assistance Corporation; purpose
(a) There is hereby established a nonprofit public corporation to be known as the Vermont
Student Assistance Corporation whose purpose shall be:
(1) to provide opportunities for persons who are residents of Vermont to attend colleges
or other postsecondary education institutions by awarding grants, guaranteeing, making,
financing, and servicing loans of funds to students qualifying under the terms and
conditions set forth in this chapter;
(2) to provide career, educational, and financial aid counseling and information services;
and
(3) for such other purposes not inconsistent therewith.
(b) The Corporation and its existence shall continue as long as it shall have notes, bonds,
or other obligations outstanding, including notes, bonds, or other obligations hereafter
issued or incurred, and until its existence is terminated by law. The net earnings
of the Corporation, beyond that necessary for retirement of its notes, bonds, or other
obligations or to implement the public purposes and programs authorized in this chapter
shall not inure to the benefit of any person other than the State. Upon termination
of the existence of the Corporation, title to all of the property owned by the Corporation,
including any net earnings of the Corporation, shall vest in the State. The State
reserves the right at any time to alter, amend, repeal, or otherwise change the structure,
organization, programs, or activities of the Corporation, including the power to terminate
the Corporation, subject to any limitation on the impairment of the obligations of
any contract or contracts entered into by the corporation.
(c) Notwithstanding any general or special law to the contrary, the provisions of 8 V.S.A.
chapter 73 shall not apply to the Corporation or to any loan made or serviced by the
Corporation in accordance with this title. (Added 1965, No. 198, § 1(a); amended 1975, No. 170 (Adj. Sess.), § 1; 1981, No. 174 (Adj. Sess.), § 1, eff. April 20, 1982; 1993, No. 147 (Adj. Sess.), § 1; 2003, No. 86 (Adj. Sess.), § 2; 2009, No. 96 (Adj. Sess.), § 3, eff. January 1, 2011; 2017, No. 22, § 30, eff. Jan. 1, 2011; 2019, No. 131 (Adj. Sess.), § 97.)
§ 2822. Definitions
As used in this chapter:
(1) “Corporation” means the Vermont Student Assistance Corporation.
(2) “Board” means the Board of Directors of the Vermont Student Assistance Corporation.
(3) “Student” means any person who:
(A) has graduated from a secondary school, satisfied the requirements for graduation by
passing examinations covering the subject matter of a secondary school curriculum,
or met the eligibility criteria established by the U.S. Secretary of Education for
the receipt of student financial assistance under Title IV of the Higher Education
Act, and in each case who is attending or plans to attend an approved postsecondary
education institution; or
(B) is attending an approved postsecondary education institution. For the purposes of
the student loan program, “student” means a student as defined by the Board and which
definition shall not be inconsistent with federal regulations.
(4) “Parents” means a student’s parent or parents as determined by the Corporation consistently
with the requirements of the federal financial assistance programs established under
Title IV of the Higher Education Act.
(5) “Adjusted gross income” means an individual’s adjusted gross income under the laws
of the United States relating to federal income taxes for the tax year next preceding
the school year for which a grant or loan is sought.
(6) “Approved postsecondary education institution” means any institution of postsecondary
education that is:
(A) certified by the State Board of Education as provided in section 176 or 176a of this title;
(B) accredited by an accrediting agency approved by the U.S. Secretary of Education pursuant
to the Higher Education Act;
(C) a non-U.S. institution approved by the United States Secretary of Education as eligible
for use of education loans made under Title IV of the Higher Education Act; or
(D) a non-U.S. institution designated by the Corporation as eligible for use of its grant
awards.
(7) “Resident” means, with respect to a student, a student who has been domiciled in Vermont
for the year preceding the date of commencement of the relevant semester or academic
program. A residence established in Vermont for the purpose of attending an educational
institution shall not of itself be sufficient to establish domicile in Vermont. Whenever
a resident student loses his or her Vermont domicile, as in the case of a minor whose
parents move from the State, the student shall thereafter be reclassified as a nonresident.
(8) “Taxable,” when used in reference to a note, bond, or other obligation means that
the interest on that obligation is includable in the gross income of the holder under
the laws of the United States relating to federal income taxes.
(9) “Higher Education Act” means the federal Higher Education Act of 1965, Pub. L. No.
89-329, 20 U.S.C. chapter 28, as amended, together with the regulations promulgated
under that Act by the U.S. Secretary of Education. (Added 1965, No. 198, § 2(a)-(i); amended 1967, No. 131, § 9; 1967, No. 371 (Adj. Sess.), § 1, eff. March 27, 1968; 1971, No. 175 (Adj. Sess.), § 1, eff. March 28, 1972; 1973, No. 69, § 1, eff. April 14, 1973; 1973, No. 157 (Adj. Sess.), § 1, eff. March 15, 1974; 1975, No. 170 (Adj. Sess.), § 2; 1985, No. 24, § 2, eff. April 26, 1985; 1993, No. 147 (Adj. Sess.), § 2; 2003, No. 21, § 2; 2003, No. 86 (Adj. Sess.), § 3; 2019, No. 131 (Adj. Sess.), § 98.)
§ 2823. Powers of Corporation
(a) The Corporation may acquire by gift or otherwise, hold, and dispose of property in
fee or in trust, or any other estate, for the purposes set forth in this chapter and
shall be an instrumentality of the State. The State shall support and maintain the
Corporation.
(b) The Corporation has the general powers provided to Vermont nonprofit corporations.
(c) The Corporation is hereby designated as the state agency to receive federal funds
assigned to the State of Vermont for student financial aid programs.
(d) The Corporation is authorized to make and finance the making of education loans and
to issue its debt obligations for the purpose of acquiring funds therefor. No resolution
or other action of the Corporation providing for the issuance of such debt obligations
may be effective without the approval in writing of the Governor.
(e) The Corporation is authorized to develop and implement loan programs, including programs
for the guaranteeing, servicing, originating, and financing of education loans for
borrowers and lenders located both within and outside the State, including the federal
Direct Loan Program and other education loans made pursuant to federal law. The Corporation
is authorized to make loans to residents and nonresidents.
(f) The Corporation is authorized to borrow money and issue its debt obligations to further
the governmental and public purposes set forth in this chapter, including the purchase,
construction, renovation, reconstruction, rehabilitation, improvement, furnishing,
and equipping of office or other business space to be owned or leased by the Corporation
for use by the Corporation to further the governmental and public purposes set forth
in this chapter. Notwithstanding subsection 2868(i) of this chapter, notes, bonds,
or other obligations issued under this section may be direct and general obligations
of the Corporation, and may be otherwise secured as the Corporation shall determine,
including by a mortgage. No debt obligation issued under this subsection may be effective
without the approval in writing of the Governor. Such obligations shall not be deemed
to constitute a debt or liability or obligation of the State of Vermont or of any
political subdivision of it, nor shall they be deemed to constitute a pledge of the
faith and credit of the State or of any political subdivision thereof. Each obligation
issued by the Corporation under this section shall contain on its face a statement
to the effect that neither the faith and credit nor the taxing power of the State
of Vermont or any political subdivision of it is pledged to the payment of the principal
or the interest on these obligations. (Added 1965, No. 198, § 1(b), (c); amended 1967, No. 131, § 1; 1975, No. 170 (Adj. Sess.), § 3; 1981, No. 174 (Adj. Sess.), § 2, eff. April 20, 1982; 1993, No. 147 (Adj. Sess.), § 3; 2001, No. 58, § 6, eff. June 16, 2001; 2003, No. 86 (Adj. Sess.), § 4.)
§ 2824. Repealed. 1973 (Adj. Sess.), No. 157, § 2, eff. March 15, 1974.
§ 2825. Tax exemptions
All real and personal property of the Corporation is exempt from taxation. All bonds,
notes, and other obligations issued pursuant to this chapter are issued by a body
corporate and public of this State and for an essential public and governmental purpose
and those bonds, notes, and other obligations, and the interest on and income from
them, except as otherwise provided by resolution of the Corporation authorizing the
issuance of taxable debt pursuant to section 2868 of this title, and all activities of the Corporation and fees, charges, funds, revenues, incomes,
and other monies of the Corporation whether or not pledged or available to secure
the payment of these bonds, notes, or other obligations, or interest thereon, are
exempt from all taxation, franchise taxes, fees, or special assessments of whatever
kind except for transfer, inheritance, and estate taxes. (Added 1965, No. 198, § 9; amended 1981, No. 174 (Adj. Sess.), § 3, eff. April 20, 1982; 2003, No. 86 (Adj. Sess.), § 5; 2019, No. 131 (Adj. Sess.), § 99.)
§ 2826. Statutory purposes
(a) The statutory purpose of the exemption for interest income from Vermont Student Assistance
Corporation bonds in section 2825 of this title is to lower the cost of borrowing in order to finance education loan programs.
(b) The statutory purpose of the exemption for Vermont Student Assistance Corporation
property tax in section 2825 of this title is to allow State instrumentalities that provide financial and information resources
for postsecondary education and training to use all of their resources for those purposes. (Added 2013, No. 200 (Adj. Sess.), § 1.)
§ 2827. Confidentiality of personally identifying information
Except as otherwise provided by law, or by consent of the individual identified in
the record, information that directly or indirectly identifies applicants, recipients,
beneficiaries, or participants in programs administered by the Corporation, including
grant, loan, scholarship, outreach, or investment plan programs, is exempt from public
inspection and copying under the Public Records Act and shall be kept confidential. (Added 2015, No. 29, § 4.)
§ 2828. Financial aid eligibility for certain students
(a) Notwithstanding any provision of law to the contrary, a resident who is otherwise
eligible for a State-funded financial aid program administered by the Corporation
shall not be ineligible solely on the basis of such resident’s immigration status
under federal law.
(b) The Corporation shall establish procedures and forms that enable residents eligible
under subsection (a) of this section to apply for, and participate in, all State-funded
student financial aid programs administered by the Corporation for which such residents
are eligible to the full extent permitted by federal law. The Corporation may collect
such information as is necessary to confirm eligibility for participation in programs
administered by the Corporation.
(c) The Corporation may adopt rules pursuant to 3 V.S.A. chapter 25 as necessary to carry out the provisions of this section.
(d) The Corporation shall include information regarding the impact of this section and
the number of students who receive financial aid pursuant to this section in its biannual
report to the General Assembly pursuant to subsection 2835(c) of this title. (Added 2023, No. 136 (Adj. Sess.), § 3, eff. July 1, 2025.)
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Subchapter 002: BOARD OF DIRECTORS
§ 2831. Membership; vacancies
The Corporation shall be governed and all of its powers exercised by a Board of Directors
consisting of 11 members. The Governor shall appoint five members as follows: one
person to be the financial aid officer of an institution of postsecondary education
in the State of Vermont; one person to be a guidance counselor from a Vermont secondary
school; and three members representing the general public. In making the appointments
of the members representing the general public, the Governor shall give due consideration
to the Board’s needs for expertise and experience in the management of a financial
institution. The State Treasurer or his or her designee shall be a member. The Speaker
of the Vermont House of Representatives and the Committee on Committees of the Vermont
Senate shall each appoint one member from their respective legislative bodies to serve
on the Board. The Board shall elect three additional members. All members shall be
of full age, citizens of the United States, and residents of Vermont. All appointments
shall be for terms of six years with the exception of legislative members whose terms
shall expire at the end of six years or when their service in the Vermont General
Assembly is completed, whichever shall first occur. The date of the expiration of
the term of appointment in each case shall be June 30. Vacancies that may occur by
reason of death or resignation shall be filled in the same manner as original appointments. (Added 1965, No. 198, § 4(a), (b), (i); amended 1967, No. 131, § 2; 1989, No. 283 (Adj. Sess.), § 1; 2003, No. 86 (Adj. Sess.), § 6; 2011, No. 40, § 54, eff. May 20, 2011; 2019, No. 131 (Adj. Sess.), § 100.)
§ 2832. Organization and compensation
(a) The Board, with the advice and consent of the Governor, shall elect from its members
a chair. The Board shall also elect from its members a vice chair and secretary.
Each of the officers shall hold office for two years and shall be eligible for reelection.
(b) The Board shall serve without compensation except for expenses actually and necessarily
incurred by them in the performance of their duties under this chapter.
(c) The Board shall adopt bylaws for the Corporation and may appoint a president and determine
the president’s compensation and duties. The Chair annually shall notify the Governor,
the Speaker of the House of Representatives, and the President Pro Tempore of the
Senate of the president’s compensation.
(d) The Board may elect an executive committee to serve in the interval between meetings
to transact such business of the Corporation as provided in the bylaws. (Added 1965, No. 198, § 4(c), (d), (f), (g); amended 1967, No. 131, § 3; 1989, No. 283 (Adj. Sess.), § 2; 2003, No. 86 (Adj. Sess.), § 7; 2013, No. 92 (Adj. Sess.), § 185, eff. Feb. 14, 2014.)
§ 2833. Meetings; quorum
The Board shall hold regular meetings and such special meetings as it deems necessary.
A majority of the directors shall constitute a quorum for the transaction of any business
unless the bylaws of the Corporation require a larger number. (Added 1965, No. 198, § 4(e); amended 2003, No. 86 (Adj. Sess.), § 8.)
§ 2834. Powers and duties
(a) The Board has the power to adopt rules, regulations, policies, and procedures not
inconsistent with law, governing the application for and the origination, servicing,
and repayment of loans, the awarding of grants to students, and the Corporation’s
other activities and programs.
(b) [Repealed.] (Added 1965, No. 198, § 4(h), (j); amended 1967, No. 131, § 4; 2003, No. 86 (Adj. Sess.), § 9; 2013, No. 56, § 15, eff. May 30, 2013.)
§ 2835. Controls, audits, and reports
(a) Control of funds appropriated and all procedures incident to the carrying out of the
purposes of this chapter shall be vested in the Board.
(b) The books of account of the Corporation shall be audited annually by an independent
public accounting firm registered in the State of Vermont in accordance with government
auditing standards issued by the U.S. Government Accountability Office (GAO) and the
resulting audit report filed with the Secretary of Administration not later than November
1 each year.
(c) Biennially, the Board shall report to the General Assembly on its activities during
the preceding biennium. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this
subsection. (Added 1965, No. 198, § 8; amended 2003, No. 86 (Adj. Sess.), § 10; 2007, No. 121 (Adj. Sess.), § 5; 2013, No. 142 (Adj. Sess.), § 29; 2019, No. 104 (Adj. Sess.), § 5.)
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Subchapter 003: INCENTIVE GRANTS
§ 2841. Establishment; rules
A need-based grant program is hereby established to aid students who need financial
assistance and are pursuing undergraduate studies and give promise of completing satisfactorily
a degree program or who have been accepted for admission to an approved postsecondary
education institution for undergraduate studies. The Board may establish rules, regulations,
and standards for the awards under this subchapter. (Added 1965, No. 198, § 5(a); amended 2003, No. 86 (Adj. Sess.), § 11.)
§ 2842. Eligibility
(a) To qualify for an incentive grant for the first year of undergraduate study, a student
must be in attendance at an approved postsecondary education institution or be accepted
for admission and be enrolled as a full-time or part-time student at such an institution.
For each year following the first year of undergraduate study, the student must have
been certified by the institution attended to be in good standing and to give promise
of satisfactory completion of a course of study leading to a degree or diploma.
(b) Any qualified person may apply for an incentive grant in addition to any other scholarship
aid. (Added 1965, No. 198, § 5(b), (g); amended 1967, No. 371 (Adj. Sess.), § 2, eff. March 27, 1968; 2003, No. 86 (Adj. Sess.), § 12.)
§ 2843. Applications, certificates, and reports
(a) The recipient must apply for an incentive grant at least annually. Grants may be for
a maximum of five full-time equivalent school years.
(b) Each applicant for an incentive grant shall furnish a certificate of income with the
application. Attached to the certificate shall be a form of consent, executed by the
student and any other required persons, granting permission to the Vermont Commissioner
of Taxes to disclose the income tax information required by subsection (c) of this
section.
(c) The Vermont Commissioner of Taxes, when requested by the Corporation, shall compare
any certificate filed pursuant to this subchapter with the State income tax returns
filed by the persons making such certificate and shall report any instances of discrepancy
to the Corporation.
(d) [Repealed.] (Added 1965, No. 198, § 5(b), (d), (e), (f); amended 1967, No. 131, § 5; 1967, No. 371 (Adj. Sess.), § 3, eff. March 27, 1968; 2003, No. 86 (Adj. Sess.), § 13; 2015, No. 29, § 5.)
§ 2844. Amount received; proration
(a) Each undergraduate student who qualifies for an incentive grant shall apply on forms
provided by the Corporation. The Corporation may consider the student for an incentive
grant if the student meets the need-based eligibility standards established by the
Board. These standards shall give due consideration to all relevant factors affecting
the student’s need, including the adjusted gross income and other sources of income
of the student’s parents; the adjusted gross income and other sources of income of
a nondependent student; the assets of parents and students; the number of a parent’s
or nondependent student’s children who are students enrolled in approved postsecondary
education institutions at the same time; and any unusual circumstances that affect
the family financial strength. Incentive grants shall be awarded on a rolling basis
to eligible applicants based upon established need, and in total amount shall not
exceed the funds made available from legislative appropriation or other sources. In
no case shall a student’s award be larger than that needed to attend the approved
postsecondary education institution of the student’s choice.
(b) The Corporation may prorate incentive grants on the basis of semesters, other recognized
portions of a school year, or course load.
(c) Vermont resident students enrolled at the Medical College of the University of Vermont
or enrolled in a program leading to the degree of Doctor of Veterinary Medicine shall
be eligible to apply for an incentive grant and shall be subject to the provisions
of subsection (b) of this section. In addition, veterinary students shall be eligible
for grants not to exceed twice the amount of the average grant award made to full-time
undergraduate students in the previous year under subsection (a) of this section. (Added 1965, No. 198, § 5(c), (h); amended 1967, No. 131,§§ 6, 7; 1967, No. 371 (Adj. Sess.), § 4, eff. March 27, 1968; 1969, No. 89; 1971, No. 175 (Adj. Sess.), § 2, eff. March 28, 1972; 1975, No. 155 (Adj. Sess.); 1995, No. 63, § 188; 2003, No. 86 (Adj. Sess.), § 14; 2013, No. 92 (Adj. Sess.), § 186, eff. Feb. 14, 2014.)
§ 2845. Trust fund; grants; students in Department for Children and Families custody
(a) The Board shall establish a trust fund to be used to provide grants for students who
do not have parental support and are or have been under the custody of the Commissioner
for Children and Families. The Board may draw up to 90 percent of the assets in the
fund for these purposes.
(b) The trust fund shall consist of:
(1) funds appropriated by the General Assembly; and
(2) any gifts, grants, or contributions made to the trust fund.
(c) The Board may determine whether the trust fund is to be managed by the State Treasurer
or by a private firm contracted at the direction of the Board.
(d) Any amount remaining in the trust fund at the end of any fiscal year and any interest
accruing to the trust fund shall remain in the fund.
(e) A child who is under the custody of the Commissioner for Children and Families, or
a young adult between the ages of 18 and 24 who was under the custody of the Commissioner
for Children and Families for at least six months when that person was between the
ages of 16 and 18, and who is accepted for degree study at the Vermont State Colleges,
the University of Vermont, or a Vermont independent college, is eligible for an annual
grant under this section, to the extent that funds are available in the trust fund.
Upon certification by the Vermont State Colleges, the University of Vermont, or a
Vermont independent college that a Vermont resident student who is eligible under
this section has matriculated in a degree program at a Vermont college or university,
the student may receive a grant if the student’s financial aid eligibility leaves
remaining financial need following the student and the family contributions, if any,
and the availability of all other sources of gift aid. Each grant, together with the
student and the family contributions, if any, and all other sources of gift aid, shall
not exceed the full cost of tuition, fees, room, and board, and no individual annual
grant may exceed $3,000.00. The Board may prorate the funds appropriated for use under
this section where the collective need of the eligible applicants exceeds the funds
appropriated. In addition, the Board may prorate a grant based on a student’s full-
or part-time enrollment status.
(f) A person may receive a grant under this section for each of up to six consecutive
years. A young adult who receives a grant under this section prior to reaching 25
years of age shall continue to be eligible for grants under this section until six
years from the date of matriculation or until he or she has obtained an undergraduate
degree, whichever comes first.
(g) The Board shall coordinate implementation of this section with the Commissioner for
Children and Families, the President of the Association of Vermont Independent Colleges,
the Chancellor of the Vermont State Colleges, and the President of the University
of Vermont. The Board may establish procedures and policies or adopt rules to implement
this section. (Added 2003, No. 72 (Adj. Sess.), § 1, eff. Feb. 6, 2004; amended 2011, No. 58, § 12, eff. May 31, 2011; 2013, No. 92 (Adj. Sess.), § 187, eff. Feb. 14, 2014.)
§ 2846. Advancement grants
(a) The Corporation may establish an advancement grant program for residents pursuing
nondegree education and training opportunities who do not meet the definition of student
in subdivision 2822(3) of this title and who may not meet the requirements of this subchapter.
(b) Advancement grants may be used at institutions that are not approved postsecondary
education institutions.
(c) The Corporation may adopt rules or establish policies, procedures, standards, and
forms for advancement grants, including the requirements for applying for and using
the grants and the eligibility requirements for the institutions where the grants
may be used. Such rules shall be consistent with subsection (d) of this section.
(d) Notwithstanding subsection (a) of this section, applicants shall not be ineligible
for the advancement grant solely on account of the applicant’s residency status under
subdivision 2822(7) of this title if that applicant:
(1) qualifies as a refugee pursuant to 8 U.S.C. § 1101(a)(42) (definition of refugee);
(2) is granted parole to enter the United States pursuant to 8 U.S.C. § 1182(d)(5) (temporary admission of nonimmigrants for urgent humanitarian reasons); or
(3) is issued a special immigrant visa pursuant to the Afghan Allies Protection Act of
2009, Pub. L. No. 111-8 (8 U.S.C. § 1101 note), as amended. (Added 2003, No. 86 (Adj. Sess.), § 15; amended 2019, No. 80, § 4; 2023, No. 136 (Adj. Sess.), § 1, eff. July 1, 2024.)
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Subchapter 004A: NATIONAL GUARD
§ 2856. Repealed. 2018, No. 11 (Sp. Sess.), § E.215.2, eff. July 1, 2022.
(Added 1999, No. 62, § 61; amended 2003, No. 39, § 1; 2003, No. 86 (Adj. Sess.), § 21; 2007, No. 46, § 5, eff. May 23, 2007; 2007, No. 154 (Adj. Sess.), § 6; 2009, No. 4, § 86, eff. April 24, 2009; 2011, No. 149 (Adj. Sess.), § 8; repealed on July 1, 2022 by 2018, No. 11 (Sp. Sess.), § E.215.2.)
§ 2857. Vermont National Guard Tuition Benefit Program
(a) Program creation. The Vermont National Guard Tuition Benefit Program (Program) is created, under which
a member of the Vermont National Guard (member) who meets the eligibility requirements
in subsection (c) of this section is entitled to the following tuition benefit for
up to full-time attendance:
(1) For courses at any Vermont State College institution or the University of Vermont
and State Agricultural College (UVM), the benefit shall be the in-state residence
tuition rate for the relevant institution.
(2) For courses at any eligible Vermont private postsecondary institution, the benefit
shall be the in-state tuition rate charged by UVM.
(3) For courses at an eligible training institution offering nondegree, certificate training,
or continuing education programs, the benefit shall be the lower of the institution’s
standard tuition or the in-state tuition rate charged by UVM.
(4) For courses at a non-Vermont approved postsecondary education institution approved
for federal Title IV funding where the degree program is not available in Vermont,
the benefit shall be the in-state tuition rate charged by UVM.
(b) Tuition benefit.
(1) The tuition benefit provided under the Program shall be paid on behalf of the member
by the Vermont Student Assistance Corporation (VSAC), subject to the appropriation
of funds by the General Assembly specifically for this purpose. An eligible Vermont
postsecondary institution that accepts or receives the tuition benefit on behalf of
a member shall charge the member the tuition rate for an in-state student. The amount
of tuition for a member who attends an educational institution under the Program on
less than a full-time basis shall be reduced to reflect the member’s course load in
a manner determined by VSAC under subdivision (f)(1) of this section.
(2) The tuition benefit shall be conditioned upon the member’s executing a promissory
note obligating the member to repay the member’s tuition benefit, in whole or in part,
if the member fails to complete the period of Vermont National Guard service required
in subsection (d) of this section, or if the member’s benefit is terminated pursuant
to subdivision (e)(1) of this section.
(c) Eligibility.
(1) To be eligible for the Program, an individual, whether a resident or nonresident,
shall satisfy all of the following requirements:
(A) be an active member of the Vermont National Guard;
(B) have successfully completed basic training;
(C) be enrolled:
(i) at UVM, a Vermont State College, or any other college or university located in Vermont
in a program that leads to an undergraduate certificate, an undergraduate degree,
or a graduate degree;
(ii) at an eligible training institution in a program that leads to a certificate or other
credential recognized by VSAC; or
(iii) at a non-Vermont approved postsecondary education institution approved for Title IV
funding only when the degree program is not available in Vermont;
(D) [Repealed.]
(E) continually demonstrate satisfactory academic progress as determined by criteria established
by the Vermont National Guard and VSAC, in consultation with the educational institution
at which the individual is enrolled under the Program;
(F) have used available post-September 11, 2001 tuition benefits and other federally funded
military tuition assistance; provided, however, that this subdivision shall not apply
to:
(i) tuition benefits and other federally funded military tuition assistance for which
the individual has not yet earned the full amount of the benefit or tuition;
(ii) Montgomery GI Bill benefits;
(iii) post-September 11, 2001 educational program housing allowances;
(iv) federal educational entitlements;
(v) National Guard scholarship grants;
(vi) loans under section 2856 of this title; and
(vii) other nontuition benefits; and
(G) have submitted a statement of good standing to VSAC signed by the individual’s commanding
officer within 30 days prior to the beginning of each semester.
(2) An individual may receive more than one undergraduate certificate, undergraduate degree,
graduate degree, or other credential recognized by VSAC under the Program, provided
that the cost of all certificates, degrees, and credentials received by the individual
under the Program does not exceed an amount equal to twice the full-time in-state
tuition rate charged by UVM for completion of an undergraduate baccalaureate degree.
(d) Service commitment.
(1) For each full academic year of attendance under the Program, a member shall be required
to serve two years in the Vermont National Guard in order to receive the full tuition
benefit under the Program.
(2) If a member’s service with the Vermont National Guard terminates before the member
fulfills this two-year service commitment, other than for good cause as determined
by the Vermont National Guard, the individual shall reimburse VSAC a pro rata portion
of the tuition paid under the Program pursuant to the terms of an interest-free reimbursement
promissory note signed by the individual at the time of entering the Program.
(3) For members participating in the Program on a less than full-time basis, the member’s
service commitment shall be at the rate of one month of Vermont National Guard service
commitment for each credit hour, not to exceed 12 months of service commitment for
a single semester.
(e) Termination of tuition benefit.
(1) The Office of the Vermont Adjutant and Inspector General may terminate the tuition
benefit provided an individual under the Program if:
(A) the individual’s commanding officer revokes the statement of good standing submitted
pursuant to subdivision (c)(7) of this section as a result of an investigation or
disciplinary action that occurred after the statement of good standing was issued;
(B) the individual is dismissed from the educational institution in which the individual
is enrolled under the Program for academic or disciplinary reasons; or
(C) the individual withdraws without good cause from the educational institution in which
the individual is enrolled under the Program.
(2) If an individual’s tuition benefit is terminated pursuant to subdivision (1) of this
subsection, the individual shall reimburse VSAC for the tuition paid under the Program,
pursuant to the terms of an interest-free reimbursement promissory note signed by
the individual at the time of entering the Program; shall be responsible on a pro
rata basis for the remaining tuition cost for the current semester or any courses
in which the individual is currently enrolled; and shall be ineligible to receive
future tuition benefits under the Program.
(3) If an individual is dismissed for academic or disciplinary reasons from any postsecondary
educational institution before receiving tuition benefits under the Program, the Office
of the Adjutant and Inspector General may make a determination regarding the individual’s
eligibility to receive tuition benefits under the Program.
(f) Adoption of policies, procedures, and guidelines.
(1) VSAC, in consultation with the Office of the Adjutant and Inspector General, shall
adopt policies, procedures, and guidelines necessary to implement the provisions of
this section, which shall include eligibility, application, and acceptance requirements,
proration of service requirements for academic semesters or attendance periods shorter
than one year, data sharing guidelines, and the criteria for determining “good cause”
as used in subdivisions (d)(2) and (e)(1)(C) of this section.
(2) Each educational institution participating in the Program shall adopt policies and
procedures for the enrollment of members under the Program. These policies and procedures
shall be consistent with the policies, procedures, and guidelines adopted by VSAC
under subdivision (1) of this subsection.
(g) Reports.
(1) On or before November 1 of each year, the President, Chancellor, or equivalent position
of each educational institution that participated in the Program during the immediately
preceding school year shall report to the Vermont National Guard and VSAC regarding
the number of members enrolled at its institution during that school year who received
tuition benefits under the Program and, to the extent available, the courses or program
in which the members were enrolled.
(2) On or before January 15 of each year, the Vermont National Guard and VSAC shall report
these data and other relevant performance factors, including information pertaining
to the achievement of the goals of this entitlement program and the costs of the Program
to date, to the Governor, the House and Senate Committees on Education, and the House
Committees on Appropriations and on Government Operations and Military Affairs. The
provisions of 2 V.S.A. § 20(d), expiration of reports, shall not apply to the reports to be made under this subsection. (Added 2018, No. 11 (Sp. Sess.), § E.215.1; amended 2019, No. 6, § 85, eff. April 22, 2019; 2019, No. 88 (Adj. Sess.), § 52, eff. March 4, 2020; 2021, No. 140 (Adj. Sess.), § 1, eff. May 27, 2022; 2023, No. 66, § 4, eff. July 1, 2023; 2025, No. 72, § 11, eff. June 27, 2025.)
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Subchapter 005: EDUCATION LOAN PROGRAM
§ 2861. Establishment
There is hereby created an Education Loan Program for the purpose of assisting qualified
students to pursue schooling beyond the secondary level. It is the intention of the
Legislature in establishing the Education Loan Program under this subchapter to serve
Vermont resident students and their families throughout their educational careers;
and to serve nonresident students attending Vermont postsecondary institutions and
the families of those students throughout their educational careers. It is also the
intention of the Legislature that education loans made under this subchapter not be
collateralized at the time of their origination. (Added 1965, No. 198, § 7(a); amended 2003, No. 86 (Adj. Sess.), § 23.)
§ 2862. Rules and regulations
(a) The Board shall adopt rules and regulations and establish policies and procedures
that it deems necessary to carry out the purpose of this subchapter. The rules and
regulations so adopted shall include provisions relating to borrower eligibility,
maximum loan amounts, interest rates, and other charges.
(b) In the case of loans reinsured under the Higher Education Act, the rules and regulations
shall conform to the requirements of that act.
(c) Education loans guaranteed, made, financed, serviced, or otherwise administered by
the Corporation are exempt from the interest rate and charges limitations of 9 V.S.A. §§ 41a and 42, but those rates and charges shall reflect the Corporation’s costs of funds, its
costs of education loan financing and servicing, and the risks associated with different
types of education loans.
(d) Loans made pursuant to the Higher Education Act by institutions doing business in
Vermont shall be made pursuant to this chapter. (Added 1965, No. 198, § 7(b); amended 1967, No. 131, § 8; 1967, No. 371 (Adj. Sess.), § 5, eff. March 27, 1968; 1969, No. 83, § 1, eff. April 18, 1969; 1973, No. 51; 1983, No. 76, § 2; 1987, No. 79, § 2, eff. June 9, 1987; 2003, No. 86 (Adj. Sess.), § 24.)
§ 2863. Guarantee
The Corporation is authorized to guarantee that any education loan notes properly
executed shall be repaid according to their tenor and, if guaranteed under the Higher
Education Act, to the extent authorized under that act, provided, that in the event
of default, the holder has complied with the rules, regulations, and procedures of
the Corporation, and with the Act and the regulations promulgated under the Act, regarding
the making, servicing, and diligent collection of education loans until assigned to
the Corporation as provided in this chapter. The Corporation may make loans that have
no guarantee. (Added 1965, No. 198, § 7(c); amended 1975, No. 170 (Adj. Sess.), § 4; 1993, No. 147 (Adj. Sess.), § 4; 2003, No. 86 (Adj. Sess.), § 25; 2019, No. 131 (Adj. Sess.), § 102.)
§ 2864. Reserve fund
(a) The Corporation shall establish and maintain an allowance for loans not covered by
a federal or other guaranty or insurance, using historical loan delinquency and default
rates and other relevant information. To the extent the reserve fund contains any
monies appropriated by the State, such reserve funds shall be held and administered
in accordance with 32 V.S.A. § 432 and 433. Any such allowance may not be funded from monies appropriated by the General Assembly
to the Corporation unless specifically appropriated for such purposes.
(b) The Corporation is authorized to negotiate and enter into agreement with the U.S.
Secretary of Education to reinsure its guarantee of any loans made under this chapter,
and to amend such agreements, consistent with this chapter. (Added 1965, No. 198, § 7(d); amended 1969, No. 83, § 2, eff. April 18, 1969; 1981, No. 174 (Adj. Sess.), § 4, eff. April 20, 1982; 1993, No. 147 (Adj. Sess.), § 5; 2003, No. 86 (Adj. Sess.), § 26.)
§ 2865. Default
A holder of a loan guaranteed pursuant to this chapter may submit a default claim
to the Corporation for payment when a borrower has failed to make an installment payment
of principal or interest or both when due or to comply with other terms of the note
or other written evidence of agreement, which persists beyond the delinquency period
provided in the Higher Education Act. Upon the holder’s compliance with the servicing
and the default claim filing requirements specified in section 2863 of this chapter,
the Corporation shall pay the holder the amount due as described in section 2863 of this title. Upon reimbursement, the holder shall assign the note to the Corporation, but such
assignment may be without representation or warranty, expressed or implied, and without
recourse. (Added 1965, No. 198, § 7(e); amended 1969, No. 83, § 3, eff. April 18, 1969; 1975, No. 170 (Adj. Sess.), § 5; 1993, No. 147 (Adj. Sess.), § 6; 2003, No. 86 (Adj. Sess.), § 27.)
§ 2866. Rights of minors
A person under 18 years of age shall not be disqualified or lack capacity by reason
of the person’s minority, but shall have the rights, powers, privileges, and obligations
of a person of full age with respect to executing instruments under this subchapter. (1965, No. 198, § 7(f); amended 2003, No. 86 (Adj. Sess.), § 28.)
§ 2867. Reserve and pledged equity funds
(a) The Corporation may create and establish one or more special funds, referred to in
this section as “debt service reserve funds” or “pledged equity funds.”
(b) The Corporation shall pay into each debt service reserve fund:
(1) Any monies appropriated and made available by the State for the purpose of such fund.
(2) Any proceeds of the sale of notes, bonds, or other debt instruments, to the extent
provided in the resolution or resolutions of the Corporation authorizing the issuance
thereof.
(3) Any other monies or financial instruments such as surety bonds, letters of credit,
or similar obligations, that may be made available to the Corporation for the purpose
of such fund from any other source or sources. All monies or financial instruments
held in any debt service reserve fund created and established under this section,
except as provided in this section, shall be used, as required, solely for the payment
of the principal of the bonds, notes, or other debt instruments secured in whole or
in part by such fund or of the payments with respect to the bonds, notes, or other
debt instruments specified in any resolution of the Corporation as a sinking fund
payment, the purchase or redemption of the bonds, the payment of interest on the bonds,
notes, or other debt instruments, or the payment of any redemption premium required
to be paid when the bonds, notes, or other debt instruments are redeemed prior to
maturity, or to reimburse the issuer of a liquidity or credit facility, bond insurance,
or other credit enhancement for the payment by such party of any of the foregoing
amounts on the Corporation’s behalf; provided, however, that the monies or financial
instruments in any such debt reserve fund shall not be drawn upon or withdrawn at
any time in such amounts as would reduce the amount of such funds to less than the
debt service reserve requirement established by resolution of the Corporation for
such fund as provided in this section except for the purpose of paying, when due,
with respect to bonds secured in whole or in part by such fund, the principal, interest,
redemption premiums, and sinking fund payments and reimbursing, when due, the issuer
of any credit enhancement for any such payments made by it, for the payment of which
other monies of the Corporation are not available. Any income or interest earned by,
or increment to, any debt service reserve fund due to the investment thereof may be
transferred by the Corporation to other funds or accounts of the Corporation to the
extent it does not reduce the amount of such debt service reserve fund below the debt
service reserve requirement for such fund.
(c) The Corporation shall pay into each pledged equity fund:
(1) Any monies appropriated and made available by the State for the purpose of such fund.
(2) Any proceeds of the sale of notes, bonds, or other debt instruments, to the extent
provided in the resolution or resolutions of the Corporation authorizing the issuance
thereof.
(3) Any other monies or financial instruments such as surety bonds, letters of credit,
or similar obligations, that may be made available to the Corporation for the purpose
of such fund from any other source or sources. All monies or financial instruments
held in any pledged equity fund created and established under this section, except
as provided in this section, shall be used, as required, solely to provide pledged
equity or over-collateralization of any trust estate of the Corporation to the issuer
of a liquidity or credit facility, bond insurance, or other credit enhancement obtained
by the Corporation; provided, however, that the monies or financial instruments in
any such pledged equity fund shall not be drawn upon or withdrawn from such fund at
any time in such amounts as would reduce the amount of such funds to less than the
pledged equity requirement established by resolution of the Corporation for such fund
as hereafter provided except for the purposes set forth in, and in accordance with,
the governing resolution. Any income or interest earned by, or increment to, any pledged
equity fund due to the investment thereof may be transferred by the Corporation to
other funds or accounts of the Corporation to the extent it does not reduce the amount
of such pledged equity fund below the requirement for such fund. Anything in this
subdivision to the contrary notwithstanding, upon the defeasance of the bonds, notes,
or other debt instruments with respect to which the pledged equity requirement was
established, the Corporation may transfer amounts in such fund to another fund or
account of the Corporation proportionately to the amount of such defeasance, provided
that the Corporation shall repay to the State any amount appropriated by the State
pursuant to subsection (f) of this section.
(d) The debt service reserve and pledged equity requirements for any fund established
under this section shall be established by resolution of the Corporation prior to
the issuance of any bonds, notes, or other debt instruments secured in whole or in
part by a debt service reserve fund or prior to entering into any credit enhancement
agreement and shall be the amount determined by the Corporation to be reasonably required
in light of the facts and circumstances of the particular debt issue or credit enhancement;
provided that the maximum amount of the State’s commitment with respect to any pledged
equity fund shall be determined by the Corporation at or prior to entering into any
credit enhancement agreement related to such pledged equity fund. The Corporation
shall not at any time issue bonds, notes, or other debt instruments secured in whole
or in part by a debt service reserve fund or enter into any credit enhancement agreement
that requires establishment of a pledged equity fund created and established under
this section unless:
(1) the Corporation at the time of such issuance or execution shall deposit in such fund
from the proceeds of such bonds, notes, or other debt instruments, or from other sources,
an amount that, together with the amount then in such fund, will not be less than
the requirement established for such fund at that time;
(2) the Corporation has made a determination at the time of the authorization of the issuance
of such bonds, notes, or other debt instruments, or entering into such credit enhancement
agreement that the Corporation will derive revenues or other income from the education
loans that secure such bonds, notes, or other debt instruments or that relate to any
credit enhancement agreement sufficient to provide, together with all other available
revenues and income of the Corporation, other than any amounts appropriated by the
State pursuant to this section, for the payment of such bonds, notes, and other debt
instruments and reimbursement to the issuer of any credit enhancement, the payment
of any expected deposits into any pledged equity fund established with respect to
such credit enhancement and the payment of all costs and expenses incurred by the
Corporation with respect to the program or purpose for which such bonds, notes, or
other debt instruments are issued; and
(3) the State Treasurer or his or her designee has provided written approval to the Corporation
that the Corporation may issue such bonds, notes, or other debt instruments and enter
into any related credit enhancement agreement.
(e) In computing the amount of the debt service reserve or pledged equity funds for the
purpose of this section, securities in which all or a portion of such funds shall
be invested shall be valued at par if purchased at par or at amortized value, as such
term is defined by resolution of the Corporation, if purchased at other than par.
(f) In order to ensure the maintenance of the debt service reserve fund requirement in
each debt service reserve fund established by the Corporation under this section,
there may be appropriated annually and paid to the Corporation for deposit in each
such sum as shall be certified by the Chair of the Corporation to the Governor, the
President of the Senate, and the Speaker of the House as is necessary to establish
or restore each such debt service reserve fund to an amount equal to the requirement
for each such fund. The Chair shall annually, on or about February 1, make, execute,
and deliver to the Governor, the President of the Senate, and the Speaker of the House,
a certificate stating the sum required to restore each such fund to the amount equal
to the requirement for each such fund, and the Governor shall, on or before March
1, submit a request for appropriations in the amount so certified, and such amount
may be appropriated, and if appropriated, shall be paid to the Corporation during
the then current State fiscal year. In order to ensure the funding of the pledged
equity fund requirement in each pledged equity fund established by the Corporation
under this section at the time and in the amount determined at the time of entering
into any credit enhancement agreement related to a pledged equity fund, there may
be appropriated and paid to the Corporation for deposit in each such fund, such sum
as shall be certified by the Chair of the Corporation, to the Governor, the President
of the Senate, and the Speaker of the House, as is necessary to establish each such
pledged equity fund to an amount equal to the amount determined by the Corporation
at the time of entering into any credit enhancement agreement related to a pledged
equity fund, provided that the amount requested, together with any amounts previously
appropriated pursuant to this subsection for a particular pledged equity fund, shall
not exceed the maximum amount of the State’s commitment, as determined by the Corporation
pursuant to subsection (d) of this section. The Chair shall, on or about the February
1 next following the designated date for fully funding a pledged equity fund, make,
execute, and deliver to the Governor, the President of the Senate, and the Speaker
of the House a certificate stating the sum required to bring each such fund to the
amount equal to the requirement for each such fund or to otherwise satisfy the State’s
commitment with respect to each such fund, and the Governor shall, on or before March
1, submit a request for appropriations in the amount so certified, and such amount
may be appropriated, and if appropriated, shall be paid to the Corporation during
the then-current State fiscal year. The combined principal amount of bonds, notes,
and other debt instruments outstanding at any time and secured in whole or in part
by a debt service reserve fund established under this section and the aggregate commitment
of the State to fund pledged equity funds pursuant to this subsection shall not exceed
$50,000,000.00, provided that the foregoing shall not impair the obligation of any
contract or contracts entered into by the Corporation in contravention of the Constitution
of the United States. Notwithstanding anything in this section to the contrary, the
State’s obligation with respect to funding any pledged equity fund shall be limited
to its maximum commitment, as determined by the Corporation pursuant to subsection
(d) of this section and the State shall have no other obligation to replenish or maintain
any pledged equity fund. (Added 2009, No. 2, § 1, eff. March 31, 2009; amended 2011, No. 40, § 55a, eff. May 20, 2011; 2019, No. 131 (Adj. Sess.), § 103.)
§ 2868. Notes, bonds, and other obligations
(a) Power to issue obligations. The Corporation may issue its negotiable notes, bonds, and other obligations in such
principal amount as the Corporation determines necessary to provide sufficient funds
for the availability of loans for educational purposes. The notes, bonds, and other
obligations may be issued in taxable form or nontaxable form, or both. The taxability
of one series shall not affect the taxability of any other series, nor shall the issuance
of taxable obligations be deemed a waiver of the right of this State or the Corporation
to issue nontaxable obligations.
(b) Repayment. The Corporation may make payment of the principal of and interest on its notes, bonds,
and other obligations and may determine the funding, refunding, or renewal of the
reserves and sinking funds to secure the notes, bonds, and other obligations, and
all other expenditures of the Corporation incident to and necessary or convenient
to carry out such corporate purpose, including costs of issuance of such debt. The
Corporation may contract with any person, including the State of Vermont or the United
States, or any of their agencies or instrumentalities, to guarantee all or a part
of the principal of or interest on the Corporation’s obligations or on the education
loans made, purchased, guaranteed, or serviced by the Corporation.
(c) Power to determine nature of debt obligations. In furtherance of its corporate purposes, with respect to the issuance of its notes,
bonds, and other debt obligations, the Corporation may by resolution provide:
(1) for the pledging or granting of a security interest in all or a portion of its property
and revenues, including the granting of security interests of differing priorities
in education loans and the revenues associated therewith, subject to such agreements
as may then exist with holders of the Corporation’s notes, bonds, or other obligations;
(2) the terms upon which payments are to be made upon such notes, bonds, and other obligations
by the Corporation;
(3) the form of such notes, bonds, and other obligations, which may include “book entry”
if the Corporation so determines;
(4) the conditions upon which such notes, bonds, and other obligations may be transferred;
and
(5) for limitations on the Corporation’s issuance of additional notes, bonds, or other
debt obligations, and on the expenditure of revenues related to them; and upon the
refunding of its outstanding or other notes, bonds, or other obligations.
(d) Nonenumerated powers. The Corporation has the power to exercise all or part of a combination of the powers
granted in this chapter; to make covenants other than and in addition to, but not
inconsistent with, the covenants expressly authorized in this section; to make such
covenants and to do any and all acts and things as may be necessary or prudent to
adequately secure its notes, bonds, or other obligations or as will tend to make its
notes, bonds, and other obligations more marketable notwithstanding that such covenants,
acts, or things are not enumerated in this section.
(e) Pledges. Any pledge made by the Corporation shall be valid and binding from the time when the
pledge is made; the revenues, monies, or property so pledged and thereafter received
by the Corporation shall immediately be subject to the lien of the pledge without
any physical delivery of it or further act. That pledge shall be valid and binding
as against all parties having claims of any kind in tort, contract, or otherwise against
the Corporation, irrespective of whether those parties have notice of it.
(f) Indemnification. Neither the members of the Board nor executive officers of the Corporation nor any
other person executing the Corporation’s notes, bonds, or other obligations shall
be subject to any personal liability or accountability by reason of the issuance of
such notes, bonds, or other obligations.
(g) Fully negotiable instruments. Notwithstanding any provision of law to the contrary, a bond, note, or other obligation
issued under this chapter is fully negotiable for all purposes of 9A V.S.A. § 1-101 et seq., and each holder or owner of such, or of any coupon appurtenant to them,
by accepting the bond or note or other obligation or coupon shall be conclusively
deemed to have agreed that such instrument is fully negotiable for those purposes,
and all bonds, notes, or other obligations and interest coupons appertaining to them
issued by the Corporation shall have and are hereby declared to have all the qualities
and incidents of investment securities under 9A V.S.A. § 1-101 et seq., but no provision of those sections respecting the filing of a financing
statement to perfect a security interest shall be applicable to any pledge made or
security interest created in connection with the issuance of the bonds, notes, other
obligations, or coupons.
(h) No impairment by the State. The State does hereby pledge to and agree with the holders of the notes, bonds, and
other obligations issued under this chapter that the State will not limit or restrict
the rights hereby vested in the Corporation to perform its obligations and to fulfill
the terms of any agreement made with the holders of its bonds or notes or other obligations.
Neither will the State in any way impair the rights and remedies of the holders until
the notes and bonds and other obligations, together with interest on them, and interest
on any unpaid installments of interest, are fully met, paid, and discharged. The Corporation
is authorized to execute this pledge and agreement of the State in any agreement with
the holders of the notes or bonds or other obligations.
(i) No liability of the State. Notes, bonds, or other obligations issued under the provisions of this chapter shall
not be deemed to constitute a debt or liability or obligation of the State of Vermont
or of any political subdivision of it, nor shall it be deemed to constitute a pledge
of the faith and credit of the State or of any political subdivision, but shall be
payable solely from the revenues or assets of the Corporation pledged to support them.
Each obligation issued by the Corporation shall contain on its face a statement to
the effect that the Corporation shall not be obligated to pay the same nor the interest
on it except from the revenues or assets pledged for those purposes and that neither
the faith and credit nor the taxing power of the State of Vermont or of any political
subdivision of it is pledged to the payment of the principal of or the interest on
these obligations.
(j) Legal investment. Notwithstanding any provision of law to the contrary, the State and all public officers,
governmental units, and agencies of the State; all banks, trust companies, savings
banks and institutions, building and loan associations, savings and loan associations,
investment companies, and other persons carrying on a banking business; all insurance
companies, insurance associations, and other persons carrying on an insurance business;
all credit unions; and all executors, administrators, guardians, trustees, and other
fiduciaries may legally invest any sinking funds, monies, or other funds belonging
to them or within their control in any bonds or notes or other obligations issued
under this chapter, and the bonds or notes or other obligations are authorized security
for any and all public deposits.
(k) Role of the Corporation. The Corporation is designated as the guarantor, servicer, and secondary loan market
for all educational loans in this State.
(l) 8 V.S.A. Chapter 73 inapplicable. Notwithstanding any general or special law to the contrary, the provisions of 8 V.S.A.
chapter 73 (licensed lenders, mortgage brokers, mortgage loan originators, sales finance
companies, and loan solicitation companies) shall not apply to the Corporation or
to any loan made, purchased, or guaranteed pursuant to this chapter.
(m) Interest rate exchange agreements. The Corporation may enter into one or more agreements for the exchange of interest
rates, cash flows, or payments, to reduce net borrowing costs, achieve desirable net
effective interest rates in connection with its issuance and sale of debt obligations,
and to provide for an efficient means of debt management. (Added 1981, No. 174 (Adj. Sess.), § 5, eff. April 20, 1982; amended 1985, No. 24, § 1, eff. April 26, 1985; 1989, No. 29, § 1 eff. April 26, 1989; 1993, No. 147 (Adj. Sess.), § 7; 2019, No. 131 (Adj. Sess.), § 104; 2021, No. 20, § 64.)
§ 2869. Loan cancellation; mathematics, science, and computer science teachers
(a) Loans obtained under this subchapter may be partially or completely cancelled and
forgiven for a borrower who is employed for a complete academic school year as a full-time
licensed teacher:
(1) in a Vermont elementary or secondary school that is approved by the State Board; and
(2) in the subject area of mathematics, science, or computer science during a year when
there is a critical shortage of licensed teachers in that area.
(b) Annually, the Board of the Corporation shall determine, after consultation with the
Secretary, whether a critical shortage of licensed teachers exists in each of the
subject areas of mathematics, science, and computer science.
(c) The Board shall determine the amount of loan to be cancelled for each complete academic
year of teaching service. The amount cancelled for each year shall not exceed 25 percent
of the original principal amount plus any accrued interest.
(d) This section is subject to the availability of funds specifically appropriated for
loan cancellations under this section. (Added 1983, No. 76, § 1; amended 1989, No. 118, § 3; 2003, No. 86 (Adj. Sess.), § 29; 2013, No. 92 (Adj. Sess.), § 188, eff. Feb. 14, 2014.)
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Subchapter 007: VERMONT HIGHER EDUCATION INVESTMENT PLAN
§ 2875. Findings and intent
(a) The general welfare and well-being of the State are directly related to the educational
levels and skills of its citizens.
(b) It is the policy of the State to advance postsecondary education opportunities by
using the State’s limited resources in an effective, efficient, and equitable manner.
(c) Given the cost of postsecondary education to students, families, and the taxpayers
of the State, it is in the public interest of the State to support supplemental means
that enable its citizens to pursue their educational aspirations.
(d) It is a valid and vital public purpose to create a means of encouraging the savings
and investing of funds for future postsecondary education, in compliance with the
Internal Revenue Code of 1986, as amended.
(e) The implementation of the Vermont Higher Education Investment Plan as provided by
this subchapter furthers this public purpose. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2013, No. 92 (Adj. Sess.), § 189, eff. Feb. 14, 2014.)
§ 2876. Definitions
As used in this subchapter, except where the context clearly requires another interpretation:
(1) “Beneficiary” means any individual designated by a participation agreement to benefit
from payments for qualified postsecondary education costs.
(2) “Benefits” means the payment of qualified postsecondary education costs on behalf
of a beneficiary from a participant’s investment plan account.
(3) “Corporation” means Vermont Student Assistance Corporation.
(4) “Internal Revenue Code” means the federal Internal Revenue Code of 1986, as amended,
together with the regulations promulgated pursuant to that Code.
(5) “Qualified postsecondary education costs” means the costs of tuition and fees for
attendance at an approved postsecondary education institution, and other qualified
higher education expenses as provided under 26 U.S.C. § 529.
(6) “Approved postsecondary education institution” means a postsecondary education institution
as defined in section 2822 of this title.
(7) “Vermont Higher Education Investment Plan” or “Investment Plan” means one or more
plans created pursuant to this subchapter.
(8) “Participant” means a person who has entered into a participation agreement pursuant
to this subchapter intended for the payment of qualified postsecondary education costs
on behalf of a beneficiary.
(9) “Participation agreement” means an agreement between a participant and the Corporation,
pursuant to and conforming with the requirements of this subchapter. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 51, § 16, eff. Jan. 1, 2019; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2877. Vermont Higher Education Investment Plan created
(a) There is created a program of the State to be known as the Vermont Higher Education
Investment Plan and a trust for that purpose to be administered by the Vermont Student
Assistance Corporation as an instrumentality of the State. The program may consist
of one or more different investment plans, including one or more plans that may be
offered to a participant only with the assistance of a qualified financial advisor.
(b) In order to establish and administer the Investment Plan, the Corporation, in addition
to its other powers and authority, shall have the power and authority to:
(1) Develop and implement educational programs and related informational materials for
participants and their families. Special efforts shall be made to contact families
with young children and to reach individuals whose access to higher education opportunities
has been limited.
(2) Enter into agreements with any approved postsecondary education institution, the State,
or any federal or other agency or entity as required for the operation of an Investment
Plan pursuant to this subchapter.
(3) Accept any grants, gifts, legislative appropriations, and other monies from the State;
any unit of federal, State, or local government; or any other person, firm, partnership,
or corporation for contribution to the account of the Investment Plan, or for the
operation or other related purposes of the Corporation.
(4) Invest the funds received from participants in appropriate investment vehicles approved
and held in trust for participants by the Corporation as selected by the participants,
including education loans made by the Corporation.
(5) Enter into participation agreements with participants.
(6) Develop and use two or more types of participation agreements to provide a range of
investment options for participants.
(7) Make payments as directed by the participants pursuant to participation agreements.
(8) Make refunds to participants upon the termination of participation agreements pursuant
to the provisions, limitations, and restrictions set forth in this subchapter and
the rules, policies, and procedures adopted by the Corporation.
(9) Make provision for the payment of costs of administration and operation of an Investment
Plan subject to the limitations on charges on participation agreements established
in subdivision 2878(5) of this title.
(10) Adopt rules, policies, and procedures to implement this subchapter and take all necessary
action to ensure an Investment Plan is in conformance with the Internal Revenue Code
and other applicable law.
(11) Effectuate and carry out all of the powers granted by this subchapter, and have all
other powers necessary to carry out and effectuate the purposes, objectives, and provisions
of this subchapter pertaining to the Investment Plan Program, including the power
to:
(A) carry out studies and projections in order to advise participants regarding present
and estimated future postsecondary education costs and levels of financial participation
in the Plan required in order to enable participants to achieve their educational
funding objectives; and
(B) procure insurance, guarantees, or other protections against any loss in connection
with the assets or activities of the investment plan. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2013, No. 92 (Adj. Sess.), § 190, eff. Feb. 14, 2014; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2878. Participation agreements for Investment Plan
The Corporation shall have the authority to enter into Investment Plan participation
agreements with participants pursuant to the provisions of this subchapter, including
the following terms and agreements:
(1) A participation agreement shall stipulate the terms and conditions of the Investment
Plan to which the participant makes contributions.
(2) A participation agreement shall clearly specify the method for calculating the return
on the various investment options available and shall reference the relevant expenses
and other pertinent information about the account.
(3) The execution of a participation agreement by the Corporation shall not guarantee
in any way that postsecondary education costs will be equal to projections and estimates
provided by the Corporation or that the beneficiary named in any participation agreement
will be admitted to an institution of postsecondary education.
(4) A participation agreement shall clearly and prominently disclose to participants the
risks associated with the various investment options available under the applicable
Investment Plan.
(5) Participation agreements shall be organized and presented in a way and with language
that is easily understandable by the general public. A participation agreement shall
clearly and prominently disclose to participants that the Corporation, the State,
and any other governmental entity are not liable for, nor guarantee the return of
or on the participant’s contributions to an Investment Plan. A participation agreement
shall also clearly and prominently disclose to participants the existence of any load
charge or similar charge assessed against the accounts of the participants for administration,
operation, or services. No fee or similar charge may be imposed with regard to an
investment managed by the Corporation. Any fee, load, or similar charge with regard
to any investment not managed by the Corporation shall be no greater than the cost
determined by the Corporation to be required to administer the investment. The cost
of originating and servicing any education loans made or acquired pursuant to participation
agreements shall not be considered as load charges or similar charges.
(6) Any investment advisory or management contract used with respect to a participation
agreement shall be competitively bid pursuant to guidelines established by the Secretary
of Administration. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2878a. Participation agreements for Investment Plan; Vermont Matched Savings Program
The Corporation may participate in the Vermont Matched Savings Program established
under 33 V.S.A. § 1123, in accordance with the rules of the Agency of Human Services adopted thereunder,
in connection with an individual or family who, at the time of contributing funds
into an account created pursuant to a Vermont Higher Education Investment Plan, receives
public assistance or is otherwise an eligible saver under 33 V.S.A. § 1123. (Added 1999, No. 147 (Adj. Sess.), § 1a; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 154 (Adj. Sess.), §§ E.323, E.605.4, eff. Oct. 2, 2020.)
§ 2879. Investment and payments
All money paid by a participant in connection with a participation agreement shall
be credited to the participant’s account as received, held by the Corporation in trust
for the benefit of the participant, and shall be promptly invested by the Corporation
as selected by the participant from the investment options available under the participation
agreement. Contributions and earnings accumulated in a participant’s Investment Plan
account may be used as provided in the participation agreement, including for payments
of qualified postsecondary education costs. The trust shall continue in existence
as long as it holds any funds belonging to a participant. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2879a. Cancellation of participation agreements
(a) Any participant may cancel a participation agreement at will, and any return of funds
from the participant’s account shall be subject to terms and conditions established
by the Corporation, provided that any penalties levied as a result comply with the
provisions of the Internal Revenue Code or Title 32 relating to Investment Plans.
(b) The Corporation may provide by rule that no termination penalty shall apply in certain
circumstances. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 51, § 17, eff. Jan. 1, 2019.)
§ 2879b. Effect of payments in computation and determination of financial aid need
Amounts available for the payment of postsecondary education costs pursuant to the
Investment Plan shall be considered family assets of the beneficiary in determining
need and eligibility for student aid as determined by applicable law. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001.)
§ 2879c. Tax exemption
(a) The assets of the Vermont Higher Education Investment Plan held by the Corporation
and the assets of any similar plan qualified under Section 529 of the Internal Revenue Code and any income from them shall be exempt from all taxation by the State or any of
its political subdivisions. Income earned or received from the Fund by any participant
or beneficiary shall not be subject to State income tax and shall be eligible for
any benefits provided in accordance with the Investment Plan provisions of the Internal
Revenue Code. The exemption from taxation under this section shall apply only to assets
and income maintained, accrued, or expended pursuant to the requirements of the Vermont
Higher Education Investment Plan, the provisions of this subchapter, and the applicable
provisions of the Internal Revenue Code. No exemption shall apply to assets and income
expended for any other purposes.
(b) Contributions to an account held under a Vermont Higher Education Investment Plan
that is provided directly by the Corporation to a participant shall be eligible for
a credit against Vermont income tax as provided under 32 V.S.A. § 5825a. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. Jan. 1, 1999; amended 2001, No. 58, § 4, eff. June 16, 2001; 2003, No. 65, § 1; 2019, No. 131 (Adj. Sess.), § 106; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2879d. Property rights to assets in the Plan
The assets of the Vermont Higher Education Investment Plan shall at all times be held
in trust for the benefit of the participant, shall not be commingled with any other
funds of the Corporation or the State, shall be preserved, invested, and expended
solely and only for the purposes set forth in this chapter and in accordance with
the participation agreements, and no property rights in them shall exist in favor
of the Corporation or the State. Amounts held in, or withdrawn from, a participant’s
Investment Plan account under a participation agreement shall not be subject to liens,
attachment, garnishment, levy, seizure, claim by creditors of the contributors, participants,
or any beneficiary, or subject to any involuntary sale, transfer, or assignment by
any execution or any other legal or equitable operation of law, including bankruptcy
or insolvency laws. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2001, No. 58, § 4, eff. June 16, 2001; 2019, No. 154 (Adj. Sess.), § E.605.4, eff. Oct. 2, 2020.)
§ 2879e. Construction and application
This subchapter shall be construed liberally in order to effectuate its legislative
intent. The purposes of this subchapter and all provisions of this subchapter with
respect to powers granted shall be broadly interpreted to effectuate such intent and
purposes and not as to any limitation of powers. This subchapter shall be interpreted
and enforced in a manner that shall achieve this public purpose in compliance with
the applicable provisions of the Internal Revenue Code, except to the extent the Code
is inconsistent with the provisions of 32 V.S.A. § 5825a. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2019, No. 51, § 18, eff. Jan. 1, 2019.)
§ 2879f. Annual reports
The Corporation shall review, on an annual basis, the financial status of the Program
and the participation rate in the Program. The Corporation shall also review the continued
viability of the Program and the administration of the Program by the Corporation. (Added 1997, No. 79 (Adj. Sess.), § 1, eff. July 1, 1997; amended 2009, No. 33, § 38.)
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Subchapter 008: VERMONT UNIVERSAL CHILDREN'S HIGHER EDUCATION SAVINGS ACCOUNT PROGRAM
§ 2880. Definitions
As used in this subchapter:
(1) “Approved postsecondary education institution” means any institution of postsecondary
education that is:
(A) certified by the State Board of Education as provided in section 176 or 176a of this title;
(B) accredited by an accrediting agency approved by the U.S. Secretary of Education pursuant
to the Higher Education Act;
(C) a non-U.S. institution approved by the U.S. Secretary of Education as eligible for
use of education loans made under Title IV of the Higher Education Act; or
(D) a non-U.S. institution designated by the Corporation as eligible for use of its grant
awards.
(2) “Committee” means the Vermont Universal Children’s Higher Education Savings Account
Program Fund Advisory Committee.
(3) “Corporation” means Vermont Student Assistance Corporation.
(4) “Eligible child” means a minor who is a Vermont resident at the time the Corporation
deposits or allocates funds pursuant to this subchapter for his or her benefit.
(5) “Postsecondary education costs” means the qualified costs of tuition, fees, and other
expenses for attendance at an institution of postsecondary education, as defined in
the Internal Revenue Code of 1986, as amended, together with the regulations promulgated
under that Code.
(6) “Program” means the Vermont Universal Children’s Higher Education Savings Account
Program.
(7) “Program beneficiary” means an individual who is or who was at one time an eligible
child for whom the Corporation deposited or allocated funds pursuant to this subchapter
and who has not yet attained 29 years of age or, for national service program participants,
the extended maturity date.
(8) “Program Fund” means the Vermont Universal Children’s Higher Education Savings Account
Program Fund.
(9) “Vermont Higher Education Investment Plan” or “Investment Plan” means the plan created
pursuant to subchapter 7 of this chapter.
(10) “Vermont resident” means an individual who is domiciled in Vermont as evidenced by
the individual’s intent to maintain a principal dwelling place in Vermont indefinitely
and to return there if temporarily absent, coupled with an act or acts consistent
with that intent. A minor is a Vermont resident if his or her parent or legal guardian
is a Vermont resident, unless a parent or legal guardian with sole legal and physical
parental rights and responsibilities lives outside the State of Vermont. (Added 2015, No. 45, § 2; amended 2019, No. 131 (Adj. Sess.), § 108.)
§ 2880a. Vermont Universal Children’s Higher Education Savings Account Program established;
powers and duties of the Vermont Student Assistance Corporation
(a) It is the policy of the State to expand educational opportunity for all children.
Consistent with this policy, the Vermont Student Assistance Corporation shall partner
with one or more foundations or other philanthropies to establish and fund the Vermont
Universal Children’s Higher Education Savings Account Program to expand educational
opportunity and financial capability for Vermont children and their families.
(b) Pursuant to this subchapter, the Corporation shall establish and administer the Program,
which shall include the Vermont Universal Children’s Higher Education Savings Account
Program Fund and financial education for Program beneficiaries and their families
and legal guardians. The Corporation, in addition to its other powers and authority,
shall have the power and authority to adopt rules, policies, and procedures, including
those pertaining to residency in the State, to implement this subchapter in conformance
with federal and State law.
(c) The Vermont Departments of Health and of Taxes and the Vermont Agencies of Education
and of Human Services shall enter into agreements with the Corporation to enable the
exchange of such information as may be necessary for the efficient administration
of the Program.
(d) The Corporation’s obligations under this subchapter are limited to funds deposited
in the Program Fund specifically for the purpose of the Program.
(e) The Corporation shall annually on or before January 15 release a written report with
a detailed description of the status and operation of the Program and management of
accounts. (Added 2015, No. 45, § 2.)
§ 2880b. Vermont Universal Children’s Higher Education Savings Account Program Fund
(a) The Vermont Universal Children’s Higher Education Savings Account Program Fund is
established as a fund to be held, directed, and administered by the Corporation. The
Corporation shall invest and reinvest, or cause to be invested and reinvested, funds
in the Program Fund for the benefit of the Program.
(b) The following sources of funds shall be deposited into the Program Fund:
(1) any grants, gifts, and other funds intended for deposit into the Program Fund from
any individual or private or public entity, provided that contributions may be limited
in application to specified age cohorts of beneficiaries; and
(2) all interest, dividends, and other pecuniary gains from investment of funds in the
Program Fund.
(c) Funds in the Program Fund shall be used solely to carry out the purposes and provisions
of this subchapter, including payment by the Corporation of the administrative costs
of the Program and the Program Fund and of the costs associated with providing financial
education to benefit Program beneficiaries and their parents and legal guardians.
Funds in the Program Fund may not be transferred or used by the Corporation or the
State for any purposes other than the purposes of the Program. (Added 2015, No. 45, § 2.)
§ 2880c. Initial deposits to the Program Fund
(a) Each year, the Corporation shall deposit $250.00 into the Program Fund for each eligible
child born that year, beginning on or after January 1, 2016.
(b) In addition, if the eligible child has a family income of less than 250 percent of
the federal poverty level at the time the deposit under subsection (a) of this section
is made, the Corporation shall make an additional deposit into the Program Fund for
the child that is equal to the deposit made under subsection (a).
(c) Notwithstanding subsections (a) and (b) of this section, if the available funds in
a given calendar year are insufficient to provide for the maximum deposits under this
section, the Corporation shall prorate the deposits accordingly. (Added 2015, No. 45, § 2.)
§ 2880d. Vermont Higher Education Investment Plan accounts; matching allocations for families
with limited income
(a) The Corporation shall invite the parents or legal guardians of each Program beneficiary
to open a Vermont Higher Education Investment Plan account on the beneficiary’s behalf.
(b) The beneficiary, his or her parents or legal guardians, other individuals, and private
and public entities may make additional deposits into a beneficiary’s Investment Plan
account.
(c) Annually, the Corporation shall deposit into the Program Fund a matching allocation
of up to $250.00 per eligible child on a dollar-to-dollar basis for contributions
made that year to a single Investment Plan account established for the child under
this section, provided that at the time of deposit, the eligible child has a family
income of less than 250 percent of the federal poverty level.
(d) Notwithstanding subsection (c) of this section, if the available funds in a given
calendar year are insufficient to provide for the maximum allocation amounts under
this subsection, the Corporation shall prorate the allocations accordingly. (Added 2015, No. 45, § 2.)
§ 2880e. Withdrawal of Program funds
(a) Subject to the provisions of this section, the Investment Plan requirements under
subchapter 7 of this chapter, and the rules, policies, and procedures adopted by the
Corporation, a Program beneficiary shall be entitled to Program funds deposited or
allocated by the Corporation for his or her benefit if:
(1) the beneficiary has attained 18 years of age or has enrolled full-time in an approved
postsecondary education institution;
(2) the Corporation has sufficient proof that the beneficiary was an eligible child at
the time the deposit or allocation was made;
(3) the funds are used for postsecondary education costs and made payable to an approved
postsecondary education institution on behalf of the beneficiary; and
(4) the withdrawal is made prior to the beneficiary’s attaining 29 years of age, provided
that for a beneficiary who serves in a national service program, including in the
U.S. Armed Forces, AmeriCorps, or the Peace Corps, each month of service shall increase
the maturity date by one month.
(b) If a Program beneficiary does not use all of the funds deposited or allocated by the
Corporation for his or her use prior to the maturity date, the beneficiary shall no
longer be permitted to use these funds and the Corporation shall unallocate the unused
funds from the beneficiary within the Program Fund.
(c) This section shall not apply to withdrawal of funds that are contributed to an Investment
Plan account opened for the benefit of the account’s beneficiary under subsections
2880d(a) and (b) of this title and that are not Program funds deposited or allocated
by the Corporation. (Added 2015, No. 45, § 2.)
§ 2880f. Rights of beneficiaries and their families
(a) A parent or legal guardian shall be allowed to opt out of the Program on behalf of
his or her child.
(b) An individual otherwise eligible for any benefit program for elders, persons who are
disabled, families, or children shall not be subject to any State resource limit based
on funds deposited, allocated, or contributed on behalf of an eligible child or Program
beneficiary to the Program Fund or an Investment Plan. (Added 2015, No. 45, § 2.)
§ 2880g. Financial literacy programs
State agencies and offices, including the Agencies of Education and of Human Services
and the Office of the State Treasurer, in collaboration with existing statewide community
partners and nonprofit partners that specialize in financial education delivery and
have developed an available infrastructure to support financial education across multiple
sectors, shall develop and support programs to encourage the financial literacy of
Program beneficiaries and their families and legal guardians throughout the duration
of the Program via mail, mass media, and in-person delivery methods. (Added 2015, No. 45, § 2.)
§ 2880h. Program Fund Advisory Committee
(a) There is created a Vermont Universal Children’s Higher Education Savings Account Program
Fund Advisory Committee to identify and solicit public and private funds for the Program
and to advise the Corporation on disbursement of funds.
(b) The Committee shall be composed of the following 11 members:
(1) the Governor or designee, ex officio;
(2) the President of the Corporation or designee, ex officio;
(3) two representatives of the Vermont philanthropy community, appointed by the Governor;
(4) two representatives of the Vermont business community, appointed by the Governor;
(5) two members from Vermont advocacy organizations representing individuals and families
with limited income, appointed by the Governor; and
(6) three members selected by the Committee.
(c) Non-ex-officio members shall serve four-year terms, appointed and selected in such
a manner that no more than three terms shall expire annually. (Added 2015, No. 45, § 2.)