The Vermont Statutes Online

Title 16: Education

Chapter 087: GRANTS, SCHOLARSHIPS, AND EDUCATION LOAN PROGRAMS

• 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 [Effective July 1, 2025]

  (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.)

• 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.)

• 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.)

• Subchapter 004: HONOR SCHOLARSHIPS

• § 2851. Establishment

  Vermont Honor Scholarships are hereby established for secondary school seniors who plan to attend an approved postsecondary education institution. (Added 1965, No. 198, § 6(a); amended 1999, No. 24, § 2, eff. May 19, 1999; 2003, No. 86 (Adj. Sess.), § 17.)

• § 2852. Eligibility

  (a) All resident, qualified secondary school seniors are eligible to be nominated by their secondary school for a Vermont Honor Scholarship.

  (b) Vermont Honor Scholarships shall be awarded on the basis of merit as demonstrated by scholastic excellence and participation in extracurricular and community service activities to be determined by such criteria as the Board shall prescribe. (Added 1965, No. 198, § 6(b), (c); amended 1999, No. 24, § 3, eff. May 19, 1999; 2003, No. 86 (Adj. Sess.), § 18.)

• § 2853. Application

  A qualified student may be awarded an Honor Scholarship without affecting eligibility for an incentive grant. The Honor Scholarship amount shall not be considered in determining the calculation of the initial amount of the grant, unless the student’s total grant and scholarship assistance from all sources exceeds the cost of attendance as defined under the Higher Education Act. (Added 1965, No. 198, § 6(f); amended 2003, No. 86 (Adj. Sess.), § 19.)

• § 2854. Amount; number; disbursement

  (a) Each Vermont Honor Scholarship shall be an equal amount and no less than $1,000.00 as determined by the Board.

  (b) Each secondary school, or a border school serving Vermont secondary school students, may nominate a senior for a Vermont Honor Scholarship.

  (c) The Scholarship shall be disbursed to the approved postsecondary education institution at which the recipient enrolls. (Added 1965, No. 198, § 6(d), (e); amended 1999, No. 24, § 4, eff. May 19, 1999; 2003, No. 86 (Adj. Sess.), § 20.)

• 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. 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. 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 at UVM, a Vermont State College, or any other college or university located in Vermont in a program that leads to an undergraduate certificate or degree or at an eligible training institution in a program that leads to a certificate or other credential recognized by VSAC;

  (D) have not previously earned an undergraduate bachelor’s degree;

  (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 or other credential recognized by VSAC under the Program, provided that the cost of all certificates and credentials received by the individual under the Program does not exceed 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 General, Housing, 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.)

• 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.)

• Subchapter 006: PART-TIME STUDENT GRANTS.

• §§ 2871-2873. Repealed. 2003, No. 86 (Adj. Sess.), § 30.

• 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.)

• 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.)