VSAC Takes Issue with VTC President Handy
By Irene Racz
Director of Public Affairs
Vermont Student Assistance Corporation

The political forum held at Vermont Technical College on Oct. 5, which was moderated by VTC President Ty Handy and reported by the Herald on Oct. 12, led to the dissemination of a great deal of misleading information about Vermont’s policy of student grant portability. I’d like to share the facts with your readers:

Vermont isn’t the only state to allow its grant recipients to use their funding out of state. A number of others, including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, Rhode Island, Pennsylvania and the District of Columbia, have reciprocity policies allowing their grants to be used outside their borders. Since most Vermonters who leave the state to attend college stay in the Northeast, Vermont is not at a disadvantage in allowing its grant recipients to use their grants elsewhere.

It is not the case that 25% of Vermont’s higher education tax dollars are flowing to out-of-state colleges as a result of portability. In 2005-06, 77.7% ($63.8 million) of state higher education funding went to our public institutions, including the University of Vermont and the Vermont State Colleges, and the remaining 22.3% ($18.3 million) went to the Vermont Student Assistance Corporation to distribute in the form of student grants.

Of the money appropriated to VSAC, 71.2% went to students attending college in Vermont, 15.9% went to students attending in other states with grant reciprocity, and 12.9% went to students attending in other states without grant reciprocity.

VSAC policy specifies that a student cannot receive a larger grant to go outside Vermont than he/she would receive to attend a four-year state college. This ensures that grant portability is not the primary motivator for recipients who study outside Vermont.

The exodus of Vermont students that is the subject of much discussion lately primarily involves students who can afford to go anywhere they like—not those served by need-based state grants. During the 2005-06 school year, about a third of grant recipients attended college outside of Vermont. Many of these students live in border areas where out-of-state colleges are closer to home than the nearest Vermont public institution.

Further, Vermont is consistently a net importer of students—meaning our colleges attract more students (by last count, 1738 additional freshmen alone) than the state exports. Vermont currently ranks third in the nation in the rate at which it imports students, and it ranks first in the nation in the resulting economic benefit as measured by gross state product.

It is not the case that out-of-state colleges automatically reduce their own aid to compensate for the VSAC grant. During 2005-06, grant recipients attending college out of state leveraged $36.8 million—more than eight times the state support they received—in grant aid from the colleges they attended. This is "gift aid"—not loans that have to be repaid or work-study that has to be earned. If those students had been required to study in Vermont, schools here would have been expected to meet that financial need.

In creating VSAC in 1965, the state legislature deliberately carved out a portion of state higher education funding to go directly to students to use at the schools that best meet their needs. Lawmakers did so because they didn’t feel it was right to deprive low and moderate income students of the educational opportunities their more affluent peers enjoy. It was a farsighted policy then and it remains a sound policy today in light of our increasingly complex, diverse, and global world.

Without question, the state is facing serious challenges involving demographic changes, how to make higher education more accessible and affordable, and how to attract and retain skilled workers. As the discussion unfolds, it is important for decision-makers and the public to have factual information. I encourage anyone with questions about Vermont’s policy of grant portability or the types of education funding VSAC administers—which includes state grants, public and private scholarships, and federal and private loans—to contact us for more information.