(Host) The U.S. House approved a bill on Thursday revamping federal college financial assistance and boosting the amount of money going to students.
But, as VPR’s Ross Sneyd reports, the legislation also could force Vermont’s leading financial aid agency to scale back considerably.
(Sneyd) Since 1965, VSAC – the Vermont Student Assistance Corporation – has become the pathway to college for many Vermont families.
But the agency’s very existence is threatened by reforms that President Obama has insisted on in the wake of abuses in college financial aid that have emerged around the country.
The administration wants all college loans to be administered directly by the federal government – not by independent nonprofits like VSAC.
That’s why Don Vickers traveled to Washington this week.
(Vickers) "So if we were not involved in the loan business at all, that’s certainly going to mean a major impact and a change on the service level in Vermont, not only in the loan areas, but the other areas, as well."
(Sneyd) Vickers is the president of VSAC.
The agency made a half-billion dollars in loans to college students last year and administers a portfolio of $3 billion in loans.
It employs 352 people in Winooski to make those loans and to service them. The staff also counsels students and their families and helps them plan for college. And VSAC administers college grants made directly by the state.
VSAC’s authority to do most of those things would have been taken away under the bill as it was first proposed by President Obama.
Congressman Peter Welch says the original proposal was aimed at curbing abuses by big banks and other for-profit agencies.
(Welch) "The problem we had to deal with on VSAC was the language was overbroad. And VSAC is not a big bank. It’s a local, non-profit institution that we’re proud of in Vermont."
(Sneyd) Welch successfully pushed an amendment through the House that would preserve VSAC’s ability to counsel students and administer loans.
But it wouldn’t be able to make new loans. And VSAC President Don Vickers says that’s a problem for his agency and similar ones in about 30 other states. In VSAC’s case, more than half of what it does is make loans.
(Vickers) "We’re down here to make sure that our delegation is well aware of what this bill means for each of those states in job losses and what it means in loss of services to the residents of those states."
(Sneyd) In addition to lobbying House members to support Welch’s amendment, Vickers also has spent time this week meeting with senators.
He says he’s confident that Senators Bernie Sanders and Patrick Leahy will support amendments that would keep VSAC in the lending business.
For VPR News, I’m Ross Sneyd.