The first $11.7 million of $195 million in federal rural health funds earmarked for Vermont have been awarded, with the lion’s share going to tuition for students in healthcare fields.
Today’s announcement directs $9 million to the Vermont Student Assistance Corporation toward tuition benefits for students in nursing, dentistry and other healthcare fields who commit to working in the state for at least five years.
The remaining $2.7 million is directed to three nursing homes in Vermont and to four teaching institutions for the training of licensed nursing assistants working in long-term care.
“As a small state, our workforce shortage makes it difficult to expand healthcare services in rural communities,” Governor Phil Scott said in a press release issued by the federal Centers for Medicare & Medicaid Services. The funding will help Vermont secure well-paying, healthcare-related jobs and expand nursing home resources, he added.
The money comes as part of a much larger sum of rural health transformation funds designated for Vermont at the end of 2025, according to the Centers for Medicare & Medicaid Services and Vermont’s Agency of Human Services.
“We must do all we can to ensure our systems of care are prepared to meet growing demand as well as the changing and complex needs of Vermonters as we age,” said Dr. Jill Bowen, the agency’s Department of Aging, Disability and Independent Living’s commissioner, in a press release.
The Agency did not provide a response to VTDigger’s questions by publication.
The state has until the end of the year to allocate the $195 million to subgrantees and has been racing to award all of it across different healthcare needs.
The federal One Big Beautiful Bill Act, which became law in July 2025, set aside $50 billion to be allocated in $10 billion allotments over the next five years. Every state is guaranteed $100 million, while the remaining half of the annual fund is awarded on a state-by-state basis each year. The fund has been seen as an attempt to absorb the financial blow that Medicaid cuts and the loss of a provider tax, which helps states fund their Medicaid programs, are expected to have on rural hospitals.
Rep. Alyssa Black, D-Essex Town, who chairs the house health committee, pointed out that the legislature and healthcare advocates have been asking the Agency of Human Services to make a plan for broad hospital and healthcare transformation work for years. She’s concerned that the roll-out of the federal health dollars is rushed and near-sighted.
“It’s a shiny object meant to distract us from the impending cuts coming. That’s what we should be paying attention to,” she said, referencing the Medicaid cuts and loss of the provider tax.
The Vermont Student Assistance Corporation loan benefits have been part of the state’s budget in years past, but the governor and legislature struck it from this year’s approved budget.
“And then what?” Black asked. “We cannot build a work force in 5 years.”
Around 600 students are receiving tuition benefits this academic year in exchange for working in rural communities in Vermont for five years after the degree completion, said Patrick Leduc, Vice President and Chief Operating Officer at Vermont Student Assistance Corporation.
The state previously allocated funding for tuition benefits for nursing and dental hygienist workforce programs, but did not set aside funding this year in anticipation of the $9 million in rural healthcare funds, Leduc said. The federal funds for the programs this year apply to a wider range of health care workforce development programs, such as mental health related fields and emergency medical services, he added.
Additionally, a separate pot of the awarded funds will go towards training licensed nurse assistants for long-term care. Northeastern Vermont Regional Hospital, Hartford Town School District and Brattleboro Development Credit Corporation all have been awarded part of the $2.7 million in funds to become “regional LNA (licensed nursing assistants) Training Hubs.”
The Community Colleges of Vermont has been awarded additional funding to develop a state-wide licensed nursing assistants training hub program.
Helen Labun, executive director of the Vermont Health Care Association, said the COVID-19 pandemic caused a shortage in health care workers nationally, and Vermont has faced a crisis in long-term care workers as a result.
The state identified the workforce shortage and high use of traveling staff as a driver for nursing home financial troubles, prompting it to award nursing homes around $40 million in bailouts since 2020.
Two of the selected nursing homes will use the federal award to build out their ventilator units. The Pines at Rutland Center for Nursing and Rehabilitation has been selected to buy new ventilators, while the St. Johnsbury Center for Living and Rehabilitation has been selected to use the funds to build out a new ventilator unit in its facility.
In Springfield, the funds will go towards the creation of a “dialysis den” at Springfield Center for Living and Rehabilitation, allowing patients to receive local dialysis rather than traveling for the service as they currently do.
The St. Johnsbury Center for Living and Rehabilitation and Springfield Center for Living and Rehabilitation were cited by the state for systemic care problems last year after the two nursing homes were purchased by Allaire Health Services, VTDigger reporting revealed. The St. Johnsbury and Springfield facilities are currently in compliance, according to the state survey database.
Suzanne Anair, spokesperson for Allaire Health Services, wrote in an emailed statement that this federal funding for the dialysis den and ventilator units creates an opportunity to expand specialized health care access for patients closer to their homes.
Black said she is frustrated by how much time and attention the state has poured into rapidly drawing down these federal dollars, rather than bolstering the healthcare system for the long term. After five years, the state can no longer rely on these federal dollars.
“I wish that the state could give back every dollar of the rural health transformation money,” she said in an interview. “We are flitting away one-time money on things that are not sustainable.”
