Remember Friday nights at Blockbuster, keeping your Tamagotchi alive between classes, or rocking a pair of wide-leg jeans with Doc Martens? The ’90s are back on TikTok, in our closets, even in the soundtrack of our kids’ Spotify playlists. And maybe, it’s time for one more revival: the Virginia Education Loan Authority (VELA). Like the Beanie Babies in your attic, VELA was packed away in 1997 under Governor George Allen. But with Washington pulling back on student lending, Virginia may need to bring this retro policy back into circulation.

On August 14th, the State Council of Higher Education for Virginia (SCHEV) appeared before the House Emergency Committee on Impacts of Federal Workforce and Funding Reductions to lay out the hard truth.  The federal government’s so-called “One Big Beautiful Bill” (H.R. 1) is about to make paying for college a lot harder. Pell eligibility will shrink. Parent PLUS and Graduate PLUS loans, which are already lifelines for many working- and middle-class families, are being capped. And new “earnings outcome” rules could put pressure on Virginia colleges that serve a higher share of first-generation and lower-income students.

SCHEV’s analysts showed us the stark numbers. Virginia families already face billions of dollars in unmet need every year, even before these federal cuts. Without access to federal lending capacity, students will be forced to cobble together private loans with higher interest rates or, more likely, to walk away from higher education altogether. Add to that declining demographics, skepticism about the return on investment, and the loss of international students, and Virginia’s higher-ed system is staring at a perfect storm.

If this feels familiar, it should. The last time federal support was dialed back and college affordability became a crisis, Virginia responded by creating VELA. It was a homegrown solution that recognized education as an investment in our own future workforce and economy.

And this isn’t the first time the idea of reviving VELA has been floated. Back in 2016, I introduced legislation to reimagine VELA as a student loan refinancing authority. The proposal would have allowed Virginia to sell tax-free municipal bonds and let qualified borrowers refinance their student debt at lower rates. The goal was to give responsible borrowers a fair shot to get out from under crushing monthly payments, freeing up resources to buy homes, start families, and invest in our communities. At the time, SCHEV and our Treasurer’s office studied the model and found it feasible, though the bill never made it out of committee. Yet the blueprint remains on the shelf, ready to be dusted off.

Some may think this is too ambitious. However, we’ve already laid groundwork to protect borrowers. In 2020, I carried legislation establishing Virginia’s Student Borrower Bill of Rights, licensing student loan servicers, and creating the Qualified Education Loan Ombudsman housed at SCHEV. The Ombudsman serves as a hands-on liaison for borrowers, cuts through red tape with servicers, and produces public reports that keep us honest about what’s working and what isn’t. Those protections were upheld and implemented, and they remain among the strongest in the country. 

The need for a state-based solution is even more urgent. If the federal government is edging out of the business of making student loans workable, maybe it’s time Virginia edges back in. We don’t need to recreate VELA exactly as it was in 1990’s. But we can revive the spirit of a state-level partner that could once again help Virginians bridge the affordability gap, this time with the added tools of refinancing, smarter lending practices, and modern oversight.

While it may or may not be the right solution today, it’s certainly an idea whose time could be coming back. And before any decisions are made, it’s worth a broader conversation. I welcome feedback on whether reviving VELA or something like it could be part of how we keep higher education affordable for the next generation. An updated VELA with strong consumer protection and measured financial tools can keep more talent here, grow our economy, and prove again that when the federal pendulum swings, Virginia doesn’t have to swing with it.