As we begin the fiscal year, we would like to report on reforms and initiatives that have helped transform PHEAA, which had been the subject of intense media and public scrutiny, into one of the nation’s most efficient and accountable government-related operations. When we were elected chairman and vice chairman of the PHEAA board of directors three years ago, we welcomed 13 new members to the 20-member board.Our new board took a swift, bipartisan action to restore confidence in an agency that has helped generations of Pennsylvania families afford a higher education.
The board eliminated management bonuses, automatic salary increases and all sponsorships and advertisements that were not in line with PHEAA’s mission. The board also instituted one of the nation’s strictest business and travel expense reimbursement policies. Those reforms have resulted in more than $77 million in savings.
Concerned about the unethical business practices in some corners of the student aid industry, we also were the first to adopt an industry-leading Code of Ethics, formalizing long-standing business practices that were founded on integrity and respect for federal guidelines.
After navigating the most difficult economic environment in PHEAA’s 46-year history – resulting in a suspension of lending, staff reductions, organizational restructuring and sweeping cost-saving initiatives – PHEAA was successful in securing a federal contract to service the nation’s growing direct student loan portfolio.
This is especially important considering that PHEAA self-funds all of its operations, including the administration of the State Grant Program, without any support from Pennsylvania taxpayers.
By winning this important contract, PHEAA has helped ensure its financial strength as it continues to fulfill its public service mission for the commonwealth.
Finally, the legislative members of the board were successful in passing legislation, signed into law on July 9 that restructures the PHEAA board of directors.
This legislation was based on a unanimously adopted PHEAA board resolution that called upon the General Assembly to replace legislative seats on the board with private-sector individuals who could provide additional leadership expertise in an increasingly complex financial environment.
The legislative members of the board, which include the chairmen of the House and Senate Education committees, along with their staffs, carefully crafted legislation that would restructure the PHEAA board – making it even more accountable and responsive in today’s challenging student financial aid industry, which has become critically valuable to Pennsylvania families struggling to afford a higher education.
The legislation reduces the number of lawmakers serving on the 20-member board from 16 to 12. The four legislative seats will be replaced with private-sector professionals with experience in banking, investments and information technology; adding their expertise to the decisions that the board makes on behalf of Pennsylvania students and families. The legislation also reduces the six-year board term to four years.
As the student aid industry continues to evolve, so will PHEAA. The additional expertise that we are bringing to the board of directors will help us anticipate those changes so that we can be most responsive to the needs of our citizens.
Rep. William Adolph is chairman of the PHEAA board of directors and Sen. Sean Logan is vice chairman.
