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JET-SETTING PHEAA IS SPENDING SIX FIGURES TRAVELING TO CONFERENCES

ACROSS THE COUNTRY, INCLUDING A HALLOWEEN COSTUME PARTY.
HOW DOES THIS BENEFIT COLLEGE STUDENTS AGAIN?
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Rep. Jesse Topper arrived in Harris- Candidates for elected office spend a Public school districts in 22 states
burg in mid-term and as a full-blown great deal of time and energy dream- have moved to four-day weeks.
political scandal and campaign for ing up one-liners for every possible Should lawmakers in Pennsylvania
governor were unfolding. Baptism by debate scenario. But do they really take a look at this idea? PAGE 12
GROUP INC fire, indeed. PAGE 10 matter? PAGE 4
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 COVER STORY

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BAGGAGE?
PHEAA says its six-figure travel expenses pay
dividends, but college students are holding out their
hands for more grant money from the agency
» » PAULA KNUDSEN + BRAD BUMSTED

6 T H E C A U C U S Tuesday, April 24, 2018


E
mployees of Pennsylvania’s student-loan assistance
agency spend tens of thousands of dollars traveling
across the country to attend conventions, even as stu-
dents attending private colleges and universities plead
for more money to help with their
tuition.
The Pennsylvania Higher Educa-
tion Assistance Agency spent $167,273
in public funds on conference travel for
its executives in 2016 and most of 2017,
expense reports show.
The 44 destinations included Atlan-
tic City, New Jersey; Kansas City and
St. Louis, Missouri; Las Vegas, Nevada;
Clearwater Beach, Florida; San Diego
and Monterey, California; Seattle, Wash-
ington, Phoenix, Arizona; Dallas, Texas;
and Brooklyn, New York.
PHEAA spokesman Keith New said
attending conferences across the coun-
try is necessary because of the reach of
the agency’s work, including its contract
with the federal government to provide
loan servicing. PHEAA works with more
than 6,000 institutions of higher educa-
tion throughout the country.
“In support of our federal servicing
contract and in service to these institu-
tions, we send one ... representative to
each of the six regional conferences for
post-secondary financial aid officers
and at least two to the annual national
conference,” New said.
But critics say sending more than one
representative to conferences — PHEAA
often sent several staffers — is excessive
and a waste of money. “Generally, send-
ing one person to a conference is more
than enough unless they are having two
tracks of educational seminars a day,
then you may want to send two people,
but I cannot imagine why more than two
people would ever need to attend,” said
Patty Smith of the Harrisburg-based
reform group Rock the Capital.
She added work-related conferences
are a good way to get an education and
can be an excellent way to network, but
that extraneous costs can add up.
Spending records show PHEAA em-
ployees’ attendance at regional confer-
ences often included additional costs
beyond travel and lodging, costs such as
exhibit, registration and membership
fees.
The exhibit fee for the 2016 Midwest
Association of Financial Aid Asso-
ciations Conference in Kansas City,
Missouri, for example, was $1,800. The
registration fee was $365.
COVER STORY
STUDENTS UPSET
PHEAA is one of the largest student-
loan servicers in the country, managing
over a quarter of the nation’s $1.4 trillion
student-loan debt on behalf of vari-
ous lenders for millions of borrowers,
records show. In 2012, the United States
Department of Education awarded
PHEAA an exclusive contract to man-
age two federal programs created by
Congress to assist workers in the public
sector job market.
The agency also runs a popular grant
program. This fiscal year, PHEAA al-
located $87 million to the Pennsylvania
State Grant Program, the largest of the
commonwealth-supported student-
aid programs. The grants go directly to
students.
The maximum grant this year is
$4,318, an amount awarded to 128,000
students. That’s down slightly in size
and scope from the previous two years.
Last week, hundreds of students
from private colleges throughout the
state rallied at the Capitol and called
for more funding for grants. The rally
was organized by the Association of
Independent Colleges and Universities
of Pennsylvania, a statewide organiza-
tion representing 91 private colleges and
universities.
The students were lobbying their
legislators to increase state funding for
the Ready to Succeed Scholarship and
PHEAA state grant programs. Specifi-
cally, the collegians pressed legislators
for $500 more per grant award — an
amount that could be funded entirely
with the money PHEAA spends on
travel costs.
“It’s disappointing we’re here ad-
vocating for more money and PHEAA
itself could provide the money,” said
Taylor Weathington, 18, a business
marketing major at Gwynedd Mercy
University.
Weathington was gathered with
a group of her fellow students eating
lunch in the Capitol cafeteria during
a break from lobbying legislators to
increase money for the PHEAA state
grant. Another student at the table
mused, “Why can’t we cut their money?”
Another student, Eileen Dougherty,
Funding Fix?
THE ASSOCIATION OF INDEPEN-
dent Colleges & Universities of
Pennsylvania is urging lawmakers
to increase funding for Pennsylva-
nia Higher Education Assistance
Agency grants by $15 million in the
next budget year. It is also calling
on PHEAA to supplement its grant
program with $97 million of its
own reserves.
After a rally in the capitol last
week, college students met with
legislators and urged them to con-
sider the impact of steep cuts to
the grant program. “Without this
level of state and PHEAA Agency
funding, current students will see
cuts in their PHEAA grants next
year,” the students’ talking points
said. “Indeed, PHEAA has already
sent an early estimator to college
financial aid administrators esti-
mating that the maximum awards
will be cut by $1,104 next academic
year. This would be a cut of 25
percent for the maximum award!”
The maximum grant for 2017-2018
was $4,318, an amount awarded to
128,000 students.
The association said Gov. Tom
Wolf has proposed flat funding
for PHEAA grants in his budget
request for next year; in a handout
provided to legislators, its lobbyist
urged lawmakers to “add $15 mil-
lion to Governor Wolf’s proposed
$272.9 million for PHEAA Grants
and support Governor Wolf’s re-
quest that PHEAA supplement the
PHEAA Grant Program with $97
million.”
J.J. Abbott, a spokesman for the
governor, said, “Fundamentally we
believe they should be able to fund
these (grants) without getting
additional money from the General
Fund.”
PHEAA has a reserve that can
be used, Abbott said. The amount
PHEAA holds in reserves was un-
clear, though.
— Paula Knudsen
Tuesday, April 24, 2018
a senior communications student at
Immaculata University, said $500 in
additional grant money would go a long
way for students from low- to moderate-
income families. They could use the
money to buy food, gas, textbooks, sup-
plies or a laptop.
TRAVEL COSTS
PHEAA staffers have traveled to
places including the Gaylord Texan
Resort in Dallas, Texas, a facility with 4.5
acres of lush indoor gardens, a riverwalk
and an “elegant spa.”
Another destination: the Suncoast
Hotel and Casino in Las Vegas, Nevada, a
facility described as a “golfer’s paradise
in a relaxed setting.”
Three PHEAA employees stayed at
Caesars Hotel and Casino in Atlantic
City, New Jersey, for a 2016 Eastern
Association of Student Financial Aid
Administrators conference. A memo
seeking approval for attendance said the
total anticipated cost was almost $6,000.
The $375 per-person registration
included meals and a 50th anniversary
dinner dance.
PHEAA also sends two “higher edu-
cation access partners” to the National
Association of Student Financial Aid
Administrators conference, New said.
Records show at least six PHEAA
employees attended the 2017 NASFAA
conference at the San Diego Convention
Center in California. In a memo seek-
ing approval to attend the trip, PHEAA
staffers estimated the total for registra-
tion, lodging, per diems, airfare, bag-
gage, parking, shuttle and exhibit fees
would be more than $19,000, or $3,199
per person.
A memo seeking approval for the
employees’ attendance stated: “Our
participation allows us to meet with the
Department of Education and school
partners to discuss current trends in the
marketplace, answer questions and ad-
dress concerns.”
This year’s NASFAA national con-
ference will be held in Austin, Texas,
according to the association’s website.
One of the events will be the “NASFAA
Dance Party,” described in conference
materials as an event at “The Speakeasy,
an elegant nightclub with a roaring ’20s
vibe and a rooftop terrace overlooking
the city.” The event is a separately tick-
eted item with an open bar, light snacks
and an ’80s cover band.
Cont., page 8
THE CAUCUS 7
 COVER STORY

Continued from page 7 PHEAA Travel

Another national group — the
National Association of State Student THIS CHART SHOWS THE DESTINATION, DATE, COST AND PURPOSE OF SOME OF THE TRIPS PAID FOR BY THE PENNSYLVANIA
Grant and Aid Programs — held its an- Higher Education Assistance Agency for its staff in 2016 and 2017.
nual conference in October 2016 in Fort
Lauderdale, Florida. Two PHEAA em-
ployees attended at a cost of more than
WHEN WHERE COST WHY
$3,500. A memo seeking approval for the 6 staffers attended a National Association
employees’ attendance said the group is June 2017 San Diego, California $19,195 of Student Financial Aid Administrators
“the only association that is dedicated to conference.
state grant agency issues and concerns.”
The agency’s spokesman, New, said 9 staffers attended a National Association
PHEAA employees don’t just attend July 2016 Washington, D.C. $14,588 of Student Financial Aid Administrators
conferences for learning purposes; they Conference.
also hold presentations and host space
at the events to “raise awareness for the Staffers attended a Pennsylvania Associa-
tools and services available to school to October 2017 Seven Springs, Pennsylvania 13,072 tion of Student Financial Aid Administrators
create or improve default prevention in conference.
accordance with our federal servicing
contract.” Staffers attended a Pennsylvania Associa-
PHEAA send 20 staffers in 2016 to October 2016 Hershey, Pennsylvania $8,595 tion of Student Financial Aid Administrators
the Pennsylvania Association of Student conference.
Financial Aid Administrators confer-
ence, an event that included programs 3 staffers attended an Eastern Association
titled, “Inside the Magic Kingdom: May 2016 Atlantic City, New Jersey $5,820 of Student Financial Aid Administrators
Seven Keys to Disney’s Success;” “Duel- conference.
ing Pianos;” and a Halloween costume
party. April 2017 Dallas, Texas $4,304 2 staffers attended a Consumer Bankers
A memo seeking approval for the trip Association conference.
right down the road to Hershey estimat-
ed the cost to be $8,595; the expense was 2 staffers attended an Eastern Association
justified as a way for PHEAA to “pro- May 2017 Burlington, Vermont $4,025 of Student Financial Aid Administrators
mote the strength of our organization conference.
and to continue to further our mission
of creating access to education for the 2 staffers attended a National Association
students of Pennsylvania. October 2016 Fort Lauderdale, Florida $3,572 of State Student Grant & Aid Programs
“It is also an opportunity for us to conference.
promote awareness of our role as a
federal loan servicer, and our outreach A staffer attended a Southern Association
activities and default prevention tools February 2016 Greensboro, North Carolina $3,333 of Student Financial Aid Administrators
offered through myfedloan.org and you- conference.
candealwithit.com,” the memo stated.
The memo noted PHEAA had at- A staffer attended a Southern Association
tended the conference every year for February 2017 Biloxi, Mississippi $2,500 of Student Financial Aid Administrators
more than 40 years conference.
In 2017, nineteen PHEAA employees
traveled to Seven Springs Resort for a
PASFAA Fall Conference for a cost of
more than $13,000.

AUDITS RARE

State audits of PHEAA are rare

despite the agency’s well-documented
spending on travel. The most notable
examination came in 2008, when then-

What is PHEAA and

Auditor General Jack Wagner’s released
a bombshell audit of the agency alleg-

the State Grant Program?

ing outlandish spending abuses, hefty
bonuses and structural weaknesses.
Wagner said that audit was the first
conducted by an auditor general in the
40 years of PHEAA’s existence. Speaking
to The Caucus, he said he suspects the
makeup of the board — it is dominated
by legislators — factored into the lack of
performance-type audits.
“If you found too many things wrong,
that would reflect poorly on (board
member legislators),” said Wagner.
“That was always my suspicion.
“As it stands I’m not sure the board
has any influence on helping students,”
he said.
While PHEAA no longer hobnobs at
Nemacolin, the posh resort where board
members spent extravagantly in 2008,
the records of PHEAA employees’ con-
ference travel include a two-day PAS-
FAA conference at the Omni Bedford
Springs Resort in 2015.
“That’s an elite place,” Wagner said.
THE MISSION OF THE PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY IS “TO IMPROVE HIGHER EDUCA-
tion opportunities for Pennsylvanians.” The agency describes itself as “a public corporation and government instrumen-
tality created by the Pennsylvania General Assembly. We serve students and schools nationally through our state grant,
guaranty, servicing, and financial aid processing systems.”
In this fiscal year, PHEAA allocated $87 million to the Pennsylvania State Grant Program, the largest of the common-
wealth-supported student-aid programs. The grants go directly to students.
The maximum grant for 2017-2018 was $4,318, an amount awarded to 128,000 students. That’s down slightly in size
and scope from the previous two years. In 2016-2017, the maximum grant was $4,378, an amount awarded to 143,000
students. In 2015-2016, the maximum grant was $4,340, an amount given to 154,000 students.
PHEAA officials say the agency administers the Pennsylvania State Grant Program, as well as other grant programs,
“without taxpayer support.”
“We use our business earnings to fund the administration of these programs ensuring that every appropriated dollar
goes directly to students,” the agency says.
PHEAA also allocated $10 million this year to the Pennsylvania Distance Education Program and $6 million to the
Pennsylvania Targeted Industry Cluster Certificate Scholarship Program.
PHEAA is governed by a board of directors and administered by a president and chief executive officer and staff. The
agency has 3,500 employees and contractors; it is based in Harrisburg and has four regional offices across Pennsylva-
nia.
— Paula Knudsen

8 T H E C A U C U S Tuesday, April 24, 2018