This is why you keep cash reserves, don’t spend lavishly, and act like the public agency that you are, PHEAA.
Pennsylvania’s student-loan agency will temporarily stop making new loans through a federal program in response to a credit crunch that has created turmoil in the bond markets, the agency’s acting chief executive said Tuesday.The Pennsylvania Higher Education Assistance Agency decided two weeks ago to suspend loans made outside the state through the Federal Family Education Loan Program. The agency will soon send out notices to colleges and universities that it will suspend in-state loans effective March 7, acting president and chief executive officer James Preston said.
The program provides federally subsidized, low-cost student loans to about 500,000 Pennsylvania students.
“Right now, it’s not profitable for us at all to finance (FFELP) loans,” Preston told a House committee during a hearing on the agency’s budget.
Just close it down. There
Just close it down. There are too many state agencies, and getting rid of this one would be a start.
Student Loans
How would students get loans? PHEAA performs a vital service, and one than is probably rightly located in a public agency. It just has gotten a bit lost along the way. It’s an agency I actually have a lot of hope for – if it gets the right leadership and a reform agenda, it could be a national leader. Sadly, I don’t think PHEAA insiders see it the same way.
pheaa
will be up and running again. For anyone from a lower- low middle income class family, which the last time i checked was alot of pennsylvania families cant just foot the tab for college. people that cant get loans wont be able to go. Greg is right pheaa performs a vital service and although the organization has had its own scrutiny… its mission is tremendously important.
Being glad that it shut down… essentially means your glad alot of kids wont possibly get the loan they need to go to school. I dont see whats great about that. Its terrible. I think they’ll be up and running… they need some restructuring.
Too Many State Agencies
While it is true there are too many state agencies and many of them have problems managing the funds to which they are entrusted, it would be a mistake to discard one such as PHEAA that provides such a valuable service. If the agency is being mismanaged, then it is time for new management. (Let’s not throw the baby out with the bath water). The cost of attending a public or private college increases every year and many families depend on these loans.
The future of this country
The future of this country and our state relies, as it always has, on the education of our youth. This is no longer simply a high school education or a Bachelors. With private liberal arts colleges in the $40,000 to $50,000 per year range a middle class family can hardly send a child off to college. State schools are running in the $20K range. This is a huge hit on a $50,000 a year salary. PHEAA provides a part of the financial assistance one must retain to get that kid into school. School grants, on-campus jobs, private loans and if eligible, scholarships make up the rest of the tuition and living expenses. There is no alternative for a young person today who wants to do better than his father than to go on to college and continue on to grad school. It’s not an option, but a requirement. To pull one of the most important sources of tuition assistance out of the hands of these kids would damage not only their future, but ours , as well. This is not a PA marketplace, but a world marketplace and our kids need the tools to compete. Only a college education can give them tese tools. It’s true that PHEAA needs to be reworked and streamlined, but to dismantle this vital resource at a time when tuition is outpacing the majority of American families would be an injury from which we would never recover. Remember, this is not free money to these kids. It is a loan and they will spend years paying it back, but it will give them a chance.
JP
The cost of a state school is significantly less that 20k/year
It’s only about $12,000, including room and board. If you live at home it’s less than $7000 a year.
I stand corrected. It is
I stand corrected. It is true that state schools are much more accessible to a larger population of students, but I think it’s important to keep those private colleges within reach. They do offer a very indepth curriculum and many options to their students that are hard to find in state schools. But you are correct about the tuition. My mistake. Do you agree that PHEAA and the service it provides is crucial to PA’s students in private and state schools?
JP
Yes, it is suppsoed to provide a crucial service
But it is apparent that PHEAA is not up to the job. It should be abolished and its functions should be taken over by Department of Education, so that the Governor can cause heads to roll when it is not doing its job or spending money lavishly.
As mentioned earlier in a
As mentioned earlier in a reply to Greg Palmer, a restructuring is essential if PHEAA is expected to fulfill its mission and for that matter, expected to survive.
JP
Actually JP, you're really haven't been corrected.
While 20K might be a little high, it really isn’t that unrealistic of a figure for a kid going to Temple who lives in university housing. The cheapest you’re going to Temple is for roughly 10-11K, and unless you have family right in Philly or in Philly suburbs so you can live with them, that number will easily creep up to pretty close to 20K. (I think the anonymous poster who seems to think that state universities are a nickel per credit has also forgotten about things like eating, clothes, toiletries and other necessities that a student will need in college. And if their parents aren’t able to put them on a health insurance plan, forget it. That tacks on a minimum of about $1000 on up to about $2500 per year.)
O rly?
Temple – a state university that I happen to attend – runs between 10 & 11K for in-state tuition every year. This includes all the associated miscellaneous fees for your tuition, but excludes the university’s health insurance and housing.
Also, you don’t account for older students who have returned to school or students from outside the area. How on earth is a student from Allentown supposed to omg!justliveathome?? Even using your completely incorrect numbers, you simply aren’t operating in reality.
i agree JP
Also, this govonor and a new govonor, as well as house leaders should take a special interest in fostering this organizations restructuring and future success. Unquestionably… kids from Pittsburgh, Philly… and throughout the entire state sorely depend on this agency to be given an opportunity.
This agency is still
This agency is still useless and should be abolished. It just gets kids deeply in debt for educations of dubious value. Outside of some professions, college isn’t needed for anything but getting into a position to spend your life feeding off taxpayers and sanctimoniously calling it “public service”.
Justification
It’s comments like this one that give justification to higher education. Hey kids! get a college education or you too will be a blithering idiot.
college is needed
or you could very well end up making 6.85 an hour, also the last time i checked people with college degrees make way work than people that dont have them. Its the “caste system” mentality like this one… and then everyone wonders why our kids performances in school and in profession fields are falling behind other counties… here’s your answer, idiots like this guy.
Next time you wheel a
Next time you wheel a family member into the emergency room or your lawyer keeps your son out of jail, don’t forget to tell them how dubious the value of their college education is.
JP
I wish these words were
I wish these words were mine, but they belong to a man all Americans should hold in unmatched reverence. They were spoken by George Washington to the Board of Visitors and Governors of Washington College in 1789 and they will forever hold true.
He said
“As, in civilized societies, the welfare of the state and happiness of the people are advanced or retarded, in proportion as the morals and education of the youth are attended to”.
Reformation of this agency and its workings is crucial, but the continued financial assistance to our state’s young people is the fulcrum upon which the “welfare of our state and happiness of our people” is balanced.
JP
PHEAA/AES biggest problems
Let’s be honest. PHEAA/AES’s biggest problem is not the $40M hole that it is in. The biggest problems are its gross mismanagement; the lack of communication between management, staff and also the student borrower’s themselves. PHEAA/AES is never going to be able to survive until it addresses these issues. The first thing they need to do in order to turn things around is to have internal investigations with their entire staff to find out what can be done to return the agency back to the respectable and vital institution it has been for almost half a century. The issues about the lavish spending need to be addressed if not only to insure to the public that it is not the gluttonous agency that the media is portraying it to be. Internal investigations would lead to better choices in management and also better decisions in choosing better business partners. PHEAA/AES has been left holding the bag by these greedy lenders who only care about making profit off people and that is the second biggest issue. Most people don’t realize PHEAA/AES has not only acted as a servicer and lender but continues to be one of only a handful of guarantors of federal student loans. It’s the guarantor’s duty to compensate a lender when a loan goes into a default status. Sallie Mae, PHEAA/AES’s main competitor, is also suffering from many of the same issues. These agencies need to partner, in a non-business aspect, and file a petition to the Supreme Court to have the federal government’s free student aid program, FAFSA reviewed. It is failing because the level of default is getting too high and the majority of these people it is allowing to receive loans are never going to pay them back. The credit checks need to be more strenuous. The nation’s higher courts need to be brought into this so that the feds can stop harassing these guarantors like this. The government needs to be also held accountable for the debt they are chasing these guarantors for. It’s absolutely egregious that the feds can use their power to bully PHEAA/AES and the rest. The government is the only lender these agencies deal with that gets to harass them if things don’t go right and its not fair. This government also profoundly participates in consolidations that were doomed from the inception for these loan debts and that needs to be addressed at the highest level. PHEAA/AES needs to go back to its humble beginnings and deal with the students in a more direct fashion and don’t rely so much on these greedy lenders to do it because they won’t. PHEAA/AES has done well in offering borrower’s incentives to bring down the cost of their debts in the form of interest rate reduction programs but more can be done. PHEAA/AES should attack the problem of defaulting by partnering with hiring agencies like Monster.com and others to assist these students with ways of finding a job. If PHEAA/AES takes some of these ideas into consideration it should have no problem surviving and addressing their current economic issues.
DL
Bravo, DL!
That’s a fantastic and well-thought-out comment. Personally I think that PHEAA should evaluate itself (and that we should evaluate it) based on its mission of public service and enabling education for more students.
PHEAA is not a business. Yes, it needs to balance its books, but it’s actually a public service agency that gets state money and subsidies to do its job. OUR money goes into it, so frankly we’re all shareholders. We need to get control of that agency and do what shareholders would do with a private company – make it work for our benefit.
Perhaps more people should
Perhaps more people should read DL’s comment than those of us that read this blog. I couldn’t agree more.
JP
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