HARRISBURG - The state’s student loan agency, already the focus of negative publicity for its travel expenses, has a new critic.

The governor.

“It has to have a total housecleaning,” Gov. Rendell said of the Pennsylvania Higher Education Assistance Agency. “When the cost of college is more and more challenging to Pennsylvanians and their families, we can’t have the abuses that PHEAA has had for so long.”

Those comments, at an impromptu Capitol news conference on Wednesday, have touched off speculation about what he has in mind. He didn’t elaborate, but Doug Rohanna, his communications director, said Rendell plans to issue a complete statement on PHEAA’s situation in the next few weeks.

Rendell was reacting to the uproar over recently released PHEAA travel expense records - revealing trips to luxury resorts, big dinner bills, a tuxedo rental and the use of a Learjet by its chief executive Dick Willey, and other staffers, all at public expense. The agency said the jet was cheaper than flying on a commercial airline.

PHEAA began releasing some records last week after losing a 19-month court battle to keep them from the Patriot-News of Harrisburg, the Associated Press, and other media outlets. The agency had argued that releasing the details would jeopardize confidentiality agreements with clients and reveal trade secrets.

Yesterday - the day after Rendell made his comments - the loan agency’s officials said they don’t know exactly what the governor may propose. PHEAA’s board chairman, State Rep. William Adolph (R., Delaware) said he is seeking a meeting with Rendell to talk about it next week.

Asked what Rendell might have meant, PHEAA spokesman Keith New said, “He hasn’t answered that question, so how can I answer it?”

Since 2004, PHEAA has fended off a takeover threat by its chief competitor, Sallie Mae, the nation’s biggest provider of student loans, which had offered to pay the state $1 billion over five years to acquire PHEAA. Rendell had appeared open to the sale, but never actively pushed it in the legislature.

PHEAA’s board of directors consists of 16 legislators and four appointees of the governor. Changing the independent agency’s structure would take legislation But the timing is interesting: PHEAA’s travel costs come to light just as the legislature has been making strides toward greater openness in its own spending practices. And this week, Rendell jumped on the transparency bandwagon, announcing he’ll push to widen the state’s open-records law.

PHEAA spokesman New insisted that the full story of the agency’s expenses has not come out yet, and that the governor was merely responding to what he’d read.

For example, New defended a PHEAA-paid dinner bill: $1,734 for 15 people, about three years ago. The bill included meals for 11 clients, who that year had generated $3.7 million in revenues for PHEAA, New said. He said the agency’s clients typically include banks and other lenders.

“Even the governor would agree that that is a smart business meeting and the return on the investment was remarkable,” he added.

In a five-year period that ended about two years ago, PHEAA spent about $1 million sending board members and staff to conferences, many of them at resorts across the nation and abroad. New said such retreats were stopped two years ago.

More cost controls are coming in the aftermath of the recent news accounts, promised Adolph, the newly elected chairman.

“There have been internal mistakes made,” he said. “… Board members understand the perception out there and the political climate. We are a public organization and should hold ourselves to a higher standard.”

Adolph said he wants to end the carte-blanche approach to expenses and has recommended the agency adopt per diems for its board members and staff, as well as stronger internal audits.

But he said PHEAA is a national organization and travel and entertainment are necessary.

Over the last year, PHEAA has provided about $200 million in student grants, scholarships and discounted loans to more than 600,000 students.

A private think tank, the Harrisburg-based Commonwealth Foundation, has advocated privatizing PHEAA and said its secrecy about travel costs and revelations about the expenses should serve as a red flag.

“When Gov. Rendell looks at cleaning house, I hope he looks at privatizing PHEAA,” said Nathan Benefield, policy director for the group, which supports limited government. “I don’t see the justification of having PHEAA as a public agency for the taxpayers when it’s been a playground for board members.”

Information from: www.philly.com

This entry was posted by Taman Siswa on Friday, March 9, 2007 at 7:34 am and is filed under Education News, Student Loan. Tags: College, Education News, Grant, Loans, Scholarship, Student, Student Loan, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.