Belt-tightening at PHEAA

The Pennsylvania agency responsible for providing student loans is going on a diet.

It could be spin, but the honchos at the Pennsylvania Higher Education Assistance Agency are saying that they're tightening their belts because of anticipated federal government cutbacks, not because of the growing backlash over outlandish executive bonuses or lavish spending on trips to luxury resorts.

The Harrisburg Patriot-News reported Wednesday that PHEAA Executive Director Richard Willey has issued a memo to his 2,600 employees saying the agency has to find another $19 million of "unanticipated cuts" to meet its nearly $200 million in public service commitments and avoid layoffs. Is it really possible there are 2,600 essential employees at this agency?

PHEAA, the state's official poster child of wasteful spending, has come under fire from Gov. Ed Rendell and members of the state Legislature for its huge bonuses to executives and nearly $900,000 in junket spending. The agency also spent $400,000 in legal fees attempting to prevent several news agencies from obtaining information about the spending.

The PHEAA board, which consists primarily of members of the state Legislature, recently approved $570,000 in bonuses to Willey and his four executive vice presidents. PHEAA executives are among the highest paid "public servants" in Pennsylvania, with Willey earning more than the governor.

PHEAA apologists say the agency is funded primarily through investments, but there is that matter of $500 million a year in taxpayer dollars that PHEAA gets from the state treasury.

There is pending legislation to tighten the reins on PHEAA and change the makeup of its board, which wins the Rip Van Winkle Award for sleeping through one of the worst fiscal scandals in modern Pennsylvania history.

While PHEAA executives are living large, Pennsylvania residents are struggling to pay the skyrocketing cost of a college education. Pennsylvania is the 5th most expensive state to attend college, according to a recent survey.

PHEAA executives will have to say goodbye to those $150 cigars and the foot massages at swanky spas. Times are tough all over.