PHEAA Board Chairman admits 'mistakes have been made'

I came across this letter to the editor published in The (Delaware County) Daily Times from state Rep. William Adolph Jr., who also serves as chairman of the board of directors of the Pennsylvania Higher Education Assistance Agency.

PHEAA is the poster child of what is wrong with government or quasi-government agencies. They have no accountability. They squander millions of dollars. They reward incompetence. The people who are entrusted to oversee these agencies are morons or members of the Pennsylvania Legislature. Wait a minute. Isn't that the same thing?

The Delco Times, like many Pennsylvania newspapers, have been very critical of PHEAA's spending and its board's lack of oversight.

Adolph must be feeling the heat. He admits "mistakes have been made," which is the usual bromide politicians use when they've been caught doing something wrong. Adolph also promises that "PHEAA will continue to make the necessary reforms to ensure that every available nickel is spent in the best interests of our students and families."

Sure. And that property tax cut Gov. Ed Rendell has been promising me since 2002 is in the mail.

Here's his letter:

Adolph: PHEAA is getting back on track

To the Times:

Few would argue that my tenure as the new chairman of the Pennsylvania Higher Education Assistance Agency Board of Directors has been anything less than challenging. In addition to dealing with suddenly changing market forces that affect how PHEAA earns money, the agency has been the subject of intense media scrutiny, an ongoing special performance audit by the state’s Attorney General and a torrent of critical barbs by opponents and other critics.

I will be the first to say that mistakes have been made in regards to spending, especially when every available dollar could best be used to help Pennsylvania students pay for college. And I say this regardless of the fact that PHEAA is supported by its earnings, not tax dollars.

By instituting a rigorous process of reform and refocusing, the board of directors is realigning PHEAA to it original role as an accountable state agency funded by its own earnings, but working solely in the service of Pennsylvania students and families at every level.

As a result, PHEAA is now operating under the most restrictive travel and business expanse reimbursement policy of any organization in the commonwealth. We have banned all business development "retreats" and instituted American's first voluntary Student Loan Code of Ethics — encouraging other student aid providers to follow our lead.

PHEAA has also conducted an aggressive and continual internal cost-cutting campaign, which includes the elimination of every nonessential expenditure.

We have slashed travel and promotional-related expenses by 78 percent when comparing the six months ending Sept. 30, 2007, with the same six months last year. And PHEAA has identified about $40 million in cost-cutting savings by evaluating every facet of its operations from top to bottom. But our goal is not just to cut costs – we must also grow PHEAA's business in order to generate more public service funding that is not at the taxpayers expense. Let's not forget that 60 percent of PHEAA's earnings during the last year came from business outside of Pennsylvania. This helped enable PHEAA to fund $200 million in student aid programs last year and nearly $1 billion during the last 10 years.

As chairman of the PHEAA board for the past eight months, I am pleased with our progress thus far. However, I want to assure every Pennsylvanian that PHEAA will continue to make the necessary reforms to ensure that every available nickel is spent in the best interests of our students and families.

By eliminating all unnecessary business expenses while simultaneously investing in business growth, all done in an accountable and transparent manner, we are not only making more funds available for student aid needs, we are also working to restore the commonwealth's faith in an agency that has helped millions of students achieve a higher education over the last 44 years.

WILLIAM F. ADOLPH Jr.
State Representative, R-165
Chairman of the Board, PHEAA