Fully Fund Student Aid Program
The Keystone State has been a strong advocate for higher education, especially in providing aid directly to students so they can choose colleges or universities that are the right fit for them. That makes our state more innovative and competitive, increasingly efficient and a model for how to fuel economic and social development through support for higher education. Pennsylvania is the national leader in funding higher education for students with financial need. Fifty-five years ago, the Pennsylvania Higher Education Assistance Agency was created as a vehicle to administer grant support to students with demonstrated financial need based on family income. Students were able to choose whether to use the grant at community colleges, public four-year colleges or private higher education institutions. Extending the aid to private institutions — which award 49 percent of college degrees in the state while receiving only 10 percent of state funding — is an efficient use of resources as it limits the need for more funding at state universities. More than 90 Pennsylvania private higher education institutions complement the public university system. Another astute action was making PHEAA a provider of student financial aid services nationally, including loan servicing and financial aid processing through American Education Services. PHEAA receives its revenues nationally, but funds support Pennsylvania’s students. Since 2005-06, PHEAA has provided multimillion-dollar supplements each year to benefit students in every Pennsylvania higher education institution. That amount has risen to about $100 million annually out of a total grant budget of approximately $400 million. Unfortunately, the amounts used to supplement the state-funded program have drained reserves, so state government was asked to fund PHEAA grants fully for the upcoming year. It could have a negative impact on PHEAA’s loan servicing business if legislators are unable to maintain necessary reserves. I hope the state’s executive and legislative branches will fully fund PHEAA in order to support both students and the ongoing business model. An additional PHEAA step deserves support as it makes loans directly to students. The recent announcement of the loan program provides a route for students and families to receive lower-cost loans than what what’s available from the for-profit sector. Furthermore, any profit to PHEAA will support operational costs and grants to present and future Pennsylvanians. That is good news for students, their families and taxpayers. Through strong management and careful planning, PHEAA can make loans more affordable while providing substantial grants that do not require repayment. We all want education that is accessible and affordable. This is a thoughtful and astute way to support Pennsylvania’s students. They will be our future civic leaders, fellow citizens, neighbors and skilled workers who will build a stronger economy in our state.