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EDITORIAL: Take Closer Look at Loan Agency

Posted on: Tuesday, 7 March 2006, 18:00 CST

By Erie Times-News, Pa.

Mar. 6--You have to admire Pennsylvania Gov. Ed Rendell for looking into every nook and cranny in search of funds for public elementary and secondary schools. Still, you have to wonder about his plan for tapping the reserves of the Pennsylvania Higher Education Assistance Agency.

The PHEAA is hardly our favorite state agency, and it sits on a lot of cash. But we wonder if Rendell wants to take a bit from the agency now so he can chase after its riches later.

The public seldom hears about the PHEAA, but it has an important role. It is the state's largest source of student loans and grants, and it manages a whopping $57 billion in assets. Those investments earned $148 million in 2005.

Sitting on its board is another of our state legislators' perks -- 16 of the 20 members are also legislators (none from the Erie region). As you would therefore expect, this board treats itself well. Recently, the Harrisburg Patriot-News revealed the board's lavish retreats, for example a three-day, $135,638 meeting in June at Nemacolin Woodlands Resort in Fayette County. This very posh resort has a spa, several golf courses and lots of goodies. Since 2000, the PHEAA board has spent $885,000 on retreats as far away as California's Napa Valley.

Though office retreats are standard in business today -- and often productive -- there is no reason for sessions at lavish resorts.

Richard E. Willey, president and chief executive officer of the PHEAA, has defended the Nemacolin jaunt before a state House committee: "We thought it was a very appropriate forum to get a large number of our clients together to be with the board." No, many places were appropriate. They were also less extravagant.

So you can see, the PHEAA is already squirming in the light of public censure. It hardly seems a coincidence that Rendell now notices how useful its money could be. No one ever accused Rendell of being obtuse.

In his 2006-07 budget, Rendell suggests using some of the PHEAA's money to help fund a new $20 million, three-year program to provide all high school students with laptop computers. He also proposed using PHEAA money to help community colleges pay for building projects.

Whether the state should provide those laptops is another issue. It's an interesting idea, and it's obvious schools must adapt to the computer age. But we also suspect many of those laptops would soon be used for intense game playing.

But put that issue aside now. The greater question is what is Rendell up to here? If it's to place the spotlight on the PHEAA's funds, how this agency operates, and if its billions of dollars in assets are being used properly, we're all for it.

The agency, of course, insists all its resources must be saved for student loans. Who is surprised by that position?

But if Rendell is interested in taking a closer look at the PHEAA and those resources and those billions, he is just the man for the job.

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Copyright (c) 2006, Erie Times-News, Pa.

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Source: Erie Times-News

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