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EDITORIAL: State's Student-Loan Agency Uses Poor Logic to Defend Its Secrecy

Posted on: Monday, 12 June 2006, 12:00 CDT

By The Morning Call, Allentown, Pa.

Jun. 11--Over the past year, three news organizations have been battling the Pennsylvania Higher Education Assistance Agency for information about some of its operations. PHEAA, the state's student loan agency, has resisted every step. Last week, the fight moved closer to court. Despite a hearing examiner's determination that PHEAA should release the records sought, the agency issued a "final decision" rejecting the requests by the Associated Press, Harrisburg Patriot-News and WTAE-TV in Pittsburgh.

PHEAA distributes and administers college loans in Pennsylvania and across the country. It manages a fund of $82 billion -- all of it public money. In Gov. Ed Rendell's proposed budget for the 2006-07 fiscal year, the agency is to receive $451.3 million in tax dollars for its Higher Education Assistance Fund.

This is big business, so much so that in the past year PHEAA was the target of a hostile takeover by Sallie Mae, the nation's biggest provider of student loan services. Sallie Mae started off as a federal agency, but it was spun off to the private sector in the 1990s and is for-profit. PHEAA remains a public agency. How public? Of its 20-member board, 17 are state legislators.

Besides PHEAA's own bigness, it was the General Assembly's freewheeling spending on itself that attracted scrutiny. The news organizations wanted the details of a three-day meeting at an exclusive western Pennsylvania resort that cost $136,000, information on $800,000 spent on board trips in recent years, and the travel and training expenses related to eight board meetings.

PHEAA argues that revealing the information would hurt it competitively because it would enable for-profits like Sallie Mae to know what business partners it's wining and dining, and what colleges and states it's trying to service. The hearing examiner, retired Dauphin County Judge Warren G. Morgan, didn't buy this, saying the agency is subject to the state's Right-to-Know Law. "PHEAA is engaged in a profitable business, the earnings from which provide significant benefits to the citizens of Pennsylvania," he wrote. "That, however, doesn't change the fact that it is a public corporation and governmental instrumentality and that its earnings are public moneys."

The agency also is trying to hide behind the lawmakers' claim that the state constitution's speech and debate clause exempts legislative activities from scrutiny. This is the kind of thinking that got them in trouble for last year's pay grab. Article II, Section 15 protects their speech, not their actions.

It is a problem that Judge Morgan's opinion is only advisory. So, PHEAA continues to defend its secrecy with poor arguments. The trouble is, the case is heading to Commonwealth Court, (the one that overturned the lobbyist disclosure law), which too often uses suspect reasoning to deny Pennsylvanians their right to know.

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Copyright (c) 2006, The Morning Call, Allentown, Pa.

Distributed by Knight Ridder/Tribune Business News.

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SLM,

Source: The Morning Call, Allentown, Pennsylvania

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