On PHEAA salaries
In response to your recent editorial concerning a published salary survey of commonwealth employees, which included the salaries of PHEAA’s president/CEO and executive vice presidents, I’d like to clarify some apparent misunderstandings. PHEAA is perhaps the most unique of all state agencies – not only in Pennsylvania, but also in the entire nation. As a true profit center, PHEAA has not received any state appropriation for its general administrative budget in more than 15 years. PHEAA’s salaries are completely self-funded, as is the agency’s entire general administrative budget. PHEAA uses its resources to further reduce the burden on Pennsylvania taxpayers by paying for many programs and services for students, families and schools – including the administration of the state grant program, thereby making an additional $8 million available to students with financial need. We estimate that PHEAA provides approximately $80 million in public service benefits annually to Pennsylvania with no cost to taxpayers. It is worth noting that these benefits include the lowest-cost student loans available anywhere in the nation, which saves individual students as much as $1,200.
In addition to administering the state grant program and other special programs, PHEAA, operating as American Education Services (AES) outside of Pennsylvania, is the second largest student loan guarantor in the nation and the third largest student loan servicer, the ninth largest loan holder and the largest non-bank lender.
The reason PHEAA has purposefully grown to become the nation’s most comprehensive financial aid services organization is simple – for the benefit of Pennsylvania students and families. The agency’s ability to lower the cost of financial aid, self-fund operations and provide powerful public service benefits is incumbent upon our ability to succeed within the highly specialized and fiercely competitive national financial aid services arena.
The worth of anyone’s salary can be measured objectively and subjectively provided it is placed in the proper context. By either method, PHEAA’s management team has historically been underpaid. In 2001, the market average salary of comparable positions (among peers and industry competitors) was 700 percent higher than PHEAA’s president and CEO’s salary.
In fact, prior to January 2002, many of PHEAA’s senior staff members, including executive vice presidents, earned salaries that were at least 40 percent less than their industry peers. This created a serious competitive disadvantage, especially in regards to recruitment and retention.
If you decide to include PHEAA and American Education Services salaries in any future articles or editorials, I hope that you will place the agency in the proper context. Specifically, that no tax dollars are used to fund salaries and that the agency must remain competitive within the very specialized national marketplace – not just with innovative products and services, but with the talented human resources necessary to drive those products and services. Without the quality of leadership and initiative provided by PHEAA’s management team, the organization could not provide the level of services and public service benefits that millions of Pennsylvania students and their families have come to depend upon.
Rep. Elinor Z. Taylor, chairman,
PHEAA Board of Directors