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"And ye shall know the truth, and the truth shall make you free." - John 8:32
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Author:  Tony Phyrillas
Bio: Tony Phyrillas
Date:  August 24, 2007
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Topic category:  Other/General

Pennsylvania student loan agency spends $500,000 on executive bonuses

Lavish trips to resorts and spas, golf outings, expensive gifts and a half-million dollars in bonuses for executives. Is this the best use of money by an education agency?

For people in the education field, you'd think they would have learned a lesson by now.

Stung earlier this year by the revelation of $900,000 in spending on lavish trips and gifts by PHEAA board members and top executives, you'd think the agency would be on its best behavior. Not so. The Associated Press reports that PHEAA, which provides student loans to Pennsylvania residents, handed out $500,000 in bonuses to its already well-paid executives.

There are efforts under way in the Legislature, spearheaded by state Sen. John Rafferty to provide more oversight over PHEAA. Those measure can't come soon enough.

As Americans struggle to pay for their children's education, you have to wonder why an agency would spend so much money on itself. The $900,000 in lavish spending on trips and gifts and the $500,000 in bonus money may not add up to a lot, but the money could have been used to send a few more kids to college.

Eric Epstein, coordinator of the watchdog group,, is offering a 12-step program to reform PHEEA. I second that motion.

Here's Epstein's plan:

Twelve Step Program to Reform the Pennsylvania Higher Education Assistance Agency

1) No individual indicted or arraigned by state or federal authorities for felonious conduct can continue to serve on the Board. However, Board Members should only be required to take a leave of absence until the matter is resolved. Full resignation from the Board should only be required in the event of being found guilty of a felony or an offense involving moral turpitude.

2) The Board should be reduced from 20 to nine (9) members. Members of the Board shall serve no more than three consecutive four-year terms and no more than a total of 12 years.

3) The Board should be composed of directors with appropriate skill sets in accounting, community banking, economics, education, finance, marketing, law or statistics. Board members will be eligible for annual compensation and business meeting stipends as well as reimbursement for legitimate expenses in accord with governance protocol and prevailing public service directorship fees. All data related to Board compensation and expenses will be available for public review.

4) Board members should be nominated by the Governor and approved by 37 senators. Unless a vacancy exists on the Board, the Governor shall nominate no more than four Board Members during each four-year term.

5) No current member of the legislative or executive branches of state government should be a eligible to serve as a member of the Board thereby nullifying the claim that Board members "compel the conclusion that the legislative members of PHEAA's board are acting as an arm of the General Assembly when they engage in PHEAA activities." (Richard Wiley, PHEAA, "Final Decision", June 7, 2006)

The Executive Director of PHEAA shall not be a member of PHEAA's Board of Directors.

6) PHEAA's current Board of Directors, together with senior management, should issue a statement acknowledging that PHEAA is not exempt from Pennsylvania's Right-to-Know Law.

7) PHEAA should reimburse the legal costs of the three news organizations that filed Right to Know requests, i.e., the Associated Press, the Patriot-News of Harrisburg and WTAE-TV in Pittsburgh.

8) PHEAA's current Board of Directors, together with senior management, should immediately release all records requested by legitimate news organizations, including all names or other information necessary to a complete understanding of the nature and purpose of all financial transactions, and release the outstanding records requested by the above-named news agencies.

10) PHEAA's Board should issue a statewide request for proposal for bond lawyers and counsel not affiliated with senior management or the Board of Directors or "contractually affiliated" with any cabinet member of the executive branch or any member of the legislative branch of Pennsylvania's government.

11) PHEAA's Board should issue request for proposals for a forensic audit to be conducted by one of the Nationally-recognized "Big Four" accounting firms. an entity not affiliated with senior management or the Board of Directors.

12) PHEAA's Board should accept Richard Willey's resignation, with severance compensation contractually in effect and required as of his last compensation review date, and conduct a statewide search for a qualified Executive Director, not "contractually affiliated" with senior management or the Board of Directors or "contractually affiliated" with any cabinet member of the executive branch or any member of the legislative branch of Pennsylvania's government.

Below is a list of PHEAA Board members who are ultimately responsible for the financial excesses at the agency. Most of them are current members of the Pennsylvania Legislature, in which case you might want to ask, "What the hell is wrong with people?"

Rep. William F. Adolph, Jr. Chairman; Senator Sean Logan Vice Chairman; Rep. Ronald I. Buxton; Senator Jake Corman; Honorable J. Doyle Corman; Rep. Craig A. Dally; Senator Jane M. Earll; Senator Vincent J. Fumo; Senator Vincent J. Hughes; Rep. Sandra J. Major; Rep. Jennifer L. Mann; Rep. Joseph F. Markosek; Senator Michael A. O'Pake; Honorable Roy Reinard; Senator James J. Rhoades; Rep. James R. Roebuck Jr.; A. William Schenck III; Rep. Jess M. Stairs; Senator Robert M. Tomlinson; Secretary Gerald L. Zahorchak PA Department of Education

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Biography - Tony Phyrillas

Tony Phyrillas is a leading conservative political columnist and blogger based in Pennsylvania. He is a veteran journalist with 25 years experience as a reporter, editor and columnist for several newspapers. Phyrillas received recognition for column writing in 2010 from the Associated Press Managing Editors, in 2007 from Suburban Newspapers of America and in 2006 from the Society of Professional Journalists, Keystone Chapter. A graduate of Penn State University, Phyrillas is the city editor and political columnist for The Mercury, a two-time Pulitzer Prize-winning daily newspaper in Pottstown, Pa. In addition to The Mercury website (, his columns are featured on more than a dozen political websites and blogs. Phyrillas is a frequent guest (and occasional host) on talk radio and has been a panelist on the "Journalists Roundtable" public affairs TV program on the Pennsylvania Cable Network (PCN). Phyrillas was named one of the '10 Leading Greek-American Bloggers in the World' in 2007 by Odyssey: The World of Greece magazine. ranked Phyrillas the Most Influential Political Blogger in Pennsylvania for three consecutive years (2007-2010). You can follow Phyrillas on Twitter @TonyPhyrillas

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