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Pa.’s Student Loan Agency Spent Lavishly on Promotional Giveaways


Pennsylvania’s student loan agency spent about $2.2 million over five years on promotional giveaways, such as logo-enscribed golf balls, pencils, clothing and reusable glowing ice cubes, a newspaper reported.

The Patriot-News of Harrisburg reported Sunday that in the five years ending June 30, the Pennsylvania Higher Education Assistance Agency purchased, among other items, 150 brass clocks at $22 each, $30 L.L. Bean jackets, 3,000 peppermint candies with its logo on the wrapper and $3,400 worth of gummy brains candy.

“Gummy brains? The officials at PHEAA must have gummy brains if they were willing to waste scholarship money on these types of wasteful expenditures,” said Rep. Josh Shapiro.

Shapiro, D-Montgomery, is sponsoring legislation that, among other things, would limit PHEAA’s spending on promotional items.

PHEAA spokesman Keith New said such spending has ended since the lawmaker-dominated PHEAA board directed the agency to purchase only “ordinary and necessary” items. Gummy brains, given to employees as part of the launch of PHEAA’s “big brain” initiative to motivate employees, do not fit the new guidelines.

“It was meant to be a clever way to get people to take a break from what they were doing in their jobs and focus on the brand because so many times people … don’t take a look at the entire enterprise,” New said. “But you will never see anything like that again.”

PHEAA’s costs for board retreats at resorts and staff bonuses and salaries had previously attracted widespread criticism, resulting in some changes and prompting calls for drastic reforms.

Last month, the state auditor general’s office disclosed that PHEAA spent more than $7.5 million on employee bonuses since July 2004 and $108,000 on an amusement park outing for employees in April.

The newspaper calculated that the promotional items’ cost since 2002 would have funded 553 of the $4,000 grants available to students attending state universities, or 885 of the $2,500 community college grants.

State Sen. Sean Logan, D-Allegheny, vice chairman of the PHEAA board, said the agency’s promotional giveaways helped advertise it to students and clients in a competitive marketplace.

“There’s one turnpike, one place to get a driver’s license, one Department of Welfare, but there isn’t just one place to get a student loan,” Logan said. “PHEAA has to compete with some of the largest for-profit corporations.”

PHEAA recently announced it expects to reduce the number of grants given to full-time students and for financial aid to adults taking job-training classes.

It blamed a new federal law governing student lenders and unsettled financial markets for a projected $44.4 million reduction in spending on the aid programs in 2008-09, down from $105.8 million this year.

Information from: The Patriot-News,

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