PHEAA trims workforce by 37 positions through early retirement offer

Some 37 employees at the state’s student financial aid agency have been approved to call it a career by accepting an early retirement offer.

This is expected to produce an annual savings for the Pennsylvania Higher Education Assistance Agency of $5.1 million, according to agency spokesman Keith New.

The agency’s board in April approved the voluntary retirement incentive program. Officials said 160 of its 2,000 employees met the necessary years of service and age requirement to be eligible to participate in the retirement incentive and in turn, help to reduce PHEAA’s expenses.

Eligible employees will receive a one-time payment of between $25,000 and $40,000, depending on their current salary.

Unionized employees who accepted the offer must retire by July 1 and non-union employees by Nov. 30. They have up to 45 days to change their mind about retirement, New said.

The agency administers the state grant program for college students and uses earnings from its PA Forward student loan program, federal loan servicing and other business lines to supplement the state appropriation in funding the grant program that provides aid that does not have to be paid back.

Rep. Sheryl Delozier, R-Cumberland County, who serves a chairwoman of the PHEAA board of director’s executive committee, said savings derived from the early retirement program will be applied as much as possible to reducing the debt students incur from attending higher education. According to LendEDU, Pennsylvania has the nation’s 47th highest average student loan debt with $38,521.

“Anytime we can save dollars on the administration side, that’s a good thing to be able to better serve our students,” Delozier said. “PHEAA’s ability to get into (offering student loans) most recently and really work with our students to reduce the cost of education through the grant program as well as low-interest loans is what PHEAA is there for. So reducing administrative costs is just good business.”

The decision to offer the retirement incentive grew out of employee requests to the agency’s CEO Jim Steeley, New said.