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$420M in college aid snagged by budget impasse

| Wednesday, Aug. 12, 2015, 11:52 p.m.

Nearly $420 million earmarked for state grants to 153,585 Pennsylvania college students is in limbo thanks to the state budget stalemate.

The Pennsylvania Higher Education Assistance Agency, or PHEAA — the agency that disburses the grants — notified students and schools of estimated grants this year once its board approved a preliminary budget. That document called for the state to maintain the agency's prior year allocation of $344.8 million. PHEAA would kick in $75 million from its student loan servicing business.

Preliminary estimated awards, sent out this summer, had the maximum need-based PHEAA grants topping out at $4,340 this year.

Since colleges and universities include those figures in their final financial aid packages, the grants are an integral part of how many families plan to pay for college.

But PHEAA can't issue a penny until the General Assembly and Gov. Tom Wolf agree on a budget.

“We're watching the budget talks and communicating with schools, but there is nothing we can do until a budget is signed. It's rooted in statute,” PHEAA spokesman Keith New said.

New said most schools agreed to credit PHEAA awards to student accounts when a 101-day stalemate delayed the signing of the budget until October in 2009

“I wasn't aware of any students who were harmed then,” New said.

But as the start of the fall semester looms and lawmakers and the governor are seemingly as far apart as ever, cash-strapped colleges and universities that funnel the PHEAA awards to students are scrambling.

Some will dip into their own funds and credit awards to student accounts until the money arrives.

At California University of Pennsylvanial, where about 2,000 students, or about 30 percent of the student body, received PHEAA grants last year, the school will do as it did in 2009 and award the PHEAA grants to each student's account.

“The university will be covering the grants until we can seek reimbursement,” Cal spokeswoman Wendy Mackall said.

Stephanie Hendershot is director of financial aid at Robert Morris University in Moon, where about 40 percent of the students receive PHEAA grants. She said the school is considering taking the same route it took in 2009.

“At that time, we did not disburse grants until the money was released. The amount of the grant is still credited to the student's account. If there is excess (after tuition and other fees), we will let them credit that toward books at the bookstore,” she said.

Then, RMU agreed to consider requests for emergency disbursements — most from students counting on the money for off-campus living — on a case-by-case basis.

RMU does not disburse awards until the end of the second week of classes. This year, that means no grants would have been disbursed until Sept. 7, so there is a possibility the budget could be signed and money transferred beforehand.

Although the PHEAA grant freeze has attracted little attention, Hendershot said her office has already heard from concerned parents, calling to know what the budget impasse might mean to their students.

She said RMU will keep families updated as the situation progresses.

At Seton Hill University in Greensburg students will not be penalized for late fees for parts of their bill not paid because of the freeze on PHEAA grants.

“The university will be in contact with students impacted by the budget impasse as the situation develops to make sure they are apprised of how Seton Hill plans to handle the grant freeze,” university spokeswoman Jennifer Reeger said.

At the Community College of Allegheny County, where 8 percent of the students receive such awards, officials expect no problems from the state budget stalemate, college spokeswoman Elizabeth Johnston said.

Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or

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