PHEAA gives executives half-million in bonuses
The student-loan agency said the awards were merited. "Disturbing," Rendell's spokesman said.
HARRISBURG - Pennsylvania's student-loan agency awarded more than a half-million dollars in bonuses to its top executives yesterday, prompting new criticism of its spending by Gov. Rendell's administration.
A Pennsylvania Higher Education Assistance Agency spokesman defended the bonuses as legitimate rewards for a wide range of financial accomplishments. He also said less money was being spent on the bonuses because the agency had fewer executive vice presidents than it did last year.
The biggest bonus approved by an executive committee of PHEAA's 20-member board went to PHEAA's top executive, Richard E. Willey, who will receive $180,857 in addition to his annual salary of $289,118.
Bonuses of $113,514 each were awarded to Tim Guenther, executive vice president and chief financial officer; Brian Lecher, executive vice president of information technology and chief information officer; and James Preston, executive vice president of client relations and loan operations. Kelly Logan, executive vice president of public service and marketing, received a $52,436 bonus.
PHEAA spokesman Keith New said the agency's accomplishments last year included providing $200 million from its business earnings to pay for things such as loan forgiveness, discounted loans and scholarships, and saving borrowers nearly $100 million in up-front fees on student loans.
"Without that level of success, we would have no money to give back to kids," New said.
Rendell spokesman Chuck Ardo said the bonus payments were "disturbing, to say the least."
"This is another example of the agency's failure to understand that its mission is to help students pay for college and not to provide further compensation for well-paid executives," Ardo said.
PHEAA, a nonprofit corporation created and largely controlled by the legislature, finances its operating expenses from its own income, but dispenses nearly $500 million a year in state taxpayers' money in the form of student grants and subsidies.
The bonuses are being awarded months after Rendell and some state lawmakers chastised the agency over its travel spending. The spending came to light in records PHEAA was forced to release in March after losing a 19-month legal battle with the Associated Press, the Harrisburg Patriot-News, and WTAE-TV in Pittsburgh.