Student loan agency’s meeting amid COVID-19 outbreak sets ‘double standard,’ transparency advocates say

PHEAA's Harrisburg headquarters.

Amidst a statewide shutdown that saw many Pennsylvanians confined to home, the state’s taxpayer-supported student financial aid agency voted last week to relax grant requirements for students whose degree programs stand to be affected by the COVID-19 outbreak.

According to transparency advocates, however, the agency didn’t do enough to make its proceedings open to the press and the public.

The Pennsylvania Higher Education Assistance Agency, or PHEAA, approved the limited relief measures for eight different state grant programs during its regularly scheduled monthly meeting on Thursday.

Members of the board attended the meeting via conference call, agency spokesman Keith New said. 

But the call was not accessible to reporters or members of the public, who had to come to PHEAA’s headquarters in Harrisburg if they wanted to observe the proceedings. 

The meeting came near the end of a week in which Pennsylvania leaders repeatedly urged residents to stay in their homes and limit social interactions to mitigate the spread of the COVID virus, which by Thursday had infected 185 Pennsylvanians in 22 counties.

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It also took place as PHEAA’s own headquarters were closed to all non-essential personnel for cleaning, according to an remarks agency CEO Jim Steeley made during the meeting, which was recorded by the good-government blog Rock the Capital.

New said he was one of two PHEAA staffers on-site for the meeting. The only other person who attended was the videographer from Rock the Capital. 

PHEAA provided a clean conference room for the attendees, who took care to maintain a safe distance from one another, New said. 

“The gathering was very small and was consistent with both CDC guidelines and the governor’s recommendations,” New said in an email Thursday night. “Prior to this meeting, the room had been sanitized and hand sanitizing wipes were provided to our guest.”

But Rock the Capital founder Eric Epstein said PHEAA enforced a “double standard” by requiring the press and the public to appear for a meeting that its board conducted remotely.

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“Apparently, PHEAA never got the governor’s social distancing memo,” Epstein said, referring to Gov. Tom Wolf’s repeated calls for Pennsylvanians to limit social interactions and maintain distance from other people. “If the building is shut down, and the board is permitted to call in, why would the public be compelled to violate the social distancing standard, and be forced to sit in a confined room to listen to a phone call?”

Since Wolf announced a statewide shutdown of schools, non-essential businesses, and public gatherings, the COVID-19 outbreak has forced Pennsylvania’s government officials to find new ways to conduct urgent business without violating public trust or state open meetings laws. 

The state House and Senate both approved temporary rules last week that will allow members to convene remotely to consider legislation related to the COVID-19 outbreak. 

Government ethics experts told the Capital-Star that upholding transparency and public accountability in these uncharted territories will take some forethought and ingenuity on the part of elected officials. 

“Transparency is always important, but it’s critically important in times of crisis when the public is at heightened disadvantage because of restrictions on movement,” Melissa Melewsky, media law counsel for the Pennsylvania News Media Association, said. “There’s no question that there is technology capable of allowing [virtual] public participation.”

Melwesky pointed as an example to a Pennsylvania school district whose board of directors had to meet last week to fill a vacant seat on their board. 

The directors all dialed into a video conference call to conduct virtual interviews with candidates, and provided a call-in number for district residents to submit public comments, Melewsky said.

Melewsky said the board had to find a way to meet because state law requires school boards to fill vacancies within 30 days.

But if an agency is considering matters that aren’t time-sensitive, Melewsky said, they should delay them indefinitely until they can hold regular public meetings.

New said the action PHEAA took Thursday aims to help students whose higher education has been disrupted by the COVID-19 outbreak, which has forced most colleges and universities to shutter classrooms and residence halls and complete their spring semesters online.

One of the measures the board approved will preserve funding levels for thousands of students enrolled in the PA State Grant Program whose campuses have converted from in-person to online instruction. 

The grant program currently caps grants at $4,123 a year for in-classroom students and $3,092 for students taking virtual classes. Under a waiver the board approved Thursday, students who enrolled in the program to take traditional classes will still be eligible to receive the maximum funding amount.

The board also extended the application deadline for the PA State Grant program by two weeks, from May 1 to May 15.

State lawmakers such as Rep. Malcom Kenyatta, D-Philadelphia have called on PHEAA to halt loan collections as the nation braces for massive disruptions to its economy and labor market.

PHEAA is the second-largest servicer of student loans in the nation, managing a portfolio worth more than $425 billion. It’s also the sole servicer for the federal Public Service Loan Forgiveness program administered by the U.S. Department of Education.

But executives pointed out last week that they can’t change the terms of the loans they service, and must wait on directions from clients to stop collecting payments and interest.

“As we don’t own the loans, we can’t unilaterally make changes,” Steeley said in the meeting Thursday. “We’re dependent on individual clients … to drive those changes.”

One of PHEAA’s biggest clients is the federal government, which announced on Friday that it would suspend payments and waive interest rates on federal student loans for the next 60 days. 

But borrowers who owe money directly to PHEAA might not be as fortunate. 

Borrowers enrolled in PHEAA’s PA Forward student loan program got a break on their interest rates this month, thanks to a bond issuance that was finalized in February, New said.

The terms of that deal prevent PHEAA from waiving interest rates on PA Forward loans entirely, New said on Thursday. 

PHEAA’s board is set to meet again in April, the month that they usually vote on award limits for the PA State grants and other programs. New said the board is “continually” adapting to the COVID pandemic and will discuss options for remote meetings. 

Epstein called on the agency to livestream all its board meetings and provide a teleconference option to the public, saying “there is no excuse for locking the public out of decision making on how we spend tax dollars.”