HARRISBURG, PA (WSKG) — The Pennsylvania Higher Education Assistance Agency is digging into its reserves to keep money flowing into a grant program for Pennsylvania college students in the coming fiscal year.
However, they’re warning this could mean little or no money for the effort the following year.
PHEAA manages hundreds of billions of dollars in federal and commercial student loans, and pumps some of the revenue from it into the grant program.
But money is tight right now, so the group had planned to cut its $100 million contribution in half.
That would have meant more than 150,000 students potentially losing out on hundreds of dollars.
Facing pressure from lawmakers, PHEAA spokesman Keith New said the agency ultimately decided to dig into their reserve and contribute the full $100 million.
But he noted, that’ll have consequences.
“I know that you hear that from every corner–every year is a tight year,” he said. “But right now, we’re not predicting the ability to provide a supplement next year.”
PHEAA’s $100 million contribution makes up well over a quarter of the funds for the student grant program. Last year the state contributed $273 million.
New noted, it hasn’t always been that way.
“This program, for most of its existence, was funded entirely by the commonwealth,” he said. “When we reached the point where we exceeded our operating expenses, we turned that as a dividend back to the commonwealth…But as with any business operation, earnings can shift and change.”
It’s too early to tell if lawmakers will be able to make that money up the following year.