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NEWS
[ Friday, Aug. 26, 1988 ]
 
PHEAA to get state grant

Collegian Staff Writer

Gov. Robert P. Casey has granted the Pennsylvania Higher Education Assistance Agency $75 million in additional funding for this year, an agency spokesman said.

John Ebersole, spokesman and Public Information Officer for the PHEAA, said the additional funding will support the agency's bond-based programs, which provide loans to students who do not qualify for federally-subsidized guaranteed student loans.

"Governor Casey has been very generous when it comes to supporting higher education," Ebersole said.

About 25,000 new students will receive non-subsidized, bond-based guaranteed student loans (GSL) because of the funding increase, Ebersole said. The total number of students receiving those loans was unavailable, he said.

Rod Snyder, Pennsylvania Deputy Public Information Secretary, said PHEAA had been authorized to spend $35 million this year.

"The money is a result of additional bonding authority the governor has allocated," Snyder explained. "The state allows PHEAA to float bond issues, which they then use to support the loans."

Students with federally-subsidized GSLs must pay only the principal of their loan upon graduation. Students who receive non-subsidized GSLs must pay the principal in addition to the interest during the school year.

Robert Evans, University director of financial aid, said the additional funding was necessary for the program to continue.

"From what I've been told, this money was needed just to continue the (non-subsidized GSLs) through the end of this year."

Evans estimated about 20,000 students at University will receive aid backed by PHEAA this year.

"The (subsidized) GSL is by far the most common method, but there are other means (of financial aid)," he said.

Evans indicated that bond-based loans, as well as loans from out-of- state agencies for non-Pennsylvania students, are present at the University as well.

Jay Evans, PHEAA deputy for loans, said 316,000 students received federally subsidized GSLs from PHEAA during the year ending June 30, 1988. Awards averaged $2,288, he said.

"The funding increase only affects the bond-based issues," he said. "The federally-subsidized loans are restricted in their funding."

Ebersole said the distribution of federally subsidized GSLs was based on a need analysis, which he termed "a mistake."

"The need analysis bumps a lot of people out of the program," he said.

Ebersole said the need analysis was originally designed for federal grant programs, rather than loans.

 



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