Pennsylvania’s student financial aid agency to close two offices in a cost-saving move

Pennsylvania’s student financial aid agency announced Wednesday that it will be closing the offices it operates in State College and Pittsburgh around the end of next month.

That will leave the Pennsylvania Higher Education Assistance Agency with only its Harrisburg headquarters. At one time, it operated out of five locations across the state.

This decision to make an early exit from the leases for those offices is expected to produce a net savings of more than $1 million, based on expenses outside the lease over the remaining term, according to the agency.

The estimated closure date for those offices is Nov. 30. No employee layoffs will result, said agency spokesman Keith New.

It comes as part of PHEAA’s transition out of the role it has held for the past 12 years as a federal student loan servicer. The agency announced in July it was not going to seek another extension to its 10-year contract that already had been extended two additional years.

Instead, agency officials said PHEAA wants to focus on aid programs targeted to Pennsylvania students.

PHEAA’s obligations to meet the Federal Student Aid expectations and its student loan borrower customer service requirements remain until all the Direct Student Loan Program, PSLF, and TEACH loans are transitioned to another servicer, according to an agency notice to employees.

PHEAA will continue to recruit and hire clerical wage employees in the State College, Pittsburgh and Harrisburg areas to help it fulfill those obligations to the federal government, New said. Those employees will work remotely.

“The State College and Parkway Call Center facilities have been mostly unoccupied since the beginning of the pandemic, as employees have predominately been working remotely,” stated the notice to employees. “As such, it does not make sense to continue to pay for leased space that is largely unused and unoccupied.”

The notice went on to say PHEAA could make the change due to the technical enhancements made over the past two years, including the ability for workers at those locations to work remotely.

“Please be assured we did not come to this decision lightly, and we are working to minimize the impact on employees who currently work at these locations,” the notice said.

PHEAA has been making a series of moves in recent years to cut its operating costs.

Earlier this year, it offered a retirement incentive that resulted in trimming 37 people from its workforce of about 2,200. That is estimated to result in an annual savings of $5.1 million.

In 2019, PHEAA announced it was closing its loan servicing center in the Philadelphia suburbs, which came on the heels of a decision to close its Westport Business Center in Lower Allen Township, Cumberland County. In 2018 and 2019, it outsourced more than 300 call center and and data center jobs.

The agency, along with its work as a federal loan servicer, also administers the state grant program and other student financial aid programs along with other related business lines.

Jan Murphy may be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy.

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Pa. student loan forgiveness program for nurses to open up in January

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