Executives at the Pennsylvania Higher Education Assistance Agency told their board on January 16, 2020, that they had concluded negotiations with the Department of Education. The negotiations included a two-year extension to act as the sole service provider of the Public Service Loan Forgiveness program.
PHEAA, the largest student loan service provider in the country, signed the contract extension in December 2019 without pricing increases. Additionally, the agency is limited by the same pricing conditions that have been in place since 2009. This year marked the signing of the first ten-year, $1.3 billion contract between PHEAA and the Department of Education.
PHEAA, previously criticized for aggressive loan processing, poor customer relations, and numerous scandals, committed to cleaning up a tarnished image. The goals PHEAA outlined to board members gave consumer advocate Eric Epstein, a close monitor of PHEAA for fifteen (15) years, cause for optimism.
Epstein commented on PHEAA’s strategic plan and good-faith effort to rebrand itself. Mr. Epstein observed that PHEAA had a long way to go for an image makeover after they allegedly failed to inform borrowers of low-cost repayment plans. “They have to find the middle ground between being compassionate agents of change and efficient collections,” Epstein said. “It’s difficult.”