January 16th, 2020 marked a regular meeting of the PHEAA Board of Directors. Rock the Capital attended and recorded the session.

Highlights of the meeting minutes follow. Interested readers can download the view the minutes in their entirety on the PHEAA web site.

Chairman Peifer called on Mr. Steeley. Mr. Steeley thanked the Chairman and provided historical context around the evolution of the Agency’s approach to strategy. He stated that PHEAA adopted a new strategic plan two years ago which was the first time holistic look at strategy in over a decade. In 2008, PHEAA wrestled with the financial crisis which limited PHEAA’s ability to lend to Pennsylvanians as well as the end of the FFELP program in 2010, the program PHEAA used for its first fifty years to lend under. With the abrupt end to these programs, PHEAA became focused on being a large federal servicer for Federal Student Aid (FSA). In the early years of servicing for the federal government, PHEAA performed well. PHEAA was very good at servicing its own FFELP loans and built out expertise at doing third party servicing for others, mostly banks, credit unions and other state agencies. However, as the federal contract progressed, many of the processes were used for FFELP were not scalable to Direct Loan volume. This was especially true as the federal program became increasingly complex with numerous income driven repayment plans. In addition to our processes not being scalable, neither was our legacy technology which led to an ever increasing growth in IT costs.

Mr. Hench discussed the second level of PHEAA’s strategy map, “Grow.” The first part is to improve the customer experience across all lines of business and to invest in digital channels and interactions that are consistent and increase borrower self-service. The second part is to invest in lines of business, to expand software-as-a-service business and to introduce new private loan products like the PA Forward Student Loan program, expand existing student loan inventory and pursue new servicing and white labeling opportunities with our IT platforms as a saleable product.

The first goal listed is capital markets and to increase PHEAA’s balance sheet. This goal was achieved by disbursing $60 million of PA Forward Student Loans. The second goal is the work stream for Software-as-a-Service and increasing PHEAA’s white label opportunities and the number of new clients. The third strategic goal is expanding existing student loan inventory as a third party servicer with commercial clients. The fourth strategic goal is to reduce overhead expenses as PHEAA increases its digital space. A fifth goal was recently added to the strategic plan around Customer Experience. He stated that Mr. Mike Garman has been named the executive sponsor. Work streams will be defined around two components: (1) providing soft skills to PHEAA’s customer service representative across all lines of business, and (2) reviewing the processes around customer communications and sending the right tone from each avenue of communication from each line of business.

Readers who wish to learn more about the organization’s plans to remain profitable and relevant can view the PHEAA Board meeting in its entirety.

PHEAA Meeting, 1-16-20 from Rock The Capital on Vimeo.