As with most state agencies, PHEAA continues to operate remotely. Rock the Capital attended the conference call meeting and recorded audio. We also took notes on the PHEAA board meeting for interested parties.
PHEAA Board Meeting Notes
1. Call to order (10:03)
a. Meeting minutes from the 3-19-20 PHEAA Board meeting approved unanimously
i. Blake (motion), Fontanna (second)
3. Committee Reports
a. Executive Committee – Report given by Robuck
i. Executive Committee met on 4-22-20 to discuss finances, technology, legal and a regulatory update
4. PA State Grant & Special Programs Summer 2020 – Coronavirus
a. A memo was provided to the Board in their packet
b. Report given by Robuck
i. There is a delay awarding formula until the May meeting to see if the Legislature will add any additional money. The plan is to relax certain rules that limit students to hold onto money due to school and virus issues.
ii. The recommended resolution would allow the CEO to suspend programs required for the summer term. It allows grants to be used for online classes for multiple programs such as the grant program and the IAG program, among others (they read them too quickly for me to note).
iii. Resolution approved unanimously
1. Fontanna (motion), Carrol (second)
5. Operations Update/COVID-19 Borrower Relief
a. PHEAA 3rd Party Service Clients
b. Timeline Report given by Steph Mortella
i. 3-11-20 – PHEAA received questions about loan options for affected clients. They informed them that the options were:
1. Legacy Loans FELP (?)
a. Natural Disaster Forbearance for up to 90 days, no interest, customer must request, collections continue
2. Private Loans
a. Natural Disaster Forbearance applies, if there are late payments then no change in interest rate, increase the loan term, interest waivers available for loans that are current, all collection efforts will stop, credit reporting will be changed to a Natural Disaster Code which has a neutral effect on the borrower’s rating
ii. 4-3-20 – PHEAA sent standard letters to all borrowers explaining their options to them.
iii. CARES Act
1. All collection efforts were halted on 4-1-20
2. 7.5 million accounts had their interest rates adjusted to 0% for the period of 3-13-20 to 9-30-20
3. Forbearance began on 3-13-20 and will go through 9-30-20 with no capitalization of the interest rates.
4. All previous delinquencies have been removed
5. No negative reporting to the credit agencies
6. 30 million adjustments were made in a 3 week period
7. The website was updated with self service options
8. No document required for relief options
9. PHEAA sent outreach emails and put relief options on statements
iv. PHEAA operations timeline
a. some business activity was suspended and telework was offered to some employees who were already set up for it.
b. AEF center was closed.
c. Fed loan servicing had an increase in waiting times
d. PHEAA building was sanitized
e. Telework options were put in place for all employees
a. Declared an essential service by the Governor
b. Gave staff devices to work from home
a. 90% of staff were working from home
a. Normal operations resumed
v. Update by Andy Mahalko
1. PA Forward Portfolio
a. $37.3 Million
b. $8.9 Million in active repayment status
c. $60 Million in legacy loans
d. $3.4 Billion in FELP (?) portfolio
e. 3 month forbearance with no payments, no interest, permanently clear previous delinquencies to both the borrower and cosigner
f. All borrowers who were refinancing were contacted to tell them about the CARES Act and informed that refinancing would possibly prohibit them from benefitting from the CARES Act.
g. No late fees applied, interest rate begins to accrue at the end of the forbearance term but does not capitalize.
2. Washington Update
a. PHEAA has been getting weekly updates from Capital Hill
b. 4-20-20 was the first online update for members
c. FELP loans are not covered under the current bailouts and PHEAA is trying to change that.
d. PHEAA secured a letter signed by 25 organizations encouraging Congress to cover the FELP loans in the bailouts
e. Representative Stefanic introduced the Equity in Student Loan Relief Act which is a bipartisan bill to bring relief to FELP loans.
f. CARES Act – the money can’t be used for salaries or bonuses
6. DTS Update – Given by Doug King of PWC
a. Data Center Migration
i. Completing migration from the Harrisburg Center to the new 200 acre, underground, Iron Mountain Facility
ii. Migration is 90% complete
iii. Migration should be completed by 4-28-20 with the Harrisburg center closing in early May
b. Remote work capabilities
i. Work enablement is complete
ii. 93% of staff are now working from home
iii. 1,800 staff were working from home in less than 2 weeks
iv. Bandwidth was doubled
c. DTS COVID-19 response
i. Suspension of collection efforts were done on all accounts
ii. Interest rate was stopped on 4-10-20
iii. They are still working to make sure it works for new loans and for all borrowers moving forward
iv. Planning on how to handle the end of the forbearance period on 9-30-20
7. Executive Session
a. Began at 10:49
b. Ended at 11:15
c. Discussed finances and legal issues
8. President and Chief Executive Officer’s Report – This entire section of the Agenda was skipped.
a. James Steeley, President and CEO – Review of slide #2
b. Andrew Mehalko, Chief Financial Officer – Review slides #3 and #5
c. Jean Svoboda, Chief Legal Officer – Review slide #6
9. Other Business – This entire section of the Agenda was skipped.
10. Adjournment at 11:15