HARRISBURG -- Gov. Ed Rendell wants to tap the Pennsylvania Higher Education Assistance Agency's operating revenue to put a computer on every high school desk, but agency officials said yesterday that funds are already committed to student aid.
The agency's comments came on the same day it announced $72.5 million in additional grants would be available next school year.
Mr. Rendell's $25.4 billion budget, though, calls for PHEAA's share earnings to be diverted to buy school laptops. The project would take $100 million over five years.
Mr. Rendell also wants to divert other PHEAA funds to capital projects at community colleges.
PHEAA officials said yesterday that they were shocked to hear those plans for the first time during Mr. Rendell's budget presentation last week. The governor still has not explained his rationale to PHEAA, said Richard Willey, the agency's president, during a House Appropriations Committee meeting yesterday.
"I'm at a loss to tell you about the program because we don't know much about it other than what was in the budget," Mr. Willey said. "It came as a surprise."
PHEAA is an independent agency with its own budget and a 20-member board that includes 16 state legislators. The governor doesn't control its budget but can ask for revenue disbursements, said Keith New, the agency's vice president of communications.
Board members have indicated they would consider the governor's laptop proposal, he said.
"It's a good idea, and we'll certainly take a look," he said.
If money were allocated for the Rendell proposal, it would come at the expense of grants and awards that college students already are counting on, Mr. New said.
Last year, PHEAA generated $148 million in operating income, and dispersed nearly all of that in the form of grants, scholarships, discounted loans, loan forgiveness, online college planing tools and the KeystoneBEST student loan.
Next year's $200 million budget already is committed to similar programs, including the grant increases announced yesterday.
The governor's office contends PHEAA's money could be better used.
"PHEAA has a large pool of money just sitting in a bank account collecting interest," said Charles Ardo, spokesman for Mr. Rendell. "The administration feels there are better uses for that money."
Mr. New said there is no such pool of money.
The agency allocates nearly all of its income to its programs, reserving only the amount needed to meet federally required fund balances. Mr. New could not immediately provide that amount yesterday afternoon.
Mr. Willey said it isn't clear whether the proposed expenditures would be allowable under the agency's charter.
"We were created to provide post-secondary financial aid access. That's been the mission of PHEAA for 47 years," he said.
Mr. Ardo, though, said any education-related expenses are allowable.
"PHEAA was created to aid education and the governor's proposal is certainly intended to do that," he said.
State Rep. Jake Wheatley, D-Hill District, said the governor's plan may need to be retooled.
"It would be great to find a way to do what the governor is suggesting, but it may not be feasible to fund it through the source he is suggesting," he said after the committee meeting. "The governor's intentions are good, but I'm still trying to understand where exactly PHEAA would be able to get this money."
Meanwhile, PHEAA announced that state grant awards will rise $490 each, bringing the average award up to $3,035. Some 172,000 students will receive the grants.
PHEAA's revenue comes from interest, profits from the buying and selling of loans, software development and fees for guaranteeing federal loans and servicing private student loans.
