HARRISBURG -- Publicly funded spa treatments, limousine rides, theater tickets and fly-fishing expeditions are things of the past for officers of the Pennsylvania Higher Education Assistance Agency.

Agency board members unanimously approved a new travel policy for themselves and employees yesterday, two weeks after a court ordered PHEAA to release spending records that detailed high-priced dinners, golf outings, bar tabs and other expenses incurred during agency retreats.

From now on, board members will be reimbursed for travel based on federal per diem rates established by the Internal Revenue Service. Those rates vary by locale. The rate for Pittsburgh, for example, is $154, according to the IRS Web site. Philadelphia's rate is $202, New York City's is $278 and Wheeling, W.Va.'s is $115.

PHEAA employees will continue to be reimbursed for actual expenses but now must follow stricter spending rules that prohibit public money from being used for airline upgrades, room service, personal entertainment, limousines, dry cleaning, shoe shines, alcoholic beverages and more.

The policy also requires them to use the lowest-priced rental cars, prevents "excessive or extravagant" expenses related to entertaining clients and even instructs them to avoid toll roads when practical.

"These changes were needed to make our travel policy and our internal controls -- to make this organization -- more responsible and more accountable to the students of Pennsylvania," said the board's chairman, state Rep. William Adolph, R-Delaware.

Donna Cooper, the governor's policy director, said the policy doesn't go far enough because it doesn't include limits on PHEAA's use of state planes, but it's a good start.

"We'll see if the changes result in more responsible behavior," said Ms. Cooper, who yesterday served as Education Secretary Gerald Zahorchak's representative on the board.

Previously, PHEAA officials and their spouses used the agency's public funds for everything from $95-a-plate dinners to $175 falconry lessons and $189 spa treatments, The Patriot-News of Harrisburg reported after reviewing thousands of PHEAA spending documents.

In addition, public funds were used for members' spouses to travel on the state plane, receive spa treatments and take cooking classes.

The records were released after a 19-month court battle in which the agency claimed its travel receipts were not public because they contained trade secrets. The Associated Press, The Patriot-News and WTAE in Pittsburgh requested the documents under the state's Right-to-Know law.

The records showed that board members spent $862,000 on retreats in Virginia, California, Pennsylvania and the Dominican Republic between 2002 and 2005. Retreats ended in 2005, the same year the three news media organizations requested the expense documents.

"Imagine what they could have done with that money," said Dennis Baylor, one of several protestors who displayed signs and an inflatable pink pig outside the agency offices during the board meeting yesterday.

"They could have sent a lot of people to college. They could have changed lives," said Mr. Baylor, who heads the watchdog group Pennsylvania Accountability Project.

Richard E. Willey, PHEAA's chief executive officer, said those expenses accounted for $1.7 million in spending, or one-sixth of a percent of the $286 million to operate PHEAA's student loan business.

Still, Mr. Adolph said, some of the travel expenses were "mistakes" and he apologized to agency employees who may have been embarrassed by news reports of the spending.

"We are confident that this modified policy will address any past spending issues that PHEAA had," he said.

The new policy defines business expenses as "those that are necessary to the operations of PHEAA, those that benefit or advance the interest of PHEAA, and those that meet the requirements of reasonableness."

Some entertainment expenses are necessary, said the board's vice chairman, state Sen. Sean Logan, D-Monroeville. Members need to entertain prospective lenders to compete in the student loan business.

"If you can invest $860,000 and your return on that is $100 million in business growth, any smart business person -- or even any dumb business person -- is going to say 'yes,' " Mr. Logan said.

Said Mr. Adolph: "We cannot stop marketing PHEAA without jeopardizing the earnings [for the loans] that so many families depend on to help them afford college. ... When our CEO or other management team members travel to locations around the country, they are doing so on behalf of Pennsylvania students and their families, and it is clearly paying huge dividends."

PHEAA is the state's second largest lender, after PNC Bank, and the nation's biggest provider of student loans.

Its operations are funded through business earnings, not tax dollars.