The Pennsylvania Higher Education Assistance Agency yesterday announced 264 employees have accepted voluntary buyouts that will save the agency $20.4 million a year.

That amounts to more than 25 percent of the 1,008 employees who were eligible and more than 10 percent of the total work force of 2,144.

"When we initially started, we were hoping maybe $10 million," said state Sen. Sean Logan, D-Monroeville, vice chairman of the PHEAA board.

With $54 million in other savings instituted last year, Mr. Logan said, "we're well on our way to right-sizing the organization and living within our means."

PHEAA last year began cutting expenses after coming under criticism for six-figure bonuses for executives and perks such as spa treatments.

Its problems deepened as the housing credit crunch hurt the student loan market, resulting in PHEAA announcing that in March it was temporarily ceasing activity as a lender in the Federal Family Education Loan Program, called FFELP, which includes some Stafford loans.

With less income, PHEAA this fall will have to reduce the size of state higher education grants available to students.

Last year, the maximum grant was $4,700 a year. PHEAA estimates this year it will be at least $4,000, said spokesman Keith New. The actual figure will be determined once state budget details are final.

The voluntary buyouts were available to nonunion employees with at least two weeks of service.

The package included two weeks of pay for each year of PHEAA service, with a minimum of eight weeks and maximum of 16. There were also some other benefits, including sick leave payouts for those who were 60 years old or had 25 years of service.

The employees had until Monday to reconsider.

PHEAA figures the average annual savings per employee at $77,039.

The package has an average one-time cost per employee of $21,750.

The average annual salary of those accepting the offer was $60,781, with a high of $158,350 and a low of $25,857.

The highest-ranking official leaving is Timothy Spigelmyer, senior vice president of loan operations. Six vice presidents and five assistant vice presidents also left.

PHEAA no longer markets loans outside of Pennsylvania, so it closed the departments that used to do so. It also may move some employees around once it assesses where needs exist.