('

• James L. Preston is President and Chief Executive Officer (CEO). Mr. Preston joined the Agency in April 2003. Mr. Preston served as interim President and CEO from October 2007 until March 2008. Prior to assuming this role, Mr. Preston was Executive Vice President of Client Relations and Loan Operations. Prior to joining the Agency, Mr. Preston held various investment banking positions with L.F. Rothschild, Unterberg, Towbin, Bear Stearns and Co., and UBS PaineWebber. Mr. Preston received his Master of Business Administration in Finance from State University of New York at Albany.

• James H. Steeley is Senior Vice President and Chief Financial Officer (CFO). Mr. Steeley joined the Agency in November 2015. Prior to assuming this role, he was Senior Vice President, Corporate Controller and Chief Accounting Officer at Susquehanna Bancshares, Inc., the Assistant Vice President of Finance at the Pennsylvania State Employees Credit Union (PSECU) and a Senior Manager in Financial Services Practice for PricewaterhouseCoopers LLP. Mr. Steeley is a Certified Public Accountant licensed in the Commonwealth and earned his Bachelor of Science degree in Accounting at Elizabethtown College.

• Elizabeth McCloud is Vice President of State Grant and Special Programs. Ms. McCJoud joined PHEAA in September 2015, following 20 years of work in higher education, most recently serving 1 O years as Director of Financial Aid at Elizabethtown College. As Vice President she oversees Research and Policy Analysis and provides leadership, strategic planning, management and administration of policies that govern or impact the State Grant and Special Programs area, with an emphasis on the policy impact on students and postsecondary institutions. Ms. McCloud holds a Bachelor of Arts degree in Political Science from Indiana University· of Pennsylvania.

Plle.aaj Pennsylnnia Highe1 Education Assistante Agency

2

PIKBl) Pennsylvanla Klgher E.ducaUon Asslslance Agency

---

fed loan~ ~-·SERVICING

The Pennsylvania Higher Education Assistance Agency (PHEAA) - Created by the Pennsylvania General Assembly to provide support for higher education in the Commonwealth.

American Education Services (AES) - Our mission and vision led us to service loans for students and families beyond Pennsylvania's borders, under the name AES.

Fedloan Servicing - In July 2009, PHEAA was chosen by the United States Department of Education to service federal direct student loans. Fedloan Servicing builds upon PHEAA's 50-plus years of student aid experience and industry-leading customer . service.

3

1. Federal and alternative loan servicing » Fedloan Servicing*

o Servicing federal loans for the U.S. Department of Education • 7.6 million federal student loan borrowers

• $293 billion in loans 0 Public Service Loan Forgiveness Program (PSLF)

• Sole servicer - 500,000 participants pursuing loan forgiveness by working in public service careers 0 Teacher Education Assistance for College and Higher Education Grant (TEACH) Program

• Sole administrator - 140,000 participants

)) American Education Services 0 2nd largest servicer of FFELP and alternative loans

• $43. 7 billion in loans for nearly 2.2 million borrowers

2. Remote systems provider ,, $15.1 billion managed through remote servicing clients for 2.8 million borrowers*

3. Secondary market - holder ,, One of the largest holders of FFELP student loans » $5.4 billion of loans owned***

4. Federal loan guarantor ,, Ranked 2nd largest guarantor of outstanding guaranteed loans in repayment » $32 billion in FFELP loans*

•As of 12.12.16 ••• As of 01.31.17

PIKB(J Pennsylvania Higher Education ~lstance Agency

4

Federal Servicing Contract • 5-year contract, up for renewal in 2019

Solicitation for Federal Aid Servicing Solution • Increased consistency, improved oversight and reporting, and enhanced

borrower experiences

• PHEAA partnered with global tech leader, IBM

• One of three (out of five offerors) selected for Phase 2

• Department anticipates awarding contract in the 1st half of 2017

• Awaiting direction on the next steps

PllSlaj PenllS)'lvania llightr Education Assislince Agenty

5

$400,000,000,000 l TOTAL 387.5 • $375,000,000,000

$350,000,000,000

$325,000,000,000

$300,000,000,000

$275,000,000,000

$250,000,000,000

$225,000,000,000

$200,000,000,000

$175,000,000,000

$150,000,000,000

$125,000,000,000

$100,000,000,000

$75,000,000,000

• 3n1 Party-Owned Assets (AES)

$50,000,000,000

• Guarantee Volume $25,000,000,000

• PHEAA-Owned .. $0 · Assets !AES)

I 2012 2013 2014 2015 2016 • Federally-Owned Assets

(FedLoan Servicing) _.. 6

$400,000,000

$375,000,000

$350,000,000

$325,000,000

$300,000,000

$275,000,000

$250,000,000

$225,000,000

$200,000,000

$175,000,000

$150,000,000

$125,000,000 NUMBER OF PERSONNEL

$100,000,000 4000

@Personnel $75,000,000

3000

• Default Inventory $50,000,000 2000 • Loan Guarantee Volume

• Total Servicing Volume $25,000,000 1000

llndudi119 Student Loan Holding•)

$0 0

2012 2013 20t 4 2015 2016

7

PHEAA Access Partners

14 Higher Education Access Partners supporting students and families with hands-on assistance Conducted 3,914 events during 2015-16, including: • 970 financial aid, FASFA completion and early awareness events for 32,787

participants

• 109 training workshops for high school counselors and community organizations

• 1,871 site visits and professional interactions with postsecondary schools and staff

• 181 other outreach initiatives, including community events, many held in cooperation with local legislators

Piie.a() Prnn$Jlnnia Higher Education Anista!IC! AgentY

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Online Resources

• MySmartBorrowing.org - Engages high school students and families early in the planning process before decisions are made to borrow money - helping them to make smart choices as they develop their higher education success plan

• EducationPlanner.org - One-stop career and college-planning resource

• YouCanDealWithlt.com - Helps graduates and soon-to-be graduates prepare for life after college with debt management and career development advice

• PHEAA.org - Useful information on available state and federal student aid programs, including the Pennsylvania Student Aid Guide

PIKBl) Pennsylvania Higher Education Assistance Agency

9

Program Highlights

• Since inception in 1966 » More than $10.6 billion awarded

» 2.6 million student recipients

• 2016-17 » $272.891 million state appropriation

» $87 million PHEAA supplement

» 134,400 award recipients

» $4,378 maximum award

» $3,270 average award

PllCa(J Pennsylvania Klgher Education Assistance Agency

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Average State Grant Award as a Percentage of Average Tuition & Fees at 1Postsecondary Institutions

AVERAGE AWARD 25% AS% TUITION & FEES

20%

15%

10%

5%

17 .2.%

10 0· I

03--~~~--~~~--~~~---~~~--~~~--.~~~~--~~~....-~~---

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2011-10·

PROGRAM YEAR

-@)- No Supplemental Funding

_. Supplemental Funding ($87M Proposed for 2017-18)

11

$12,000

$11,000 $10,115 $10,193 $10,238 -$10,000

$9,000

$8,000

$7,000

$6,000

$5,000

$4,000

$3,000

$2,000

$1,000

$0

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2011-1s·

• Maximum Actual Federal Pell Grant

• Maximum Actual State Grant

• Estimated Maximum State Grant - Proposed $87M PHEAA Supplement 12

Stale Grant Program

Institutional Assistance Granls llAGI Program As~st~ 1ndcpc:ndrnt, poststC'Onrt.uy insh-:ut1on~ m:11rr.la1n cnrolimeM ln1!ls anct s!<1b1lizt the r t"dUc.JI "' :a .. 1.s..

Matching Funds Program PnMdu •match lor fed•r.il Ind othor fund• to postsocclfld.uy schools. foun<l>ticns, ond omplC'/°" Pr"!lroms cn<lcr th,. umht1!Ua inc udo rtdcral and Slate \'lcrlt Stud/ Programs •nd Portnerslups tor l=Hs to Hlcjhor Eduutlon tPAlHI.

Higher Education for Disadvantaged Students !Act 1011 Provtdu suppor1 sel"\1crs for u.ndrrtJr<ld:Jalt 1tudcnts.whosc econom~( or cduca:·on.Jl d1s.3dv.Jnta9n m1c:;M impede t~e1r •~ihty to s..:ic;!"euh.l.t pur'u~ h!9hcr rdu at • .ln opportun~hH

Higher Education of Blind or Deaf Students Heqls to dtfny lhe n«Ms.&ry npenws .f •NY blWd crdHI Uudtnl wt\o fS i1 Penrrs)tvolnb rt~ht MMt K tN'Ol:lifd., an eU91b~• lnshH.1uon of t\:ghcr Pdu<ahCHl.

I Pennsylvania Internship Program PnMdts ~th ilars.~p> lo rA m1dcn:~ 01tlc1"1d1n.J PA b..lsl'd cot!eqc~ :11ut unM-;s:t~fS. iJnd ~UF'$tilfl!J af'11ntcrnship throO!J"I 11• W,15tuni1jt:·J'l ~,flll:"f' frir lntc .. ns •i tJ i. ,w:J Audrm1c Stm1n~r.s.

Ready to Succeed Scholarship IRTSS) Program r..nc1.rg lor tugh achieoring sludonb ln>m middle· r><omc Penns)Mnb f•miliH.

Bond-Hill Scholarship ICo·Mm1m•l•red with PDfl

Cheyney Keys lone Academy Program tco·Admlnlol•"'<I with PASSHEI

PHEAA Stale Grant Program Supplement

Distance Education Pilot Program

PA Targeted Industry Program IPA-Tl Pl P....idu ~rants to students tor"""'""'" of study tHs th3n 2 yearw '"length '" the 09ncu·1ur-e. cntrgyor altnr><ed manutoc•un"'I, .., ..

Cheyney Keystone Academy Program Supplement

Primary Health Care Practitione r Loan Repayment Program

n/• •not appUcobta • The Oo·.-crncr"s bulfgct proposes .-il'l institution m:titC~™J rt'qu:rcment fer ll'lt: tAC PrQ«Jtol'n

$266,235,000

$25,121,000

$ 12,496,000

$2.246,000

$47,000

$350,000

$5,000,000

$53/,,000

$1,525,000

$125,000,000

$10,000,000

$6,000,000

n/a

n/a

I $272,891,000 $272,891,000

$25,749,000 $12,874,000•

$12,496,000 $12,496,000

I $2,246,000 $2,246,000

I $47,000 $47,000

l $350,000 $350,000

I $5,000,000 $5,000,000 I

I $697,DDD $697,DOD

$1,813,000 $1,813,000

l $87,000,000

f ~~.--I $10,000,000 $10,000,000

I

I $6,000,000 $4,000,000

'

f

n/a $500,000

n/a I $4,550,000

., Progr31'fl suppttm•nt and surport for 2U17 · 18~1\1 tt C1etermin1~ b·{lhe PHEA,\ Oo~rct of o.r~ttars. during th~ ~0'7 lB Comrr.a:t.\it.ll!h bud; et :>rflC.e:o". Jn t"le Cctctet t! Jd:1t:1 lrans,m .!.lt 0HEAA md. t1tccf :m .-in~L.J::JtttJ !01.1pph•meo1 t:if 'S5Cl.~ far lhr S::'lte Gr3rt Pro9r=1m =1nll SAl.t t.or PA Tff> wit~ noh.1rd n9 :sntJClr;.>ti:td for U1t! Drs~.lnC& (du :ii on Pilcl r>togr.:ni

13

2016-17 PHEAA Supplements PA State Grant Program: Distance Education: PA-TIP:

Total

$87,000,000 $10,000,000

$6,000000

$103,000,000 PHEAA provides an additional $15.3 million annually to cover

administrative costs of programs and services

2017-18 Governor's Proposed PHEAA Supplements PA State Grant Program: Distance Education: PA-TIP: Cheyney Keystone Academy*: Pennsylvania Health Practitioner*:

Total:

• Newly Proposed

$87,000,000 $10,000,000

$6,000000 $500,000

$4,550,000

$108,050,000

14

Supplements

• PHEAA's business earnings have fully self-funded the Agency's general administrative budget since FY 1987-88, saving taxpayers hundreds of millions of dollars over the last 30 years

• PHEAA has provided approximately $650 million over the last six years, including FY 2016-17, in direct and indirect funding to support student aid programs and services for the Commonwealth

• As always, any proposed allocation of PHEAA resources remains subject to the Board of Director's review and approval, which would most likely be addressed at their June 2017 Board Meeting

PllfBl) Penl!SJ\vania Higher £dvtalion Assistance Agency

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