www.HouseAppropriations.com/HDAPPROPS@hacd.net 717-783-1540 Higher Education: Primer March 25, 2022 - Page 15 Changing PHEAA Resources The PHEAA State Grant Program is predominantly funded by state appropriations, but other funding sources like its business earnings and federal dollars play an important part. The mix of appropriated, non-appropriated and non-state resources is important for policymakers to monitor, because it creates a risk that students will see their financial aid awards change dramatically between years. In some years, PHEAA has been able to use its business earnings to augment the state appropriation for PHEAA grants. Of the total amount provided by business earnings and General Fund appropriations, PHEAA’s resources comprised almost one-third of the amount in 2015/16 and around 27 percent in 2018/19, but did so amidst declining net income at the agency. A cautionary example of what can happen when PHEAA is unable to contribute additional resources comes from 2008/09 to 2010/11, when underlying business pressures on PHEAA precluded any augmentations and dramatically reduced the total pool available for student aid, amidst growth in the number of students who qualified for a grant. The 2019/20 fiscal year once again saw a significant reduction in the amount of augmentations due to increased financial pressure on PHEAA. In response, the General Assembly increased the state grant appropriation by $37.3 million, or 13.7 percent. The additional appropriated resources, along with a smaller applicant pool and carryforward resources were able to maintain the maximum state grant award, year-over-year. In 2020/21, the General Assembly appropriated $30 million in Coronavirus Relief Fund dollars to augment PHEAA grants. This temporary boost from federal resources did not recur in 2021/22, but the maximum award actually increased despite flat state appropriations because the number of students applying for aid is expected to decline significantly.
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