The Chronicle of Higher Education is among the news sources reporting that the Pennsylvania Higher Education Assistance Agency (PHEAA) has voted to cut spending on financial aid programs in the 2008-2009 fiscal year by a more than half.

The PHEAA will cut state funded financial aid by 58 percent next year if a vote last week is actually implemented. Cuts would include a reduction in the actual number of students receiving state grants, a cut in aid to students pursuing nursing and education credentials, and a reduction in financial aid for job training programs.




The agency's interim president, James Preston, blamed the reductions on cuts in federal subsidies for student loans and on financial markets.

PHEAA is taking heat from the state legislature for bonuses it has given to agency employees and for luxury retreats that it sends employees on. The state auditor recently warned that PHEAA could run out of money after spending almost $4 million on bonuses and retreats, according to Phillyburbs Dot Com.