The Pennsylvania student financial aid agency said on Wednesday it would close its offices at State College and Pittsburgh late next month.
This will leave the Pennsylvania Higher Education Aid Agency solely headquartered in Harrisburg. At one point, it was operating in five locations across the state.
The move to exit leases for those offices early is expected to generate net savings of more than $ 1 million, based on out-of-lease expenses over the remaining term, according to the agency.
The estimated closing date for these offices is November 30. No layoffs of employees will result, agency spokesman Keith New said.
It is part of PHEAA’s transition out of the role it has held for the past 12 years as Federal Student Loans Manager. The agency announced in July that it was not going to seek another extension of its 10-year contract which had already been extended for two more years.
Instead, agency officials said PHEAA wanted to focus on aid programs for students in Pennsylvania.
PHEAA’s obligations to meet the expectations of Federal Student Aid and its customer service requirements for student loan borrowers remain in effect until all loans from the Direct Student Loans Program, PSLF and TEACH be transferred to another department, according to a notice from the agency to employees.
The PHEAA will continue to recruit and hire office workers in the State College, Pittsburgh and Harrisburg areas to help it meet these obligations to the federal government, New said. These employees will work remotely.
“The facilities at State College and the Parkway Call Center have been mostly unoccupied since the start of the pandemic, as employees mostly work remotely,” the employee notice said. “As such, it doesn’t make sense to keep paying for rented space that is largely unused and unoccupied.”
The notice went on to say that PHEAA could make the change due to technical improvements over the past two years, including the ability for workers at those sites to work remotely.
“Please be assured that we did not take this decision lightly, and we are working to minimize the impact on the employees who currently work at these sites,” the advisory said.
PHEAA has taken a series of measures in recent years to reduce its operating costs.
Earlier this year, it offered a retirement incentive that resulted in the removal of 37 people from its approximately 2,200 workforce. It is estimated that this will translate into an annual savings of $ 5.1 million.
In 2019, PHEAA announced the closure of its suburban Philadelphia loan service center, following the decision to close its Westport business center in Lower Allen Township, Cumberland County. In 2018 and 2019, it outsourced more than 300 call center and data center jobs.
The agency, along with its work as a federal loan manager, also administers the state grant program and other student financial aid programs and other related business lines.
Jan Murphy can be reached at [email protected]. Follow her on Twitter at @JanMurphy.
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