Public nonprofit, privately profitable

The Pennsylvania Higher Education Assistance Agency, a taxpayer-supported, government-monopoly student loan organization, will pay its top executive, Dick Willey, nearly a half million dollars in 2006, reports the Harrisburg Patriot-News.

As noted in the story, Mr. Willey’s story is a rags to riches one–from lobbyist and legislative operative to the highest paid public official in Pennsylvania.

But it is actually difficult to determine if Willey is overpaid or underpaid because of the agency’s unique position in the student loan business. As a taxpayer-supported, government-protected monopoly, PHEAA doesn’t operate with the same incentives and marketplace threats of its private-sector competitors.

Indeed, that is why PHEAA is lobbying Congress to slap a $300 million tax on students in the form of fees on its #1 competitor, Sallie Mae. Read about it in this pas Sunday’s Patriot-News.

“No other state agency, non-profit or government entity has operations similar to PHEAA,” said PHEAA spokesman Keith New. Exactly, Keith! Only in Pennsylvania can a public nonprofit be so privately profitable.