Harrisburg – October 22, 2018 – Senator Vincent Hughes (D-Philadelphia/Montgomery) praised a new Pennsylvania Higher Education Assistance Authority (PHEAA) program a new student loan program for Pennsylvania students who need help paying for college after exhausting their eligibility for gift aid, such as the PA State Grant Program, and low-cost federal student loans.
The PA Forward State Grant Program is set to begin the 2019-2020 academic year and will provide low-cost, alternative student loans for undergraduate and graduate students, as well as loans for parent borrowers. Additionally, borrowers who are in repayment and want to combine their debt after graduation to achieve a lower monthly payment can benefit from a PA Forward Refinance Loan.
“We know funding is one of the greatest barriers to college access, so I am pleased we were able to work with PHEAA to offer these low-interest loans to help individuals and families struggling to make ends meet,” Sen. Hughes said. “I am certainly thankful for steps like this, but the reality is dire for so many people working to learn and secure better lives. We have to continue to promote programs like this.”
PA Forward student loan borrowers can borrow up to the total cost of attendance with competitively low interest rates. Additional benefits include no application or origination fees, immediate credit approvals, and flexible repayment options.
Borrowers can receive a .25 percent interest rate reduction for enrolling in an automatic direct debit program and an additional .50 percent interest rate reduction for achieving successful graduation. Borrowers also benefit from a 6-month grace period after graduation before the first payment is due. This allows borrowers time to get their finances in order, including time to find a job, before repayment begins. Borrowers who take full advantage of the program’s benefits could save thousands of dollars over the life of the loan.
“Students should avoid borrowing to pay for college whenever possible – but that’s not a reality for millions of students who have no other option,” said Senator Wayne Fontana, PHEAA Board Vice Chairman. “Now, Pennsylvania students who need that extra financial assistance finally have access to an alternative loan program that puts their needs first by keeping costs down and providing peace of mind during repayment.” Pennsylvania joins 20 other states, including New Jersey and Massachusetts, in offering a similar loan program as a public service to its residents. PHEAA has a 55-year history of helping students achieve an affordable higher education in the Commonwealth.
Senator Hughes said though he is pleased with the PA Forward State Grant Program, he plans to continue his push for free college moving forward. He is the primary sponsor of the Pennsylvania Promise Initiative, which aims to make college free for college students seeking higher education at community college, state-owned or state-related institutions. The PA Promise would also provide funding to adults seeking in-demand skills and industry-recognized credentials, as well as college credit, to increase apprenticeship programs and to supplement federal work study money.
PHEAA encourages students and their families to exhaust all eligibility for grants and scholarships before considering a student loan. When borrowing is necessary, students should first apply for low-cost federal student loans before turning to an alternative student loan, which often have higher interest rates.
To help students make informed choices about their higher education funding plan that can prevent unnecessary or excessive borrowing, PHEAA created MySmartBorrowing.org. This free resource helps users understand how different career, school, and financial decisions made during the college planning process can influence their total cost of an education and their ability to repay any student loans after graduation.