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Dinniman: Applications Available for New Low-Cost Student Loan Program
HARRISBURG (June 27, 2019) – State Senator Andy Dinniman announced that applications are now available for the new PA Forward Student Loan Program.
The PA Forward Student Loan Program provides low-cost, alternative student loans for undergraduate and graduate students, as well as loans for parent borrowers. There are no application or origination fees.
With first-year borrowing limited on federal loans as low as $5,500 and the annual average cost to attend college in Pennsylvania over $43,000, many students have trouble affording the full cost of attendance even after taking advantage of grants, scholarships, campus-based aid, and federal loans.
The PA Forward Student Loan Program is designed to complement other forms of student aid, such as the PA State Grant Program and low-cost federal loans. It is ideal for Pennsylvania students who need help paying for college after exhausting their eligibility for gift aid and other loans.
Additionally, the PA Forward Refinance Loan will be offered later this year for borrowers who are in repayment and want to combine their debt after graduation to outstanding student debts and achieve one convenient lower monthly payment.
“The average student loan debt for a Pennsylvania undergraduate student is $38,000,” said state Senator Andy Dinniman, minority chair of the Senate Education Committee. “This new, borrower-friendly program aims to help bridge the gap for many students and young people who have already exhausted grants, gifts, scholarships, and other funding sources.”
PHEAA is the lender and servicer of the loans, with tax-exempt financing provided by the Pennsylvania Department of Community and Economic Development. Leveraging the combined resources of the Commonwealth allows PHEAA to provide the program at low rates with better borrower benefits, such as flexible repayment options and terms, as compared to most commercial, private loans.
PA Forward participants can borrow up to the total cost of attendance with competitive, low-interest rates. Borrowers can get discounted interest rates by enrolling in an automatic direct debit repayment program (0.25 percent reduction) and simply by graduating (0.50 reduction). There is also a six-month grace period after graduation before the first payment is due to give borrowers time to find a job and get their finances in order. Borrowers who take full advantage of the program’s benefits could save thousands of dollars over the life of the loan.
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 education and their ability to repay any student loans after graduation.