Plan for College in Pennsylvania

Student Loan Advice

The Pennsylvania Higher Education Assistance Authority (PHEAA) offers PA students and parents a comprehensive package of college planning products and services, everything from planning tips to federal and state loans.

The mission of most state governments is to make access to higher education a priority, so it is no surprise that Pennsylvania puts forward its best foot with PHEAA.

The PHEAA website actually has a comprehensive guide to student aid on its website,  which  includes over 30 pages of guidance on planning and preparing for the financial challenges of college, as well as a helpful timeline!

PHEAA will definitely help you find out what student loan strategy is best.

As a last piece of advice, don’t forget to fill out your FAFSA, and make sure to do so well ahead of the deadline. The FAFSA is every student’s gateway to both federal financial aid and any state--based financial aid.

student loans in Penn

Federal Loan Program Packaged for Pennsylvania Students

Any fiscally responsible student loan strategy must put the federal loan programs first, mostly because they are simply the most affordable option.

The Stafford Loan, the primary loan in the Federal Family Financial Education Loan Program, has the lowest interest rates and most accommodating repayment plans of any other loan program in the country, and it far surpasses private loan options.

Other FFELP loan programs, such as Parent PLUS loans and Grad PLUS loans, also offer similar benefits, and they’re definitely the first place any student should look if they’ve already used their Stafford loan funding.

PHEAA offers the FFELP, but repackages it just for Pennsylvania students and calls it the Keystone Educational Loans:

  1. Keystone Stafford Loans are widely available and offered in need-based and non-need-based versions. The PHEAA Stafford offers the additional benefit of having the origination fee discounted. And like the generic Stafford, you get the 6-month grace period and may apply without any credit check.
  2. Keystone Parent PLUS gives parents the option to finance the remainder of their child’s college education once other federal loans are paid out. Parent PLUS loans include the option to “postpone” repayment if your child is still in school.
  3. Keystone Grad PLUSis designed for graduate students with outstanding education costs and Stafford Loans at their borrowing limit. This is a credit-based loan, so you may have to borrow with a co-signor. Payments can be deferred while you’re still in school.

When a Private Student Loan Makes Sense

Most experts agree, you should only consider private students loans if you’ve already explored all federal options. The government has a vested interest in increasing the country’s number of educated working professionals, and it does everything it can to make sure students are able to afford an education. As a result, you won’t find any better deals than federal loan options.

But if federal loans fall short, as they sometimes do, then you can shop for private student loans. A private loan only makes sense when you might otherwise be unable to attend college. A few tips for borrowing a private student loan:

  • Find a reputable and well-known lender
  • Know exactly what the final cost of the loan will be
  • Find the limit on the interest rate
  • Any hidden fees?
  • Finance only what you need to cover education costs, nothing else
  • Avoid loans with penalties for early repayment

For more information on Pennsylvania student loans and planning a successful college career, visit the PHEAA website.