Plan for College in Pennsylvania

Make Good Student Loan Choices

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 and so it is no surprise that Pennsylvania puts forward its best foot with PHEAA. If you’re a college-bound student or parent find out what student loan strategy is best.

Best Student Loan Strategy for PA Students

Because PHEAA is the leading higher education authority in the state, any student loan strategy through the agency is a good bet. Generally you’ll find three distinct types of student loans advertised for college students:

  • Federal student loans, include the Federal Family Education Loan Program and the Direct Loan Program
  • Alternative loans often made available through state governments
  • Private loans from commercial lenders.

Federal Loan Program Packaged for Pennsylvania Students

Any fiscally responsible student loan strategy must put the federal loan programs first. PHEAA offers the FFELP, but repackages it just for Pennsylvania students, called the Keystone Educational Loans:

  • Keystone Stafford Loans are widely available and designed in need-based and non-need-based versions. With the PHEAA Stafford you get the origination fee discounted. Like the generic Stafford you get the 6-month grace period and may apply without any credit check.
  • Keystone Parent PLUS gives parents the option to finance the remainder of their child’s college education once other federal loans are paid out. you do have the option to “postpone” repayment if your child is still in school.
  • Keystone Grad PLUS is designed for graduate students with outstanding education costs and Stafford Loans at their borrowing limit. This is a credit-based loan, so borrow with a co-signor if you must. Option to defer payments while you’re in school is available.

When a Private Student Loan Makes Sense

First step: apply for federal loans. If those fall short, as many do, then you can shop for private student loans. A private loan 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.