State Sen. Andy Dinniman (D-Chester County) recently encouraged prospective college students applying for financial aid this year to consider the new PA Forward Student Loan Program.
The program provides low-cost, alternative student loans for undergraduate and graduate students, as well as parent borrowers. It is designed to complement other forms of student aid such as the PA State Grant Program and federal loans and is ideal for students who have exhausted their eligibility for gift aid and low-cost federal student loans.
“This new program will help bridge the gap in funding for many students and young people who are facing the challenges of the rising costs of higher education,” Dinniman, minority chair of the Senate Education Committee, said. “Fortunately, we now have these low-interest loans available to those who have already exhausted grants, gifts, scholarships, and other funding sources.”
Program participants can borrow up to the total cost of attendance with competitively low interest rates. PA Forward offers immediate credit approvals and flexible repayment options and has no application or origination fees.
Borrowers can get a 0.25 percent interest rate reduction for enrolling in an automatic direct debit program and an additional 0.50 percent interest rate reduction for achieving successful graduation. There is also a six-month grace period after graduation before the first payment is due.
The Pennsylvania Higher Education Assistance Agency (PHEAA) is the lender and servicer of the loans, and tax-exempt financing is provided by the Pennsylvania Department of Community and Economic Development.
PHEAA encourages students to exhaust all eligibility for grants and scholarships before considering a student loan. The agency notes that, if borrowing is necessary, students should apply for low-cost federal student loans before applying for an alternative student loan. PHEAA offers information about higher education funding on MySmartBorrowing.org.