For college students, back to school time means making smart choices to avoid last-minute loan debt – James Steeley

Jim Steeley, PHEAA President & CEO – With back-to-school time quickly approaching, many college students and their families are still looking for ways to cover for the full cost of what can be one of the most expensive – and consequential – investments of their lives: higher education. 

PHEAA administers several gift aid programs for the Commonwealth, including the need-based PA State Grant Program, that offer grant funds to help students afford their education without incurring loan debt.  With a $5,750 maximum PA State Grant award for 2022-23, these programs can offer significant funding to eligible students. We encourage every college-bound student to explore and apply for these types of programs. 

Ideally, students would never need to borrow money to pay for college.  But with the cost of college at today’s levels, often grants, gift aid and family resources are not enough to cover the cost of higher education.  

PHEAA offers planning resources to help students avoid unnecessary or excessive loan debt, including This free website allows students to create up to four different scenarios to see how their career and college choices can affect how much they will need to pay for college and if they are at risk of overborrowing.  I encourage all students and families to use these tools to ensure they are making prudent choices surrounding the costs and benefits of their education choices.

When students must borrow money to pay for college, smart choices typically begin with low-cost federal loans, such as the Stafford loan program, which also come with valuable borrower benefits during repayment, such as available forbearance and deferment.  But with federal borrowing limits for first-year undergrad students currently capped at $5,500 a year, some students will need to find additional sources of funding, including private loans, to cover the full cost of their education.  Unfortunately, private loans typically have higher interest rates and fewer repayment benefits as compared to federal loans.  This is why PHEAA strongly encourages students to exhaust all eligibility for gift aid and federal loans FIRST, before considering any private loan.  

When a private loan is necessary, a smart choice for Pennsylvania residents is the Commonwealth’s PA Forward Student Loan Program, which is a state based loan program for residents of Pennsylvania as well as residents of neighboring states who attend school in Pennsylvania.  

PA Forward offers competitive fixed rates with better borrower benefits as compared to most other private loan programs, including no application or origination fees, flexible repayment, and biweekly payment options to pay off a loan sooner, which can save borrowers even more money in interest.  The program also offers an interest rate reduction of 0.50% upon graduation and 0.25% for participating in Direct Debit – PHEAA’s free, automatic payment service. 

As with all of PHEAA’s activities, money earned through the program will be used to help support the Agency’s public service mission for the Commonwealth. This includes the $1 billion that has been allocated to help fund student aid programs and services for Pennsylvania residents over the last 10 years without burdening Pennsylvania taxpayers. 

As the clock ticks down toward the first day of the 2022-23 school year, I encourage Pennsylvania’s college-bound students to plan carefully – especially when navigating last-minute funding challenges.  PHEAA has resources available that are only a click away to help them avoid loan debt while maximizing opportunities for grants and scholarships. Please visit, and for more information and assistance. 

James Steeley
PHEAA President & CEO