Pennsylvania Treasurer Joe Torsella announced that the five-month PA budget package, signed into law by Governor Tom Wolf on May 29, provides relief for borrowers of private student loans that are owned by the Pennsylvania Higher Education Assistance Agency (PHEAA). Borrowers of PA Forward Student Loan Program, Keystone Extra loans, and MedBest loans will automatically receive relief. For the first time nationally, critical federal protections are extended to these private student loans by:
- Automatically pausing payments for borrowers in repayment status through September 30, 2020,
- Setting the loan interest rate to zero through September 30, 2020,
- Backdating interest rate relief to start March 13, 2020.
“Pennsylvania student loan borrowers and their families face some of the largest loan burdens in the nation. Moving forward, we must find ways to make college more affordable for ordinary Pennsylvanians, but it’s our immediate responsibility to help borrowers recover from the ongoing COVID crisis without having to navigate the disastrous consequences of student loan delinquency and default as well:, said Treasurer Torsella.
On May 8, Treasurer Torsella joined with State Representative Mike Peifer, PHEAA Chairman, and State Senator Wayne D. Fontana, PHEAA Vice Chairman, to ask Governor Wolf for his support to allocate up to $2.2 million from the $3.9 billion deposit received by the Commonwealth, as part of the federal COVID relief package, or CARES Act.
In addition to the $2.2 million providing private loan relief, PHEAA will also receive $5 million for the Act 101 program, $5 million for Institutional Assistance Grants, and $30 million for PA State Grants.
This initiative is perfectly aligned with the primary goal of the CARES Act – to provide relief for Pennsylvanians who, through no fault of their own, find themselves in financial peril as we begin to slowly recover from COVID-19.