PHEAA Student Loan Review 2020: Reach your Education Goals

Founded in 1963, the Pennsylvania Higher Education Assistance Agency (PHEAA) is a student aid organization, providing loans to help people achieve their academic ambitions. Residents of Pennsylvania, or students from Maryland, New Jersey, Delaware, New York, Virginia, and Ohio coming to study in eligible Pennsylvania schools may apply.

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Table of Contents

    Why Get a Student Loan from PHEAA?

    There are a few reasons that could lead someone to apply for a loan with this provider. It offers high loan amounts with several repayment options and relatively low APRs in many cases. There’s also a parent option loan for those seeking to help their child pay for school.

    What Student Loans does PHEAA offer?

    There are three main options:

    Undergraduate Loans

    Loan amounts

    $1,500 to $150,000

    APRs

    4.03% to 6.56%

    Origination fee

    $0

    Terms

    10 or 15 years

    • For students who aren’t classed as adults in their state of residence, a co-signer may be required. This may also be necessary for those without a high enough credit score.

    Graduate Loans

    Loan amounts

    $1,500 to $300,000

    APRs

    4.03% – 6.56% APR

    Origination fee

    $0

    Terms

    10 or 15 years

    • The same co-signer rules apply as for undergraduates
    • Upon graduation, interest rates will be reduced by 0.50% as a reward

    Parent Loans

    Loan amounts

    $1,500 to $150,000

    APRs

    4.21% – 6.40%

    Origination fee

    $0

    Terms

    10 or 15 years

    • No co-signer option, so parents/legal guardians must meet the credit score requirement (unspecified)

    Student Loan Refinancing with PHEAA

    Loan amounts

    $5,000 to $300,000

    APRs

    3.72% – 7.11% APR

    Origination fee

    $0

    Terms

    5 to 20 years

    • The same co-signer rules apply as for undergraduates
    • For those returning to school on at least a half time basis, a 36-month deferral may be approved
    • Student loans can’t be refinanced with a parent loan
    • Loans with a partner/spouse can’t be refinanced together

    Repayment Options

    Refinance loan repayment must start immediately, on a bi-weekly or monthly basis. For the other loans, there are four options.

    • Full Deferral
    1. Pay nothing during the school period.
    2. Payments begin following enrolment completion after any applicable grace period has ended
    3. This is by far the most expensive option in the long run
    • Partial Interest Repayment
    1. Pay $25 each month of enrolment to get a ‘head start’ on interest build-up
    2. Full payments begin within 60 days of enrolment completion
    3. This is cheaper overall than the Interest Only option
    • Interest-Only Repayment
    1. Accrued interest during enrolment may be paid at any time in the school period
    2. Full payments begin within 60 days of enrolment completion
    • Immediate Repayment
    1. Access the best interest rates
    2. Become debt-free sooner
    3. Pay the least interest overall
    4. Begin payments within 60 days 

    Who is Eligible?

    • Attend an eligible school (contact PHEAA directly)
    • Be a Pennsylvania resident or a student from one of the approved states previously mentioned
    • Be a US citizen or permanent resident
    • Be an applicant/co-signer with an appropriate credit rating

    Pros and Cons

    Pros

    • No prepayment fees
    • High maximum loan amount

    Cons

    • Extremely limited eligibility

    Conclusion

    PHEAA might have something to offer to a limited number of students, but most won’t be eligible to apply for its loans. Check out EDvestinU for more inclusive loans, with 24-month deferral options, or to refinance even before degree completion. Or, consider MEFA instead, with fixed-rate APRs starting from an incredibly low 3.75%.