PHEAA (Good But not For Everyone)

This is a student aid organization that was created in 1963 by the Pennsylvania General Assembly. It has since evolved into one of the leading student aid organizations in the country.

Today it is a national provider of all student financial aid services, and they serve millions of students in thousands of schools through loan guaranty, financial services, outreach, and many other student aid programs.

Their mission is to create affordable access for higher education services for its students. The earnings they receive usually are used to support their public service mission and to pay for their operating costs.

They also administer the Pennsylvania state grants and any other state-funded aid programs that have been designed for students.

PHEAA continues to devote most of its energy, imagination, and resources towards developing new and innovative ways that can ease the financial burden of the higher education students, schools, families, and taxpayers.

They usually conduct their student loan servicing duties under the American Education Services and the FedLoan servicing.

Why was it created?

The main reason why PHEAA was created was to service a wide variety of private or alternative student loan products and the Federal Family Education Loan Program (FFELP) through lending to partners all over the nation.

AES is a national leader in the provision of quality customer service to millions of student loan borrowers, and they do this through their highly trained and experienced customer services reps. Log on to this website for more info.

FedLoan servicing was first established so they could support the US Department of Education n servicing the huge number of student loans that they issue to the deserving students.

They are dedicated to providing an easy and convenient way of managing student loans. Find out more on their website.

Their affiliate websites



FedLoan Servicing—

You Can Deal With It—


Good for: grace period

Their grace period is nine months, compared to other lenders who give only six months.

They also offer some of the best repayment options to its customers. For a private lender, this is quite a solid back up for people who are looking for a more extended repayment period, and for students who have tapped out their federal funding.

Their rates may be higher compared to their competitors, but it is the only company you shall find offering to refinance your loan for a 10 – 15-year repayment period.

In addition, they offer a 1% cash reward to all students with a 3.0 GPA. This is a welcome feature and an exciting incentive.

Their 1% incentive is available to any amount of student loan you take out, and this money you can use for whichever purpose you wish, not necessarily college fee-related.

Bad for: Cosigners

PHEAA hasn't specified the credit score they require for you to qualify for one of their loans, but they do determine that if you are going to have a cosigner, he should at least have a score of 733.

One of the limitations you will find with this company is that they never release the cosigners, but they offer a more extended forbearance period.

Now, other student loan companies will mostly release the cosigner after a certain period of on-time payments, but with PHEAA, if you decide to cosign a loan with a student, you shall not be released from the obligation until the loan is fully paid.

They talk about increasing the forbearance period instead, but the time they offer is only 12 months, which is a very short period compared to other lenders.

Types of loans

Undergraduate student loan

This loan is designed for undergrads, who need help with their college fees. It is designed with fixed interest rates, and you do not need to worry about the rate going up over the course of repaying, because it is constant throughout.

The interest rate you pay, however, is determined after you apply for the loan, and this will depend on your credit history and other factors such as;

  • Your credit score.
  • Your co-signer’s credit history.
  • The loan repayment terms.
  • The repayment plan.

The interest rate for this loan is between 5.01% – 7.43%.

Graduate loans

These loans will cover your college fees for Health professional school, such as medical or dental, law school, MBA programs, Ph.D. and Traditional graduate programs. They can offer you up to 100% financing on your needs.

These graduate loans are similar to undergraduate loans but have very few differences. While they continue to offer the in-school deferment, they will only give you a 9-month grace period after you graduate. This means that you must resume repayment nine months after you leave college. This is in comparison to the six months given for undergraduate loans.

You can also opt for the $25 monthly repayment while still in school, similar to what is offered for undergraduate loans.

Graduate loans don’t necessarily require a cosigner, but you must have an excellent credit score to qualify for one of their loans.

They have a 0.25% interest rate reduction if you decide to sign up for a direct debit, where you pay on the same day each month from your account directly. There is also a 1% reduction on your principal amount if you have attained a 3.0 GPA.

The loans come with a 15-year repayment plan.

Graduate loans interest rate is between 5.01% – 7.43%.

The interest rate payments usually start 30-60 days after the loan disbursement, and full payments should be made towards the interest and principal immediately after the expiry of your grace period, which they shall give you.

Partial payment can be made after interest has accrued on the loan, and this is an excellent option if you shall be required to pay the fixed $25 monthly payment while still in school. This ensures that less interest is capitalized when you start payments.

Full Deferral is possible if you don’t want to worry about making payments until you leave school; this option is available to you! With this option, you will:

Not have to make payments while in school; however, will end up paying the most amount of money over the life of the loan compared to the other repayment plan options

Payments and Terms

The minimum monthly payment for a PA Forward Student Loan is $50.00 a month unless you select the Interest only or Partial Interest Payment repayment plans.

You have the option to choose between two terms to make repayment fit your needs: 10 years and 15 years. The longer your term, the more interest you could pay over the life of the loan.

Repayment plans

The company gives its borrowers two choices. You can either defer all loan payments during your time in school, or you can make fixed monthly payments of $25 while you are in school. I would advise you to take the second option of repaying while in school, and the figure is quite manageable.

You will be surprised at how much you will have paid by the time you graduate.

The deferring option is quite standard with most lenders, while the monthly repayment is less standard and only available with some companies, but an excellent opportunity.

Both of these repayment plans are offered for all their loans, except the private consolidation loan.

Their flexible repayment terms can easily be customized before getting approval for your loan. They give you plenty of control to pick your repayment period and the rate that you want if you qualify.

You can customize your repayment according to your financial status. Students usually have the options of paying back the loans either at 5, 8, 10, or 15 years.

The best advice I can give you with student loans is always to choose a more extended repayment period because this ensures that you pay the least amount of installment per month, and seeing as you are still a student with a limited amount of income, you do not need a significant burden on your hands.

Later, when you leave college and have stable employment, you can always reduce the period and pay more in terms of the monthly installment.

Here are some more repayment tips

  • When you receive your loan, start repaying it immediately while still in school, because this will help in lessening your financial burden as early as possible.
  • Choose the repayment of $25 per month while still in school.
  • Make repayments of the interest-only while in school.

Servicing of loans

If you compare PHEAA student loans to federal loans, there is a big difference. Federal loans usually are serviced by a third party, while the PHEAA loans are serviced in-house by the company's staff themselves.

This is a one on one management of the loans and rarely do they pass you off to a third party to handle your loan request. It, therefore, eliminates the errors associated with federal loans as a result of third-party management.

Their on-hand loan officers will call you and talk to you about the loan you have applied, which makes it easy for you to negotiate for your loans.

Their underwriting

This is a technique that helps borrowers who have trouble getting loan approvals.

In addition to credit score evaluation, they go a step further and look at other issues such as the borrowers' education level, their financial aspects, and work history.

In addition to all this; PHEAA Student Loans;

Do not charge extra fees for early or late repayments of the loans.

You can repay the loans weekly, which enables you to save money on interest.

Have a mobile app for tracking and managing your repayment.

Give a 0.25% discount if you are enrolled in their autopay system.

Gives you the ability to switch from variable and fixed rates every six months.

Forbearance and Deferment of PHEAA Student Loans

They offer many industry-standard deferment options that you can explore. What distinguishes this company from others is their 9-month deferment period that is not very common. Most companies will give you only six months.

This is how PHEAA Student loans Compares with other lenders:

LenderInterest ratesLoan terms
PHEAA student loansFixed rate only:

5.01% – 7.43%.

5, 10 and 15 years
Discover Student LoansFixed: 5.49% – 12.99% APR
 4.12% – 11.87% APR
Loan term

15, 20 yrs12


Loan term

Fixed: 4.55%
Variable: 4.14%
5, 10, 15 yrs.
Citizens Bank  Fixed: 4.90%
Variable: 3.96%
5, 10, 15 yrs.
College Ave      Fixed: 4.72%

Variable: 3.96%


5, 8, 10, and 15 yrs8
EDvestinU         Fixed: 4.50%
Variable: 4.40%
7, 10, 12, 15, 20 yrs.'
INvestEd            Fixed: 4.63%Variable: 3.70%


5 – 15 yrs.'
MEFA  Fixed: 3.95%


10, 15 yrs.'
Sallie Mae         Fixed: 5.49% – 11.85%

Variable: 4.25% APR – 11.35%

5 – 15 yrs10


Well, from the table above, it is clear to see that PHEAA student loans have high interest rates compared to the other companies in the industry, although Discover loans have the highest. This is of course not good, but when you consider all of the other options that you get from PHEAA such as a more extended deferment period and a wide variety of loan products to suit your needs, you may be able to consider them.

Our thoughts on PHEAA Student Loans

PHEAA Student loans figures


Fixed APR

5.01% – 7.43%.

Not GoodThis is very high if you compare it with the other companies, and therefore it is not a good option for some students.
Loan amount:

$5,000 – $150,000

fairThis is just fair, but some companies such as Earnest will give you up to $500,000.
Loan repayment terms:

5-15 years

GoodThis is okay, although there are other companies that give up to 20 years.
Loan Percentage


Very goodThey will give 100% refinancing on the cost of your college attendance. This will include books, tuition fees, meals, housing, and all other college-related expenses.
Origination fees:


Very goodMost other lenders charge this, and therefore it is a big plus for College Ave loans.


PHEAA student loans are designed to help supplement the federal loan that you have already received. You can also use them if you have been denied federal funding.

They are a good option for private students as their terms are considerate and the interest rate is an industry-standard, which means that it is more or less what you are likely to find with the other private loan servicing companies.

It is, however, important to note that they deal with the most popular federal loan servicing companies such as myFedLoan and AES. It is always easier for you to get your loan management in one place, and so, if your federal loan is being serviced by the above 2 companies, getting an additional private loan with PHEAA is a fantastic idea.

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