How to Refinance or Get Pennsylvania Student Loans

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

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At $435 per credit, Pennsylvania is the second most expensive state to attend college. And at $35,196 per student, the state’s graduates also have the highest average student loan balance in the country.

However, there are plenty of options for financing an education in the Keystone State, including taking out Pennsylvania student loans. Here’s what you need to know.

Pennsylvania student Loans: Federal options

Federal student loans for college or graduate school are available to all students, including those living in Pennsylvania. Start the process by filling out the Free Application for Federal Student Aid (FAFSA). Submitting the FAFSA makes you eligible for federal grants, work-study opportunities, and federal loans.

Once you access federal loans, you’re assigned a servicer. You could be matched with FedLoan Servicing, also known as the Pennsylvania Higher Education Assistance Agency, though that’s not guaranteed for Pennsylvania residents.

Federal Direct Loans

As an undergraduate borrower, you have access to Direct Subsidized and Direct Unsubsidized Loans.

The benefit of Direct Subsidized Loans is that the government pays the interest while you’re enrolled in school and during your grace period. That’s not the case with Direct Unsubsidized Loans.

Both loans, like all federal loans, come with fixed interest rates. Federal loan borrowers can also access income-driven repayment (IDR) plans. Qualified borrowers can decrease payments to as low as 10% of their discretionary income on IDR plans.

Additionally, federal loans provide repayment protections not typically offered by private lenders, such as student loan deferment and forbearance. Deferment allows you to pause payments for up to three years on your federal loans. Forbearance allows you to stop making payments for up to 12 months.

Undergraduate borrowers face a limit on the amount they can borrow via federal student loans. The limit depends on whether you’re a dependent or an independent student and how far along you are in college.

Graduate borrowers are eligible only for Direct Unsubsidized Loans, but they can borrow a higher amount — $20,500 per year, as of the 2017-2018 academic year.

Once you’re done with your undergraduate or graduate degree, you become eligible for a Direct Consolidation Loan. It allows you to package your outstanding loans into one new loan.

Consolidating your debt with the federal government won’t lower your interest rate the way that student loan refinancing could (more on that below). The interest rate of your Direct Consolidation Loan would be a weighted, rounded-up average of the rates on your previous loans.

Federal PLUS Loans

Federal PLUS Loans allow you to fill any gaps in paying for your school’s cost of attendance. For undergraduate borrowers, your mom or dad could take out a Parent PLUS Loan in their name.

The rates for PLUS Loans also are fixed, but they tend to be higher. Parent PLUS Loans include an interest rate of 7.00%, but Direct Unsubsidized Loans carry a rate of 4.45%.

The interest rate on Graduate PLUS Loans also is 7.00%. But unlike the $20,500 annual limit on Direct Unsubsidized Loans, PLUS Loans allow you to borrow up to the full cost of attendance of your program. That makes PLUS Loans helpful for future lawyers, medical professionals, and others who face high education costs.

All PLUS Loans require you to have better than adverse credit history. Otherwise, you could obtain an endorser, usually a relative or friend with good credit and a stable income, who acts as a cosigner on the loan and agrees to repay it if you don’t.

Pennsylvania student Loans: Private lenders

The conventional wisdom is to rely first on federal loans for college and graduate school. They come with stronger borrower protections and the ability to alter your repayment plan or pursue student loan forgiveness.

But there are times when it’s better to choose private loans over federal loans.

One example is when you have a creditworthy cosigner who can help you score a lower interest rate. Also, private lenders allow you to choose your servicer and pick a variable interest rate, which isn’t possible under federal loans.

Private student loans

Many top private lenders work with students going to school all across the country, not just in Pennsylvania.

If you don’t have an established credit history or a good credit score, or if you want lower interest rates, you likely will need a creditworthy cosigner on your private loan application in order to qualify. Your cosigner also agrees to help you repay the loan if you’re unable to do it yourself.

Student loan refinancing

Refinancing allows you to consolidate your education-related debt into one new loan at a lower interest rate. The stronger your credit score and debt-to-income ratio, the more likely you are to benefit from refinancing.

Pennsylvania is not among states with in-house refinancing programs, so take a look at some of the best banks to refinance your loans. They work with borrowers throughout the U.S.

Make sure you rate-shop various student loan refinancing companies before picking a private lender. And remember that having a cosigner on your application could yield better loan terms.

Whether you’re in or out of school, review all your options for Pennsylvania student loans. Also, take the time to explore other financing options. After all, Pennsylvania is among states with generous grant programs — and you don’t have to pay back the award.

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.