PHEAA Reminds Recent College Graduates to Plan for Repayment of Student Loan Debt

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Spring graduates are approaching the end of their six-month grace period

Harrisburg, PA (October 25, 2011)—The Pennsylvania Higher Education Assistance Agency (PHEAA) is advising May/June college graduates that their federal student loan six-month grace period will end in November/December and repayment of this loan debt will begin. Graduates typically take advantage of the six-month grace period to find employment and get their finances in order before beginning repayment of their student loans.

"There are several loan repayment options for borrowers to choose from," said Representative William Adolph, PHEAA Board Chairman. "PHEAA customer service staff is available to discuss repayment plans directly with borrowers to help them determine which plan best matches their individual circumstances."

Student loan repayment plans offer various benefits such as Graduated Repayment with payments that are initially lower but increase later in the repayment schedule or the Income-Based Repayment plan with monthly payments based on loan debt, income and number of people in a household.

Borrowers who are having difficulty securing employment or who have recently lost their job should contact their loan servicer to determine if they are eligible for an economic hardship or unemployment deferment or forbearance which could temporarily suspend their monthly payments under certain circumstances, until their financial situation improves. Interest continues to accrue on all federal and private loans even if a deferment or forbearance suspends monthly payments. The only exceptions are on Subsidized Stafford Loans and Subsidized Consolidation Loans on which the federal government pays the interest during periods of deferment.

"Contacting your loan servicer to discuss your options should take place sooner rather than later," said Senator Wayne D. Fontana, PHEAA Board Vice Chairman. "Falling behind in student loan payments can have serious consequences and it is a priority to help borrowers avoid loan delinquency or default."

PHEAA conducts its student loan servicing activities as FedLoan Servicing and American Education Services (AES). The secure borrower portals at and provide additional information on available repayment plans, allows customers to submit secure online payments, and offers an Eligibility Quiz to help borrowers learn which deferment or forbearance options may best suit their current circumstances and provides the option of downloading the appropriate form. Borrowers should access the appropriate borrower portal depending on which entity is serving their federal student loans.

Borrowers are encouraged to take advantage of free, online resources like, which offers college graduates and soon-to-be graduates helpful information on financial planning and budgeting, managing student loan debt, and establishing good credit habits.

PHEAA offers additional tips to graduates during their repayment period:

  • Avoid credit card debt and their high interest rates.
  • Set a reasonable budget and stick to it.
  • Make payments on time.
  • Enroll in an automatic debit program. Most borrowers can save an additional .25% interest rate when loan payments are automatically debited from a savings or checking account.
  • Make payments online; borrowers are encouraged to manage their student loan on the secure borrower portal found on and

For the latest financial aid information and helpful tips, upcoming deadlines and free financial aid workshops join PHEAA on Facebook at