PHEAA Urges Recent College Graduates to Plan for Loan Repayment

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Planning for student loan repayment affects nearly 1.6 million 2014 graduates

Harrisburg, PA (May 13, 2014)—The Pennsylvania Higher Education Assistance Agency (PHEAA) is recommending that graduating college students begin making plans for life after graduation by securing employment, developing a manageable budget, and researching options available to them for repaying their student loan debt.

Traditionally, federal student loan borrowers have a 6-month grace period following graduation before their monthly loan payments begin - allowing them time to begin earning money and deciding on a loan repayment plan that meets their individual needs.

"Establishing a solid financial plan is one of the most important things new graduates can do as they enter the workforce," said Representative William Adolph, PHEAA Board Chairman. "Graduates should contact their student loan servicer and discuss the various repayment options available to them."

For borrowers who are unable to make their monthly payments, deferment and forbearance may be available. Deferments and forbearances are periods of time during which a student's lender may temporarily suspend or reduce regular loan payments. Deferring repayment details are provided on their Master Promissory Note (MPN). Borrowers should contact their loan servicer to discuss their options as soon as they determine their inability to make payments. Students who do not know who services their loans should visit to find contact information for their servicer.

"Defaulting on student loans can have serious consequences for borrowers and can make a bad situation worse," said Senator Wayne D. Fontana, PHEAA Board Vice Chairman. "Borrowers should run toward this problem, and not run from it, by working directly with their student loan servicer to identify a viable repayment plan for them."

Finding employment may be a little easier this year. According to a recent survey of 161 employers conducted by the National Association of Colleges & Employers, companies plan to increase their hiring by nearly nine percent this year. Some private employers offer loan forgiveness programs.

PHEAA recommends that new graduates who are in their 6-month grace period:

  • Keep track of the date that their first student loan payment is due to avoid late fees. The six-month grace period begins when a student graduates or their enrollment status drops below half-time (typically less than six credits).
  • Consider which repayment option best suits their situation by contacting their loan servicer. Some borrowers may qualify for federal loan forgiveness programs.
  • Limit credit card spending to avoid unmanageable debt levels.
  • Set a monthly budget and stick to it.
  • Maintain a favorable credit score by making payments on time.
  • Enroll in automatic debit program to make sure payments are made on time and avoid late fees.
  • Notify their lender and loan servicer of any changes to address or phone number.

Borrowers who have questions concerning their private loans should contact their financial aid administrator, lender or loan servicer.

PHEAA encourages graduates to visit, their free debt management website, for information on developing a budget and student loan repayment options, including loan forgiveness programs.

Students and families are encouraged to visit PHEAA on Facebook, at, where they can view videos offering advice and direction on a variety of topics related to higher education.