PHEAA Encourages Recent College Grads to Prepare for Student Loan Repayment

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

Harrisburg, PA (November 21, 2017)—The Pennsylvania Higher Education Assistance Agency (PHEAA) is reminding federal student loan borrowers who graduated in May or June that the six month grace period on their loan is ending and that loan repayment will soon begin.

New graduates typically take advantage of their six month grace period to find employment and get their finances in order before beginning repayment of their student loans.

Available repayment plans offer various benefits to federal student loan borrowers, such as Graduated Repayment with payments that are initially lower but increase later, and Income-Driven Repayment with flexible monthly payments based on loan debt, income and the number of people in their household.

Borrowers who are having difficulty securing employment or who have recently lost their job, should promptly contact their servicer to determine if they could qualify for a reduced payment plan or if they are eligible for an economic hardship or unemployment deferment or forbearance, which could temporarily suspend payments until their situation improves.

Interest continues to accrue on federal student loans even if a deferment or forbearance suspends monthly payments. The exceptions are on Subsidized Direct Stafford Loans and Subsidized Consolidation Loans on which the federal government pays the interest during periods of deferment.

"PHEAA's public service mission centers on helping Pennsylvania college students achieve an affordable higher education through a variety of financial aid programs and services," said Representative Mike Peifer, PHEAA Board Chairman. "This mission continues after graduation by providing student loan borrowers with the tools and resources needed to ensure successful and worry-free repayment."

PHEAA offers these tips to assist graduates:

  • Enroll in an automatic debit program. Most borrowers can save an additional .25 percent interest rate when payments are automatically deducted 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
  • Make payments on time and never skip a payment. By missing payments, borrowers can ruin their credit score, which can impact their financial future for years.
  • Set a reasonable budget and stick to it.
  • Avoid credit card debt and high interest rates.

PHEAA conducts its student loan servicing activities as FedLoan Servicing and American Education Services (AES). Secure online access to and provides 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.

"Federal student loans are borrower friendly in that they have so many repayment benefits that most consumer loans don't have", said Senator Wayne D. Fontana, PHEAA Board Vice Chairman. "But borrowers need to understand their benefits and obligations so they can set up a workable repayment plan that they can successfully manage and afford."

Federal student loan borrowers should also determine if they are eligible for student loan forgiveness, such as through the Public Service Loan Forgiveness Program. This program is available to eligible borrowers who work full-time in public service jobs after 120 consecutive on-time, full, scheduled, monthly payments on a qualifying repayment plan.

Borrowers who are joining or have already joined the military are reminded to take advantage of options available for service members. For more information and eligibility requirements, visit

Borrowers are also encouraged to take advantage of free online planning resources, such as, 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.

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