Plan Ahead: Why PA Forward Student Loans and Smart Borrowing Tools Are Your Best Bet

Earning a college degree is one of the smartest investments a student can make. According to the U.S. Bureau of Labor Statistics, individuals with a bachelor’s degree earn a staggering 68% more than peers with only a high school diploma. In Pennsylvania, college attendance is on the rise post-COVID, with first-time student enrollment jumping 3.4% in 2023. For students and families, higher education isn’t just about opportunity—it’s a clear path to financial security and long-term success. Yet, with the soaring cost of college, how to pay for college remains the elephant in the room, demanding smart solutions and careful planning.

Nationally, tuition and fees at public four-year colleges have increased by nearly 37%, while private institutions have seen a 45% rise. In Pennsylvania, tuition for public four-year institutions has increased by 19% for undergraduates during the same period.

At The First, we recognize that weighing the costs and benefits of a college degree can be challenging. Fortunately, smart borrowing tools like PA Forward Student Loans can help families navigate this process.

In this article, we’ll explore this program as well as other essential resources available to bridge the financial gap and unlock the opportunities of higher education. For additional insights on how to financially prepare for college, check out our article on financial preparation for college in Bucks County.

Understanding Your Student Loan Options

According to the Education Data Initiative, 61% of students who completed a bachelor’s degree have received student loans. The PA Forward Private Student Loan Program is just one type of loan available.  Let’s take a moment to review the different options.

• Federal Student Loans: Offer fixed interest rates and eligibility for forgiveness programs but come with borrowing limits that may not fully cover college expenses.
  • Private Student Loans: Provide flexible borrowing amounts but often have higher interest rates and fewer borrower protections.
  • PA Forward Student Loans: A unique middle-ground option tailored for Pennsylvania families, offering competitive rates, flexibility, and state-specific benefits.

When considering student loan options and how to pay for college, it is important to compare all available choices, taking time to understand the immediate and long-term benefits and impacts of your decision.  The First’s Student Loan page offers detailed guidance on these options and is a great starting point for a deeper dive into the topic.

What Makes PA Forward Student Loans Stand Out?

The PA Forward Private Student Loan Program offers a smart and flexible solution for students and families navigating the rising cost of college. With competitive interest rates, no application or origination fees, and repayment options designed to fit your budget, it’s no wonder they’ve become a go-to option for Pennsylvania residents and students attending eligible schools.

Administered by the Pennsylvania Higher Education Assistance Agency (PHEAA), these private loans are available for undergraduates, graduate students, and even parents. They cover up to 100% of the certified cost of attendance—including tuition, fees, room and board, and books—making it easier to focus on your education, not your expenses.

Additionally, PA Forward loans offer benefits such as no prepayment penalties and potential interest rate reductions through various incentives.

PA Forward vs. Other Loan Options

When it comes to financing your education, it’s essential to understand the pros and cons of different loan options. Federal student loans, private loans, and PA Forward Student Loans each offer unique benefits and drawbacks, making them suited for different needs. Here’s a closer look at how these options compare to help you make the best choice for your financial future.

Federal Student Loans

Pros:

1. Income-Driven Repayment (IDR): Borrowers can adjust payments based on their income and family size, which can make repayment more manageable.
2. Fixed Interest Rates: Rates are set by the federal government and typically lower than private loan options for undergraduate borrowers.
3. Forgiveness Programs: Options like Public Service Loan Forgiveness (PSLF) provide opportunities for loan forgiveness after a specific period of qualifying payments.
4. Deferment and Forbearance: Borrowers may temporarily pause payments during periods of financial hardship.
5. No Credit Check for Most Loans: Federal loans, like Direct Subsidized and Unsubsidized Loans, don’t require a credit check, making them accessible to most students.

Cons:

1. Borrowing Caps: Limits on how much you can borrow may not cover the full cost of attendance, especially for undergraduates.
2. Interest Accrual: While subsidized loans don’t accrue interest while in school, unsubsidized loans and PLUS loans do.
3. Limited Availability: Federal loans are only available to U.S. citizens or eligible non-citizens, which may exclude some students.

Private Student Loans

Pros:

1. Higher Borrowing Limits: Private loans often allow students to borrow up to the full cost of attendance, including expenses like books, housing, and more.
2. Customizable Terms: Borrowers can often choose between fixed and variable interest rates, as well as different repayment term lengths.
3. Co-Signer Opportunities: Having a creditworthy co-signer can improve approval chances and lower interest rates.

Cons:

1. Higher Interest Rates: Rates tend to be higher than federal loans, especially for borrowers without excellent credit or a co-signer.
2. Fewer Protections: Private loans typically don’t offer income-driven repayment plans, forgiveness options, or deferment periods like federal loans.
3. Credit-Based Approval: Approval and interest rates depend on the borrower’s (or co-signer’s) creditworthiness, making them less accessible to some students.

PA Forward Student Loans

Pros:

1. Competitive Rates: PA Forward offers interest rates comparable to federal loans, making them an affordable option for many borrowers.
2. No Fees: Borrowers don’t have to worry about application, origination, or prepayment fees, which can save money over time.
3. Flexible Repayment Options: Multiple repayment plans allow borrowers to tailor their payments to their financial situation.
4. Pennsylvania Focus: Designed specifically for Pennsylvania residents and students attending eligible schools, with local customer service and tailored support.
5. Covers 100% of Costs: Borrowers can fund up to the certified cost of attendance, including tuition, fees, room and board, and more.
6. Rate Reduction Opportunities: Borrowers may qualify for interest rate discounts for graduating or enrolling in auto-pay.

Cons:

• State-Specific Eligibility: Only Pennsylvania residents or students attending schools in Pennsylvania (or neighboring states) are eligible, which limits access for non-residents.
• No Federal Protections: Unlike federal loans, PA Forward doesn’t offer forgiveness programs or income-driven repayment plans.
• Credit-Based Approval: Like private loans, approval and rates depend on the borrower’s (or co-signer’s) creditworthiness.

Smart Borrowing Strategies

PA Forward Student loans are just one piece of the puzzle when it comes to paying for college, and for many, the journey to this point starts long before the SATs and campus visits commence. Like so many things in life, investing time in financial planning can reap significant benefits.

Planning should include budgeting for tuition, fees, and living expenses; information is often widely available on individual school websites or in other databases across the internet. Use these numbers as a guide and understand that like most things in life, expenses tend to go up year-over-year.

Reducing reliance on loans by applying for scholarships and grants should be a top priority for every student and family. In Pennsylvania, the numbers show just how impactful financial aid can be—approximately 86% of students at the Pennsylvania College of Technology receive some form of aid, with 34% benefiting from Pell Grants. Similarly, nearly half of undergraduates at the University of Pennsylvania receive direct grant support. Most colleges are eager to share how much financial aid their students receive, including the percentage awarded scholarships and grants. Check out the financial aid section on your preferred school’s website to see what’s available—it’s a small step that can make a big difference in keeping college costs manageable.

Plan For Success With Help From The First

PA Forward Student Loans are a smart, flexible option for Pennsylvania families looking to finance a college education. With competitive rates, no fees, and repayment plans that fit your needs, they’re designed to make higher education more accessible. But smart borrowing doesn’t stop there—applying for scholarships, exploring grants, and using tools like EducationPlanner.org and MySmartBorrowing.org can help you borrow only what you need and plan for the future.

At The First, we’re committed to guiding you through the student loan process and helping you make informed decisions. Visit our Student Loan page to learn more about the PA Forward Private Student Loan Program and how we can help you take the next step toward achieving your educational goals.