PHEAA fulfills its mission to help Pennsylvania students
The COVID-19 pandemic and its devastating impact on our economy has forced students and families in Pennsylvania to reconsider their plans to earn a college degree.
As chairman of the board of the Pennsylvania Higher Education Assistance Agency, or PHEAA, I can assure readers that recent studies regarding college affordability continue to come to the same conclusion. : A degree is well worth the investment, and more here in Pennsylvania than in most states.
On average, Pennsylvanians with a bachelor’s degree earn 51.7% more than those with an associate degree ($ 89,278 vs. $ 58,847); and 78% more than those with a high school diploma, according to a May 2020 report released by the Thomas Fordham Institute.
Recent research from the PHEAA also highlights how the PA state grant program plays a crucial role in reducing student debt, with Pell-eligible recipients borrowing nearly $ 9,000 less, on average, over four years.
This is especially important in Pennsylvania, as 65% of college graduates have student loan debt, with an average debt load of over $ 39,000, the second highest in the country.
Other research shows that the difference in earnings between Pennsylvania college graduates and those with only a high school diploma was even larger than the national average.
Business and technical schools also offer lifelong benefits over those who do not pursue further education beyond high school, especially when preparing for a high-demand career with plenty of employment opportunities. .
Business and technical schools may offer advantages over a traditional four-year college or university. For example, trade schools cost an average of 25% of a typical four-year program of study and can be completed in half the time.
PHEAA is helping Pennsylvania families deal with this debt. We recently announced that the agency will be able to increase the maximum grant to a record $ 5,000 for this school year. The program provides free aid to students from low and lower middle income families.
The legislature and Governor Tom Wolf deserve kudos for earmarking $ 311 million for the PA state grant program in this year’s budget. PHEAA complements that amount with $ 15 million from its business income, which is generated through its work as a student loan manager, federal guarantor, and software as a service provider.
As a result, we return millions of dollars to Pennsylvania students and taxpayers every year. Over the past four years, PHEAA has allocated nearly $ 250 million in revenue to the fund to provide scholarships to Pennsylvania students in greatest financial need.
Over the past decade, PHEAA has disbursed more than $ 1 billion to supplement the PA state grant and other student aid programs, while covering all administrative costs of the program. This makes it one of the most effective programs of its kind in the country, as every dollar allocated goes directly to supporting Pennsylvania students in financial need.
As private student loans are increasingly needed to help students meet the full cost of a college education, they tend to have higher interest rates and fewer benefits for borrowers. That’s why PHEAA, in cooperation with the Pennsylvania Department of Community and Economic Development, launched PA Forward, a more affordable and accessible private student loan option that is easier to repay.
Students can borrow up to the full cost of tuition with no fees to pay. PA Forward also offers interest rate reductions for graduation and for enrolling in a direct debit program during repayment.
Making decisions about how to attend and pay for college education can seem overwhelming, and it was true before the pandemic wreaked havoc on so many Pennsylvanians.
The PHEAA has developed online tools to help students and families understand options and make decisions that make sense for their situation. Ultimately, as the data shows, the return on this investment of time and energy can pay off for years and years to come. Visit www.PHEAA.org to access these resources and learn more about our efforts to help students graduate from college.
State Representative Michael Peifer, a Republican, represents parts of Pike and Wayne counties.