The True Cost of Student Loans: Know Your Options
Dear Friend,
As August begins, hundreds of thousands of young people across Pennsylvania are preparing to head off to college. Fall brings not only a return to dorm rooms, roommates, and football games, but also a return to the high cost of a college education.
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The average cost of tuition and fees in Pennsylvania tops $12,079 for a public four-year school and $32,559 for a private university. In order to afford a higher education, more than 70 percent of college students in Pennsylvania take out student loans.
One of the biggest challenges facing students and college graduates is not the just the amount they borrow, but who their lender is. Although many students take out federal student loans, which offer important consumer protections, too many Pennsylvanians also turn to more expensive private student loans. What’s worse, is they do so without fully exhausting all of the federal student loan options available to them.
To address this growing problem, I introduced the Know Before You Owe Acttoday to ensure that families and students have access to vital information regarding their student loan options. The legislation requires schools to counsel students on the financial aid options available to them, and requires private lenders to adopt commonsense steps to protect student borrowers.
Access to affordable higher education is a top priority for Pennsylvania middle class families. Families and students alike know that higher education is one key to being able to succeed in a competitive 21st century job market – and they are willing to invest in their future by taking out student loans in order to afford college.
We need to ensure that students have full and complete information about the most affordable student loan options available, and fight back against those who may try to take unscrupulous advantage of families facing tough financial decisions.
Visit these websites for more information about financial assistance:
http://www.fafsa.ed.gov/ http://www.pheaa.org/ http://studentaid.ed.gov/
Federal student loans offer:
- Lower, fixed interest rates
- Vital consumer protections
- Manageable repayment options including deferment and forbearance in times of economic hardship and access to Public Service Loan Forgiveness programs
Private student loans have:
- Uncapped, variable interest rates, making estimates about future debt payments difficult
- Hefty origination fees
- Few consumer protections
- Few flexible repayment options
- Few options for payment modification or forbearance
If you want to learn more about my work to ensure access to affordable higher education for all students, visit my website at www.schwartz.house.gov or call my office at 215-335-3355 or 215-517-6572.