Treasurer Torsella Announces Most Favorable Private Student Relief Package in the Country

Bipartisan deal automatically pauses payments and moves interest rates to zero

Harrisburg, PA - Pennsylvania Treasurer Joe Torsella announced that the five-month PA budget package, signed into law by Governor Tom Wolf on May 29, provides relief for borrowers of private student loans that are owned by the Pennsylvania Higher Education Assistance Agency (PHEAA). Borrowers of PA Forward Student Loan Program, Keystone Extra loans, and MedBest loans will automatically receive relief. For the first time nationally, critical federal protections are extended to these private student loans by:

  • Automatically pausing payments for borrowers in repayment status through September 30, 2020,
  • Setting the loan interest rate to zero through September 30, 2020,
  • Backdating interest rate relief to start March 13, 2020.

"Pennsylvania student loan borrowers and their families face some of the largest loan burdens in the nation. Moving forward, we must find ways to make college more affordable for ordinary Pennsylvanians, but it’s our immediate responsibility to help borrowers recover from the ongoing COVID crisis without having to navigate the disastrous consequences of student loan delinquency and default as well.”

Pennsylvania State Treasurer, Joe Torsella

On May 8, Treasurer Torsella joined with State Representative Mike Peifer, PHEAA Chairman, and State Senator Wayne D. Fontana, PHEAA Vice Chairman, to ask Governor Wolf for his support to allocate up to $2.2 million from the $3.9 billion deposit received by the Commonwealth, as part of the federal COVID relief package, or CARES Act.

“This state funding will provide needed relief to Pennsylvania students and their families with private student loans as all of us continue to fight COVID-19 and work to move our economy forward. Access to education and the challenges of high student loan debt across the country must remain a priority even during a pandemic. I thank the legislature and Treasurer Torsella for their partnership and bipartisan spirit of cooperation that made this relief available.”

Pennsylvania Governor, Tom Wolf

In addition to the $2.2 million providing private loan relief, PHEAA will also receive $5 million for the Act 101 program, $5 million for Institutional Assistance Grants, and $30 million for PA State Grants.

“The additional $30 million to the PA State Grant program will allow the maximum grant award to increase to the second highest award amount in the history of the program. This pandemic has fundamentally changed how postsecondary schools operate and continues to create uncertainty for many. This will provide students with a stable source of student aid funding as they decide how to participate in higher education going into the upcoming year.”

Senator Wayne D. Fontana, PHEAA Board Vice Chairman

This initiative is perfectly aligned with the primary goal of the CARES Act – to provide relief for Pennsylvanians who, through no fault of their own, find themselves in financial peril as we begin to slowly recover from COVID-19.

“As an advocate for the long-term fiscal strength of Pennsylvania, I want to thank Governor Wolf, Rep. Peifer, and Sen. Fontana for their leadership on this important issue. Student loan debt is linked with lower homeownership rates, reduced retirement savings, and depressed business startup activity, all of which undermine the vitality of our Commonwealth. With this genuine bipartisan accomplishment, I am confident more progress is yet to come.”

Pennsylvania State Treasurer, Joe Torsella

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