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As another school year begins, I am always encouraged to see so many students from around the nation pouring into our city. Higher education is an important industry for our region.

Those four-year colleges and universities, the Community College of Philadelphia and trade schools employ tens of thousands of people and breathe life into so many of our communities.

For these students, it is clear that the investment of time, energy and money is worth every penny. Whether one chooses community college, trade school, or a four-year degree or graduate school — continuing education is the key to a better future.

Fortunately, the Pennsylvania Higher Education Assistance Agency, with cooperation from Department of Community & Economic Development, have launched the PA Forward Student Loan Program to help families gain access to this next rung in the ladder.

Studies and data demonstrate the need for PA Forward. Under the program, students can borrow up to the total cost of attendance with competitively low interest rates, no application or origination fees, immediate credit decisions and flexible repayment options. In addition, lower rates will be offered for completing a degree and graduating or setting up a monthly electronic deduction.

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The benefits of higher education are clear. According to a 2012 Lumina Foundation study, Americans with associate degrees earn 51 percent more each year than high school graduates with no college, and bachelor’s degree holders earn 134 percent more annually. The benefits don’t stop on graduation day. Those who attain degrees are more likely to be employed, have health insurance, vote, are less likely to be incarcerated — they even live longer.

Currently, 46.4 percent of Pennsylvanians have obtained a high-quality certificate, associate degree or higher. Here in Pennsylvania we have made significant progress increasing this number by 8.5 percent since 2008. But it’s not quite enough — it is estimated that we need 60 percent of our adult population to obtain high-quality post-secondary certificates or degrees by 2025 in order to meet workforce needs.

However, low-income, first-generation students face severe, increasing barriers in attaining their degree of choice in this country.

The annual Indicators of Higher Education Equity in the United States trend report examines a variety of circumstances that impede those seeking higher education.

First, because state and federal funding for institutions of higher education has dropped dramatically in the last several decades, the cost of a degree has shifted to students and their families. At the same time, Federal Pell grants cover less of the cost of attending college than ever before — in 2017, the Pell Grant covered about 25 percent of college costs, down from 67 percent in 1976. Borrowing has increased among all demographics and the report found that recipients of bachelor’s degree who are black have the highest borrowing rates (85 percent) and the highest average amount borrowed ($34,000).

The math shows that for many people, student loans are a stepping-stone to better career opportunities, but too many borrowers are being burdened with excessive and unnecessary debt. The new PA Forward Student Loan Program has come along at a critical time and can save Pennsylvania families thousands while making student loan debt easier to manage.

With PA Forward, PHEAA makes borrower-friendly private student loans to Pennsylvania students, at competitive rates and with superior repayment benefits. 

The PA Forward Student Loan Program will make borrowing more affordable in Pennsylvania.  But students must also understand that the key to borrowing wisely is to do so only when it’s absolutely necessary — and low-cost federal student loans should be their first option after all gift aid is exhausted. 

By carefully considering the costs and options for financing college or trade school and the many long-term positive returns, student loans are sometimes the only way forward. We hope that many Pennsylvanians can take advantage of the PA Forward Loan program as a partner in obtaining their higher education.

— State Sen. Vincent Hughes is the member of the PHEAA Board of Directors. For more information on PHEAA’s PA Forward Student Loans Program, please visit PHEAA.org/PA-Forward.

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