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Undergraduate Loan FAQ

Am I eligible for a Keystone Undergraduate Student Loan?
To qualify, you must:
  • Be enrolled or plan to be enrolled in a degree, certificate, or diploma granting program at an eligible school
  • Be a DE, MD, NJ, NY, OH, VA, or WV resident attending an
    approved school

    Approved School

    Federally-approved educational institution under Title IV of the Higher Education Act of 1965
    in or out of state (with the exception of PA)
  • Be a citizen or a permanent resident of the United States
  • Be a borrower or co-signer who meets the minimum credit requirements
  • Be a student regardless of enrollment status, including if you are enrolled less than half-time
    • Less than half-time students may only borrow a maximum of $5,000 per loan
How much can I borrow?
  • Each year, you may borrow up to 100% certified cost of attendance (tuition, fees, room, board, books, transportation expenses, and miscellaneous expenses) minus any financial aid you are receiving (including other loans and work-study) as certified by your school's financial aid office.
  • Aggregate loan limits

    Aggregate Loan Limits

    Total amount of Keystone Student Loans borrowed and disbursed during a student's academic career.
    for a Keystone Student Loan ($150,000) apply.
    NOTE: Less than half-time students may only borrow a maximum of $5,000 per loan.
  • The minimum loan amount is $1,500.
Are there any fees or penalties?
No, there is no pre-payment penalty and no application, origination, or late fees.
Do I need a co-signer?
If you have not reached the
age of majority

Age of Majority

The age a person is considered an adult.
based on the law of your state of residence, you will be required to obtain a
co-signer

Co-signer

A co-signer is a person who accepts equal responsibility for the repayment of the loan.

. You may also be required to obtain a co-signer if you don't meet the minimum credit requirements.
NOTE: Approval for private education loans is based on your credit score, credit history, and debt-to-income ratio. Although you may not be required to obtain a co-signer, you may benefit from a
creditworthy

Creditworthy

Having a satisfactory credit rating
co-signer if you do not meet the minimum credit requirements. Having a co-signer may increase your chances that the loan will be approved and, perhaps, may get you a better interest rate.
What is co-signer release?
The Keystone Student Loan Program allows for co-signers to be released from their responsibilities after meeting certain requirements.
  • Forty-eight qualifying payments are required. The following requirements apply to determine the count of qualifying payments—it is a qualifying payment if it is:
    • Made by the borrower or co-signer
    • Made after the repayment period begins
      • This is after the repayment start date on AES's servicing system
    • Made within 15 days after the due date
    • No more than $5.00 below the required installment amount
  • The count of qualifying payments is frozen in the following situations:
    • During any period when a loan is on a reduced payment plan (for example, a repayment plan other than the standard principal and interest repayment plan)
    • During any period of deferment or forbearance, regardless of type
  • The count of qualify payments is reset if a payment is made more than 15 days after the due date
  • A
    lump sum

    Lump Sum

    An amount paid all at once, that is equal to two or more monthly installment payments.
    payment counts as one qualifying payment
Upon completion of making 48 consecutive on-time payments, the borrower must provide proof of income, and pass a debt-to-income calculation and credit check.
If you would like to apply for this benefit or have questions, please contact the servicer of the loan, American Education Services (AES) at 1-800-233-0557 Monday to Friday, 7:30 AM to 9:00 PM (ET).
NOTE: Both the borrower and any co-signer remain responsible for the student loan account until the co-signer release request is approved, if applicable.
Once the co-signer is released, they will no longer be held responsible for the repayment of loan. This responsibility will remain solely with the original borrower of the loan.
Does Keystone offer a grace period?
You are eligible for one 6-month grace period from the date of graduation or from the date you stop being enrolled at least half-time.
What is Keystone's Undergraduate Loan cancellation policy?
You can be granted full cancellation of the disbursement if the funds are returned within 120 days of disbursement.
What is the interest rate on the Keystone Undergraduate Loan?
We offer competitive, fixed interest rates, which means you never need to worry about your interest rate going up! Check out the rate range today.
What are Keystone's interest rate rewards?
Keystone has two great interest rate rewards, which could save you a total of 0.75% off your fixed interest rate:
  • Graduation benefit: Once we receive notification that you graduated, we will apply a 0.50% interest rate reduction to your account.
  • Direct Debit benefit: Once you apply and are approved for our free, automatic electronic payment service
    (Direct Debit

    Direct Debit

    Direct Debit is a free service that sets up an electronic deduction from your checking or savings account each month.
    ), we will apply a 0.25% interest rate reduction* to your account.
I recently graduated; when will I receive my 0.50% interest rate reduction?
Most schools automatically send enrollment information to your servicer, AES, within several weeks of graduation. Once received, your account will be updated to reflect the interest rate reduction. The rate reduction will be retroactively applied to the date of your graduation.
If it has been more than 3 months since your graduation and you haven't been notified your account automatically received the interest rate reduction, contact your school's registrar. A certified copy of your diploma or transcript showing you have graduated will need to be sent to AES by either you or your school.
What is Direct Debit?
Direct Debit is a free, automated payment service. It's not only convenient—you don't have to write a check or pay for a stamp—you will also qualify for a 0.25% interest rate reduction* when you are approved for Direct Debit.
What are my repayment plan options?
Immediate Repayment: If you want to get a head start on paying back your loan right away, this is the option to choose. With this option you will:
  • Be eligible for the lowest interest rate available
  • Pay your loan off earlier by making principal and interest payments while in school
  • Pay the least amount of interest over the life of the loan compared to the other repayment plan options
NOTE: Your first payment will be due within 30 to 60 days after the date of your final
disbursement

Disbursement

Disbursement is the transfer of loan funds from a lender to the school
. For less than half-time students, Immediate Repayment is the only repayment plan option.

Interest Only: If you want to avoid
interest capitalization

Interest Capitalization

Capitalization is the addition of unpaid interest to the principal balance of a loan. Capitalization of interest results in a higher principal balance and additional finance charges over the course of repayment and may cause your monthly amount to increase.
this is the repayment option for you! With this option you will:
  • Be responsible to pay the accrued interest during school
  • Enter repayment with the starting principal balance of the original amount you borrowed
NOTE: Interest payments will begin 30 to 60 days after the loan's first disbursement. Full payments, payments made toward principal and interest, will not begin until 30 to 60 days after the expiration of your
grace period

Grade Period

A grace period is a 6-month period before the first payment on a loan is due. The grace period begins the day after you graduate, leave school, or drop below half-time status and ends the day before repayment begins.
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Partial Interest Payment: To get a head start on paying the interest that accrues on your loan; this is a great option for you! With this option you will:
  • Be required to pay a fixed $25.00 a month payment† that is applied toward your loan while you are in school
  • Have less interest capitalize when you enter repayment
NOTE: Payments will begin 30 to 60 days after the loan's first disbursement. Full payments, payments made toward principal and interest, will not begin until after the expiration of your grace period.

Full Deferral: If you don't want to worry about making payments until you leave school, this option is available to you! With this option you will not need to make payments while in school; however, you will end up paying the most amount of money over the life of the loan compared to the other repayment plan options.
NOTE: Payments will not be due until after you separate from school and any applicable grace period has expired.
What is the minimum monthly payment?
The minimum monthly payment for a Keystone Student Loan is $50.00 a month, unless you select the Interest Only or Partial Interest Payment repayment plans. You have the option to choose between three terms to make repayment fit your needs (less than half-time students are only eligible for a 5- and 10-year repayment term):
  • 5 years
  • 10 years
  • 15 years
NOTE: The longer your term, the more interest you could pay over the life of the loan.
Examples of rates and repayment terms
What do I need to apply?
Below are the items you should have ready when filling out your application:
  • Name, address, and telephone number
  • Date of birth and Social Security number
  • Email address
  • Name and location of school you are or plan on attending
  • Annual income
  • Grade level and anticipated graduation date
  • Academic period for which you would like to receive the loan
  • Co-signer's name and email address (if applicable)
  • Mobile phone to receive one-time passcode for electronic signature
How do I save money on simple interest loans?
There are three easy ways to save money on your loan:
  • Pay early: If you make your payment before your due date, more of the payment will be applied toward principal.
  • Pay more frequently: Making payments more frequently, such as making biweekly payments, can help lower your principal balance and interest amount paid. By making payments every 2 weeks you end up making an extra full payment a year.
  • Pay extra: Making a
    lump sum

    Lump Sum

    An amount paid all at once, that is equal to two or more monthly installment payments
    or paying more than your monthly payment can lower your principal faster, which means you accrue less interest.

* For the Full Deferral repayment plan, the 0.25% interest rate reduction will be effective after the first installment bill is generated.

† Select the symbol within this page to view our student loan lending disclosures.

NOTE: Subject to aggregate loan limits.

The Keystone Student Loan Program is a credit-based loan program. Applicants, including co-signers, are subject to credit qualifications, completion of an application and credit agreement, and verification of application information. PHEAA uses applicant FICO score to determine eligibility and interest rates. Higher credit scores may mean an applicant is offered a lower interest rate.

PHEAA reserves the right to discontinue all programs or benefits without prior notice.