Penn announced preferred lender arrangements with five private loan lenders on Jan. 8, ahead of borrowing caps that will limit federal loans for graduate and undergraduate students.
The Private Educational Loan Program hosts five preferred lenders that offer financial resources to cover remaining educational expenses after financial aid is applied. The program was created in response to the One Big Beautiful Bill Act, which will take effect in July and set a $257,500 lifetime borrowing limit for new students borrowers.
Penn’s Senior Director of Financial Aid Elaine Varas told The Daily Pennsylvanian that the Act “really limits” the amount of funding that undergraduate and graduate students receive.
“That sort of drove us to a place where we said, ‘we’re going to have to help students,’” she told the DP. “We really wanted to go down the route of — yes, offering private lending — but offering private lending that offers unique benefits to Penn students.”
The preferred groups offer lending to part-time students, along with benefits that allow lending to students who do not “progress satisfactorily.”
According to Varas, students “will not be penalized or disadvantaged” if they choose to borrow from a different lender, but will receive benefits that are “unique to Penn students” through the preferred lenders.
Of the five preferred lenders — Citizens, College Ave, MPower, PHEAA, and SoFi — two groups offer additional benefits to Penn students. College Ave most recently joined the list of preferred lenders on Jan. 13.
Both College Ave and SoFi a nine-month grace period for non-undergraduate students. College Ave offers loans available for 12-month prior balances and one percent off the total repayment balance, while SOFI offers loans 18-months prior and offer 0.75% off the total repayment balance.
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Students can review the available private loan options on the program’s webpage, compare lenders, and explore the key benefits associated with each option.
Although all preferred lenders have entered into four-year contracts with the University, Varas emphasized that Penn’s Student Registration and Financial Services will “continuously be reviewing” the contracts.
The webpage also includes a historical lender list, which names private lenders that Penn students have used in the past.
Varas explained that the program will look different in practice for each student, with an emphasis on “individualized” financial plans. She added that preferred lenders would offer loans to parents and guardians who may financially support undergraduate students.
The undergraduate federal financial aid application must be submitted to SRFS by Jan. 15. Students can continue to apply for private loans after the financial aid deadline has passed, but SRFS encourages them to first “review and exhaust their eligibility for federal student aid” before taking out a private loan.
“There’s no reason, if an undergraduate student is eligible for a subsidized loan, why they wouldn’t take it,” Varas said.
She added that Penn has incorporated feedback from a financial aid student committee, and that her team is “here to help” navigate the situation through appointments, workshops, or individualized sessions.
It’s “not the student’s job to understand all this — it’s our job to understand all this,” Varas told the DP.
The financial aid team will host virtual and in-person sessions to inform undergraduate and graduate students about the program. By the end of January, the team will release a three-part set of recordings that discuss federal aid programs, private loan programs, and credit.
“My message to any student is to please reach out to us,” Varas said. “We want to be sure that students feel comfortable in the decisions that they’re making.”
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Senior reporter Anvi Sehgal leads coverage of the University's administration and can be reached at sehgal@thedp.com. At Penn, she studies philosophy, politics, and economics. Follow her on X @anvi_sehgal.
