Press Releases

Pennsylvania's KeystoneBEST^SM Student Loan Program Gets Even Better!!!
New repayment benefit will save borrowers millions of dollars

Harrisburg, PA (May 2, 2007) - American Education Services (AES) today announced a new benefit for Pennsylvania students, families, and schools participating in the KeystoneBEST Stafford Loan Program for the 2007-08 academic year. In collaboration with more than 400 lending partners, AES is now offering a .5 percent original principal credit to the loan after 24 consecutive, on-time payments have been made.

This new benefit is in addition to the many up-front and long-term savings benefits that KeystoneBEST borrowers already enjoy - many of which are provided to every borrower without the need to demonstrate additional eligibility qualifications, as is the case with many competing student loans.

As Pennsylvania's first zero-fee student loan, KeystoneBEST provides immediate up-front savings which, combined with graduation and repayment benefits, can save borrowers thousands of dollars over the life of the loan. AES has saved Pennsylvania borrowers nearly $600 million in up-front fees alone over the last 10 years.

KeystoneBEST benefits include:

No up-front fees.
- 1 percent guarantee fee, also known as the federal default fee, underwritten by AES.
- 1.5 percent origination fee underwritten by AES and participating lenders.
Borrowers receive a 1 percent principal reduction as a graduation credit.
Immediate .25 percent interest rate reduction for automatic debit payments.
2 percent interest rate reduction after 36 consecutive, on-time payments.
.5 percent reduction of the original principal after 24 consecutive, on-time payments.

"Since the inception of the program, Pennsylvania students have been able to afford college without paying any up-front fees on their federal student loans - a benefit that is not always available to students elsewhere," said Dick Willey, AES President and CEO. "We have continually improved the program, finding ways to offer more savings to our students. This newest benefit ensures that the trend we created toward the lowest-cost and most responsive student aid programs will continue in Pennsylvania with even greater savings for borrowers and families."

The new principal credit reduction benefit will become effective on applications with loan terms beginning on or after July 1, 2007. On that same date, Federal Stafford Loan limits on subsidized and unsubsidized loans for the 2007-08 academic year will increase for first-year and second-year undergraduate students. Loan limits for first-year undergraduates will increase from $2,625 to $3,500 and loan limits for second-year undergraduates will increase from $3,500 to $4,500.

AES is PHEAA's nonprofit business enterprise, through which PHEAA earns money to pay for its operations and funds hundreds of millions of dollars worth of student aid programs, such as grants, scholarships and low-cost student loans for millions of Pennsylvania families.

Additional information on free and low-cost student aid programs and services for Pennsylvania can be found at www.aesSuccess.org and PHEAA.org.