The high cost of tuition and a need to use high-interest private loans to make up for federal loans that fall short of covering the full cost of education have combined to create student debt loads of about $37,000 for the average Pennsylvania undergraduate.

The state’s new PA Forward program aims to alleviate the cost of borrowing for college, said Dan Wray, account executive for PA Forward.

The program will provide borrower-friendly, low-cost private loans.

The Pennsylvania Higher Edu­ca­tion Assistance Agency is the lender and loan servicer for the program, with a tax-exempt allocation provided by the Pennsyl­vania Department of Community and Economic Development.

The combined resources of the state allow the program to provide low-interest loans with better borrower benefits compared to most commercial private loan programs, Wray said.

Applications for the program have been open since April.

A Saint Francis University student in June was one of the first borrowers, Wray said.

The loans of the PA Forward program are not just for degree-seeking students, but also for students seeking other credentials and certifications at vocational-technical centers or beauty schools, Wray said.

Millions of Americans have used private loans to finance tuition and other educational finances, and the result has been billions of dollars of unpaid debt, according to the Consumer Financial Protection Bur­eau.

Those active in the private student loan market include banks, credit un­ions, state agencies, nonprofit organizations, marketers, servicers and schools.

Unlike federal student loans, private student loans may not include certain consumer protection features for borrowers facing hardship.

However, the PA Forward program was created as a low-cost loan program, Wray said. The maximum in­terest rate on the PA Forward loans is fixed at 7.9 percent.

“Pennsylvania has a wealth of colleges and a wealth of students. Any student using private loans is using them because federal loans do not cover the full cost. So there’s a gap in funding. This is to address that,” Wray said.

The first year borrowing limit on low-interest federal loans is as low as $5,500, and there is also currently a lifetime limit on federal loans capped at $31,000 for dependent students. That hardly covers the cost of college.

According to PHEAA, the cost of full-time attendance for the 2017-18 school year, including tuition and fees, on-campus room and board, books and supplies and other expenses in Pennsyl­vania was over $43,000.

Through the PA Forward program, students can borrow up to the total cost of attending college or another institution.

In addition, there are no application or origination fees and there are flexible repayment terms.

Borrowers can receive a 0.5 percent interest rate reduction with successful graduation and an additional 0.25 percent interest rate reduction for immediate repay through direct debit.

Mirror Staff Writer Russ O’Reilly is at 946-7435.