This year, Pennsylvanians have another option to avoid sometimes-predatory private student loans.

The Pennsylvania Higher Education Assistance Agency, a state agency that handles student financial aid, started collecting applications for a state alternative to private loans in April.

This fall, they'll also launch a loan refinancing program for borrowers with high interest loans in their debt mix.

PHEAA was created by the state legislature in 1963. Today, it oversees state education grants and runs loan servicing nation-wide, pushing loan profits back into grant programs.

Last year, the agency got $100 million in tax exempt financing from the Pennsylvania Department of Community and Economic Development to create these new loan programs. Their purpose, according to spokesman Keith New, is to help borrowers avoid the at-times crippling rates and fees attached to private loans.

“People are going to borrow to fill their needs,” New said. “We don't want them taking out 12 percent loans to do it.”

New and Dan Wray, an account executive for the agency, are dropping in on universities and media organizations throughout the Commonwealth in an effort to spread word of their new loans.

These aren't for everyone, both men stressed. If students can get by without borrowing, that's ideal, and federal loans are generally preferable to the private market, their own loans included.

But these loans max out at 7.9 percent interest rates, don't carry fees and are set at fixed rates.

Wray said this program was largely born out of requests from colleges for such a program.

Alyssa Dobson, the director of financial aid and scholarships at Slippery Rock University, confirmed that her office was pleased with the new loans.

“When students are floundering or looking for a way to pay their bill, they'll apply for everything out there,” Dobson said.

Of about 9,000 students at SRU, about 1,500 to 1,700 have private loans each year, Dobson said.

She said she hopes the refinance option can ease another problem they've been seeing.

“Sometimes students take their federal loans and refinance into less favorable private loans,” Dobson said. “Hopefully this being available will help ease that problem.”

Since April, PHEAA has received about 6,000 applications for the loans.

To get in, one must either be a Pennsylvania resident or a resident of a neighboring state attending college in Pennsylvania. Residents can take the loans elsewhere.

Borrowers have to meet certain credit criteria to be approved.

Graduating college can discount interest rates by 0.5 percent, incentivizing finishing school.

“This really can make a dent in a student loan debt situation,” Wray said.

Interested students can learn more and apply at PHEAA.org/PA-Forward.

MySmartBorrowing.org is another PHEAA website which helps students weigh whether student loan debts are a logical choice given their career plans.