Loans

Grant and scholarship funds are often limited, so many students must rely on loans to cover at least some portion of college costs. Undergraduate students, parents of undergraduate students, and graduate students may borrow money for education. In fact, approximately 80% of Penn State's aid recipients have educational loans.

Below are three borrowing options beginning with the best value and proceeding to other, less favorable loan options based on interest rates, loan terms and conditions, and repayment options. These loan options may be used alone or in combination with each other.

Federal Direct Stafford Loan

Federal Direct Subsidized and Unsubsidized Loans are available through the William D. Ford Federal Direct Loan Program to help pay for educational expenses. The Penn State Office of Student Aid awards Subsidized or Unsubsidized Loans (or a combination of both), based on financial need as determined by the FAFSA.

Federal Direct Parent (PLUS) Loan

The Direct Parent PLUS loan is a federal loan available to the parents of dependent undergraduate students. The PLUS Loan offers flexible loan limits and a fixed interest rate for the academic year. Eligibility is determined by the applicants credit history.

Alternative Loans

Students who need additional funds after considering the feasibility of the loan options above—or students who are ineligible for federal aid—may need to apply for an alternative loan from a private lender.