Because grant and scholarship funds are limited, 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 borrow educational loans.
The following steps represent 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. Select the loan links below for more information about each option.
Step 1:
Federal Direct Subsidized and Unsubsidized Loans
A federal loan program available to all students.
Step 2:
Federal Direct Parent (PLUS) Loans
When undergraduate students need funding beyond the Stafford or Perkins Loan, parents may need to consider the PLUS Loan.
Step 3:
Private Education Loans
Students who need additional funds after considering the feasibility of the loan options in Steps 1 and 2—or students who are ineligible for federal aid—may need to apply for an alternative loan.
