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:

University Loan
Loan program awarded to undergraduate students who demonstrate high financial need.

Federal Direct Stafford Loan
A federal loan program available to all students.

Step 2:

Federal Direct Parent (PLUS) Loan
When undergraduate students need funding beyond the Stafford or Perkins Loan, parents may need to consider the PLUS Loan.

Step 3:

Alternative 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.

Compare Parent PLUS and Student Alternative Loans