Grants, Scholarships, and Loans

Some of the most common types of aid you may receive fall into the categories of grants, scholarships, and loans. Whether a particular type of financial aid has to be repaid or not is an important factor to be aware of. Grants and scholarships don't require payment in most circumstances. Loans, on the other hand, do require repayment. 

The Expected Family Contribution (EFC) number that's calculated with your FAFSA will help Penn State determine your level of need and how much Federal Pell Grant Links to an external site. money you may be eligible to receive. Some students qualify for this grant only when taking full-time classes, while others with a lower EFC number may qualify even when taking a few credits. Some students may not qualify for grants at all. There are also annual and lifetime limits associated with the grants.

There are two kinds of loans that can be made directly to you by the Federal government: subsidized and unsubsidized. In a nutshell, the government pays the interest that accrues on a subsidized loan while you're enrolled at least half-time in school, but unsubsidized loans accrue interest while you're in school. After you leave school, that interest will be added to the amount that you borrowed and must be paid back. The FAFSA calculation determines how much is "sub" (subsidized) versus "unsub" (unsubsidized) for the loans. Most students can expect to have some loan eligibility, unless you're incarcerated, below half-time enrollment status, or in default on a previous federal loan. You're under no obligation to use the loans that are part of your aid award. Most schools have a process for either accepting or declining loan funds. Keep in mind that there are annual and lifetime limits to what students can borrow as well, which are listed on the web page Maximum Loan Amounts for Subsidized and Unsubsidized Loans Links to an external site.. You can check your prior borrowing history in the National Student Loan Data System.

If you choose the direct loans as one of your aid resources, there will be additional steps that you'll need to resolve by completing Entrance Loan Counseling and signing the Master Promissory Note. This is where the FSA ID you registered for will be used again.