Penn State requires freshmen to live in the residence halls, so off-campus housing doesn't become an option until sophomore year. Even then, spending another year in residence halls isn't such a terrible idea. The conditions do get better, and you can enjoy the benefits of dorm life-not cooking or cleaning-for a little longer before you make it into the real world. For the first year, you're thrown together with a roommate not of your choice. By the second year, however, most students have formed their own circle of friends and can choose to live in neighboring dorm rooms to create the perfect dorm environment. If you do choose off-campus housing, you'll probably end up only slightly farther from classes than your dorm.
Many of the student-friendly apartments are in downtown State College, which is either a short walk or bus ride from campus. As you go farther out, the apartment sizes increase and rents decrease. It isn't uncommon for students to get townhouses around State College and commute to campus. This means you either have to bring your own car or become familiar with the bus schedule. The biggest advantage of living outside the dorms is the freedom it gives you. This can be a great learning experience. It is the first time many students have to deal with buying food, keeping up with bills, and maintaining their own place. While some would prefer to use their meal points in the dining commons rather than fight over whose turn it is to do the dishes, there is satisfaction in eating food you've cooked for yourself. Provided you're willing to take on the extra responsibility and alter your lifestyle a little, living off-campus can also be significantly cheaper than dorm life and meal plans.