A FSEOG is for undergraduates with exceptional financial need -- that is, students with the lowest Expected Family Contribution (EFC) -- and priority is given to students who receive Federal Pell Grants.
A Federal Pell Grant, unlike a loan, does not have to be repaid provided you complete 60% of the semester. Pell Grants are awarded only to undergraduate students who have not earned a bachelor's or professional degree. (A professional degree would include a degree in a field such as medicine, law, or dentistry). For many students, Pell Grants provide a foundation of financial aid to which other aid may be added.