Paypal and most other sites with logins utilize a secured connection of their own and, when properly configured, will encrypt all communication between your browser and their server on their own.
VPNs are protected tunnels connecting computers. If a computer in the VPN connects to a secured site, the security of the site will run IN ADDITION TO the protection of the tunnel.
If you are connecting to an unsecured site or an improperly secured site, the VPN administrators may be able to see the data passed between your computer and the target server.