Tip! As part of seeking student loans, you need to produce a thorough conj at the time thatsessment of what expenses you will be incur over the course of the coming semester.

Stafford loans are part of the FFELP (Federal Family culture Loan Program) established by Congress in 1965 to supply financial aid to students. Origineveryy intended to cover those ‘in need’ where the quotes indicate that the statement of meaning de was somewhat loose even then, it rapidly expanded. Tocycle, Stafford loans purvey over 90% of the more than $50 billion dollars distributed every year within the various FFELP categories.

One way the definition of need was quickly broadened was to create two different kinds of Stafford loan: subsidized and unsubsidized.

In the first case, the Federal Government pays any regard that would normally accrue from the space the loan is originated until payments begin. Normally, no payments are due while the student is in school half-time or more, and for a six-month grace period after leaving. Students can request payments to begin earlier.

Since the interest is subsidized, these loans are generally need-based, meaning that aid officials look to student and family income in deciding whether the student qualifies. A number called the EFC (Expected Family Contribution) is used, by examining income information provided on the FAFSA (Free Application for Federal Student Aid) application. Available at: http://www.fafsa.ed.gov/

About two-thirds of all subsidized Stafford loans are provided to students whose parents have an Adjusted Gross Income of under $50,000 per year. Another 25% are awarded to those in the $50-100,000 per year range. But the definition of ‘needy’ is indeed flexible, since slightly less than 10% of subsidized loans are granted to students whose combined family income is over $100,000.

For those students who don’t qualify for subsidized loans, most will be eligible for an unsubsidized Stafford loan. Keep in mind, though, that the interest accumulates from the day the loan money is disbursed until the day it’s paid off. Even in the case of a modest $4,000 loan, at 6.8% the first year of interest is circa $230. That $230 is then added to the $4,000 and interest charges calculated on the higher figure.

Actually, the example is a little oversimplified, since amounts are calculated monthly not annually. The exponential equation hidden it is a little complex, but sample scenarios can be played with by using a loan calculator. A popular one is available at: http://www.bankrate.com/brm/mortgage-calculator.asp.

Since $4,000 is a very low amount as student loans go, the numbers can actually be absolutely a bit higher. The average undergraduate student (and/or parent) borrows about $15,000 per year in a mix of subsidized and unsubsidized Stafford and other sources.

A detailed breakdown of what can be borrowed by who is available at: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp or http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/ Fees apply to fall-back the loan, so students will actually receive less than the stated amounts.

Tip! Ask if there are in school student loan consolidation programs. These programs will help you lock your low rate while in school.

Obtaining student aid can be more complicated than playing the stock market. There are literally hundreds of possible scholarships, loan programs and spare forms of assistance. nevertheless for the overwhelming majority a Federal student loan program is the most likely source of funds to help give for school.

Most of that money loaned is associated with one of only half a dozen programs. Stafford (for students) and PLUS (for parents) with a couple of variations cover most circumstances. But beyond the program names/types themselves, there are two common categories that those seeking funding should be aware of. Which you choose can have a substantial financial impact down the road.

The two categories are: subsidized and unsubsidized college student loans. Students generally make no payments on either type until six months after leaving school whether they graduated or not. But because of the fact that concern amounts are calculated on the exceptional principle (the loan amount), it can add up to a substantial sum over a period of years.

Subsidized loans are a type in which the government pays on behalf of the student any interest gatherd on the loan during the years attended. Neither the student nor any co-signer, such as parents, accumulate interest on the principle while the student is in school. The clock only starts ticking six months after leaving.

Unsubsidized loans are the opposite. Though payments may or may not be due during school years, the interest is calculated from the day the loan is funded. Even at a modest amount, say $1,000, at 6% per year a student can incur an more debt of $60 the first year. That doesn’t sound like much, but that $60, if left unpaid is added to the principle. The following year the interest is %6 of $1,060 or $63.60.

The example is greatly oversimplified, since interest is calculated monthly not annually and so the amount actually rises much faster, in fact exponentially. The interest amounts are typically much larger, too, since loan amounts can easily be 20 times or more than the example. A simple loan calculator will allow the destined borrower to run through some sample scenarios.

Many loans are a mixture of subsidized and unsubsidized and funds may come partly from a Stafford loan, partly from a PLUS loan, or a character of other possible types and sources. Some students may not qualify for certain Federal student loans, because of parents’ earnings or other reasons. In that case, private loans and other funding sources have to be relied on.

The only way to know for sure is to fill out the standard FAFSA (Free Application for Federal Student Aid) application, available at: http://www.fafsa.ed.gov/

Using that, in conjunction with the required accompanying documentation - showing parents and student income, credit histories, current debt loads and other information - loan officers make a decision about whether or not to grant the loan.

Most students will qualify for at least some aid.

Tip! Inform your lender or service provider promptly about any of the possible adjustments that may affect the repayment of your student loan.

Over the past 40 years, just as with everything else, the cost of education has risen dramatically. norm tuition increases of more than 6% per year are middling today. Just as one example, in 1973 the cost of registration at UCLA (University of California, Los Angeles) was $208 per quarter. It is now at an end $2,300 per quarter.

That ten times increase is not too unusual - many things cost ten times what they did a few decades ago. Income, on the other hand, has risen about three times in the same period, from about $15,000-$30,000 per year to around $39,000-$42,000. The numlive befallrs vary by gender, age and more however as a rough guide, the low-lyinger area ~3:1 ratio is about right.

Now for the good news. There are more types of financial aid available today to students and parents than there ever has been. Financial aid, as the name suggests, is money that students and their parents get from scholarships, Federal and private lenders and a few other sources, to aid students in paying for education.

Once upon a time, students could depend almost entirely on Pell Grants and Stafford Loans to finance education costs, if not complete living expenses. Pell Grants are still given, but they’re need-based and express a small percentage of the education cost today. Stafford Loans are also need-based, and can range from 25%-40% of the average cost of financing school. Perkins Loans are similar, but reserved for the lowest income families.

Fortunately, PLUS Loans are available, which was not an option 35 years ago. These are loans to parents, not students, to help pay for the student’s education. The interest rates are average, and there are certain restrictions and fees, but they often form part of the total package.

A word to the wise about fees in general. Many loans are nominally for a specified amount, disclose $4,000 per year disbursed in two payments (one per semester). But it’s not uncommon for up to 4% in fees to be deducted from that amount before any funds are distributed. That 4% on $4,000 equals $160 you never see, yet have to repay. Be sure to look for low or no-fee loans.

Though Federal loan programs, like the subsidized Stafford and others, relocate no approval check and low fees and interest is paid by the government, they are not the only source of financial aid today.

The average financial aid package today volition declaration be a complex mixture of grants, scholarships (if possible), Federal and (probably) private loans. Rates range from 5% (Perkins) to the more common 6.8% or higher. With the recent big increase in defaults on sub-prime lending (mostly for mortgages), lenders are going to be more strict than before about credit history and income.

The best way to get started is to look at tables of the most common loan programs, what interest rates and fees they carry along with any eligibility requirements. One brilliant site that summarizes much of that information can be found at http://www.finaid.org/.

Tip! on the assumption that you have two kinds of loans, make sure to refinance them separately.

It is also advisable that you refinance your federal student loan first, before any other private loans.

Despite high education costs and the cost of borrowing to meet them, students and parents have some advantages today that didn’t exist even ten years ago. The Internet has changed the way financial aid is researched (and granted) in additional ways than one.

Today it’s child´s play to quickly access an enormous amount of data. Interest rates, qualifying criteria, loan limits and considerable more is readily available. on the contrary that also hints at one of the difficulties of easy data - the possibility of too much of it. The old axiom in the information technology business sums it up best: it’s like drinking from a fire hose.

Having so much information flood in, especially given the variety and complexity of loan programs today, bottle make analyzing it all that much more difficult. To overcome that problem, one aspect of the old-fashioned methods is still very helpful: seeking personal advice.

For students still in high school, planning a college education and seeking ways to pay for it, the school counselor is a good first begin. These professionals are there to help students sort through the bewildering array of choices, and to point out some of the potential advantages or pitfalls of different ones. But, unfortunately, the quality of that advice can vary completely a lot.

Professional loan counselors are not only up on the latest information, but go through regular courses each year to keep up-to-date and keep their professional standing. But, the downside is that they usually charge for their services. A few minutes of advice on the phone or in person is typically free, but any detailed program is for a fee. That’s understandable, since that’s how they make a living.

The online versions of professional loan counselors also have similar pros and cons. Since there’s so much variety on the web today, finding a mature source can be tough. The advantage of personal contact, which enables judging their reliability by hearing their voice or since their face, is missing. But with social networks and blogs growing so much the past few years, that drawback has largely been outweighed.

It’s possible today to get dozens of reliable recommendations from individuals you interact with regularly. When reading comments by new forum members it can be hard to judge the assistance of his or her opinion. But over time, you get to know who is providing objective and reliable information. Before long, you can locate one or more professionals to get more in-depth advice.

One place to start is with a site such as http://www.finaid.org/ or http://talk.collegeconfidential.com/forumdisplay.php?f=7

Be sure to allocate at least a year to consider the available options, two years would be better. Saving and planning can and should start much earlier, of course. But getting information that is anticipated to be useful means not putting too much weight on circumstances that exist several years before beginning college. Interest rates, available programs and qualifying criteria do change over time. And, who knows, the Internet innovators may come up with something even better in the future!

Tip! You can reduce your monthly payments by extending the duration of your acknowledgeance or asking for a lower suspicion rate.

With the rising outlay of education over the past few decades, reliance on traditional Stafford loans has generthe whole of eachy failed to cover even the majority of expenses. The with the addition of (Parent Loans for Undergraduate Students) loan program was designed to close that gap.

Though the interest rate is higher than other loans, the cap on borrowing is much more flexible and the loans are not need-based.

For the FFEL (Federal Family Education Loan) program, in which off the record lenders fund the loan, the interest rate is 8.5%. Through the Direct loan program the U.S. Dept of Education funds the loan directly at 7.9%. The difference of 0.6% can be substantial over the lifetime of the average loan. In the first year alone, on a 10-year loan of $25,000 it amounts to approximately $2050 - $1920 = $130 in interest.

For an exact calculation, experiment with some sample scenarios by using a loan calculator such as the one available at: http://www.bankrate.com/brm/mortgage-calculator.asp

With PLUS loans parents can borrow up to the total cost of education, minus any other financial aid amount the student is awarded. Though PLUS money is not cheap, it can make a difference when choosing which school to haunt or whether to attend at all.

However, since PLUS loans are not need-based, they do require a credit check. In this case, the student’s credit (with one exception discussed below) is not considered. The parents’ credit autobiography is what matters, since they are the signers of the promissory note. They alone are responsible for repayment of the loan.

In those rare cases where the credit history of the parent(s) makes them ineligible, a co-signer can enter into in the loan. A relative or other party can agree to guarantee repayment and take on the legal responsibility as a co-borrower. With the recent difficulties in the sub-prime borrowing arena, however, those cases are unfortunately less rare than they have been. That suggests that in borderline cases, the need for a co-signer is more likely.

Apart from changes in interest rates, another recent change to the program is to allow professional and graduate students to qualify for PLUS loans. The same interest rates and eligibility criteria apply. Like other students, they must be enrolled in an eligible introduction and program at least half-time.

Unlike many Stafford loan programs, repayment of a PLUS loan begins right away, typically within 60 days after the loan funds are disbursed. Interest begins accumulating from the time the first disbursement is made. Both principal and interest are paid in regular monthly installments while the student is in school. Payments are made to the private lender in the case of FFEL (Federal Family Education Loan) loans and to a U.S. Dept of Education servicing center in the case of Direct loans.

Be sure to calculate carefully all the costs associated with obtaining a PLUS loan, and look on it as a loan of last resort. Even a home equity loan, for example, might well be less expensive since the interest is tax-deductible.

Tip! The Graduated Repayment Plan is another direct student loan consolidation plan with a repayment period between 12 and 30 years.

Many of the common Federal student loan programs require no credit check and provide substantial sums for financial aid.

Unsubsidized loans, in which any interest accrued while the student is in school making satisfactory progress, are among the most desirable.

But these programs are need bjust ased and ofttimes carry other criteria that cause it difficult to qualify. yet when students (and parents) do qualify, the loans only cover a portion of the total cost of education, in many cases. When students and their parents find themselves in that situation, they can turn to in camera loans to make up the difference.

Private loans, too, own pros and cons, however. A credit check is all but universally required. For those with a good credit history that’s no problem. But ‘good’ is a relative term and if it isn’t good enough, borrowers will find themselves paying higher than optimal interest ratios.

Beyond the stated interest rate, there are other financial implications of private loans. Fees are often tacked on (or, rather taken off) nominal loan amounts. A relatively modest loan of $4,000 may easily have 4% in fees applied prior to distribution. That means $160 of the total is never seen by the borrower, but must be repaid. As a rough guide, every 3% of fees is equivalent to an additional 1% on top of the stated interest rate.

Private loans do have certain advantages, however.

The obvious one was alluded to above: the funds are available. Private lenders exist to make a profit on the interest and fees they charge. They have an interest in making money available to borrowers. As a consequence, they will work very hard to ensure that every applicant qualifies. Federal lenders, on the other hand, have an inflexible set of criteria and there is typically no real solicitation if your application is denied.

Not having to deal with that impersonal, often illogical, bureaucracy is another advantage of private loans. Lenders maintain customer service departments that, though understaffed, exist to answer questions so that customers can bring answers. Federal loan programs typically have contacts and help available as well. But the answers one gets are hit or miss in terms of quality.

But many other pragmatic considerations apply that make private loans desirable.

Neither students nor parents have to fill out the FAFSA (Free Application for Student Aid) form(s), nor supply the same supplemental documentation. Private loan applications tend to be simpler and the whole process easier. But, fees and interest rates may be higher or lower depending on the individual program.

The most desirable private loans will have no fees and interest rates that are about equal to the prime rate - 1%. The ‘prime rate’ is the rate banks charge one another or their largest, most favored customers. Getting a rate at prime is a good deal, getting a rate at 1% below prime is a enormous deal. But be sure to check for any fees. As described above, fees can substantially add to the total cost of the loan.

To get that classification of loan it’s usually necessary to have a great credit history and/or get a loan with a co-signer who has excellent credit. That situation may or may not apply to you. The only way to know for sure what is available is to dig into the specifics. One great place to start is to look at the table on a site such as http://www.finaid.org/loans/privatestudentloans.phtml

Use a loan calculator, such as that available at http://www.bankrate.com/brm/rate/calc_home.asp to run through some sample scenarios, once you have some figures in hand. Be sure to include all the actual costs over the lifetime of the loan, to get a picture of the real cost.

Tip! In considering obtaining student loans, it is important that you pull together basic facts about your finances and your financial status.

A scholarship, as distinguished from a student loan, is money given that does not have to be repaid. There are scholarships for academic extreme-achievers, athletes, Pacific Islanders and children of local widows. In short, there is a type of scholarship to suit any possible circumstance.

The trouble is finding them.

Most scholarships are academic oriented. They require excellent grades. But that is much just the first cut. In order to come first out over those with similar GPAs or SAT scores, the student often has to have other elements in his or her background. Sometimes that’s an award from Westinghouse or other science-based competition. But it could be having a history of community service. The variations are endless.

One of the easiest pathways to get started is to speak with a school counselor, to find out what’s available. But take what they say with some skepticism. They’re often overworked and not aware of the modern information. Continue that research by doing some web searches and dig into the thousands of possible scholarship programs.

Two of the larger sites that have massive, up-to-date information are FastWeb (www.fastweb.com) and CollegeAid.com (www.collegeaid.com/college-scholarship-search.html). Both have extensive lists of scholarship programs with amounts and a brief blurb on application requirements or criteria. In some cases, the initial criteria are as simple as having (or expecting soon) a high school diploma and being a U.S. citizen. Others require acceptance at a university and a specific residence.

There are scholarships for the children of veterans, for those who intend to major in Health Sciences, or those who are residents of Virginia, just to honour three. Most require good grades, but not all. Many require the student to be from a low-income family, but others scrutinize to ethnicity. In other words, they cover the entire spectrum of possibilities.

Some scholarships require evidence of more than just an outstanding grade point average or good test scores, or facts about personal background. Some will require that the prospective winner write an essay, as short as 250 words or as long as 5,000. The essay may be oriented toward listing personal achievements or merit, or the grantors may want to find out the prospect’s views on the world. Here again, they run the gamut.

Most scholarships are free, in the sense that the money never has to be repaid. But it isn’t always the case that the recipient receives or gets to keep the entire official amount. Some are taxable. According to the IRS, the next criteria apply to scholarships, with respect to taxability

Qualified scholarships and fellowships are treated as tax-free amounts if all of the following conditions are met:

- You are a candidate for a degree at an educational institution,

- Amounts you receive as a scholarship or fellowship are used for tuition and fees required for enrollment or attendance at the educational institution, or for books, supplies and equipment required for courses of instruction,

- The amounts received are not a payment for your services.

See also http://www.irs.gov/faqs/faq4-8.html

The only way to find out what’s out there, and if you’re qualified or have a chance to receive one, is to dig into the discrepant programs and start applying. It’s a lot of effort, but it just proves once again that there really is no such thing as a free lunch. Good luck!

Tip! If you are going to be living in student housing on campus, you need to determine how much dorm fees and charges will be for each of the two upcoming semesters.

Variable vs Fixed

Not too many years ago affection ratios on Stafford loans and other programs changed from fixed rate to variable rate. Then, when of July 1, 2006 they changed back to fixed again.

But they can change again. What the Gaccomplishednment does, it can undo. Also, because lenders have some flexibility, even official rates can be altered in subtle ways. Many lenders, for example, charge the Federally established origination fee of 3% and the deficiency insurance rate of 1%. Others are willing to absorb those costs to get your business. As a irregular rule of thumb, every 3% in fees is equivalent to approximately 1% in interest rate.

Rates and Interest Amounts

Though the interest rate changes can be modest, with the addition of loans increased from 6.1% to 8.5%, for example. On, say, even as low as $16,000 borrowed, a 2.4% rate difference equals (approximately) a $400 difference in interest charges the first year alone.

For exact amounts, per month, run sample scenarios using a loan calculator, such as that at http://www.bankrate.com/brm/mortgage-calculator.asp

The Future

There are no guarantees. The rates can change, since they’re similar to variable rate home loans, even after the loans are funded. Predicting interest rates, both near term and long term, is a task that challenges even the finest financial experts. If it were otherwise, the bond market would be a pretty dull affair (which it’s not). So, the best the average student or parent can do is to look to what those experts are predicting.

Follow The Leaders

Among the easier ways to follow those predictions is to look at various interest-bearing financial instruments, such as T-Bills or long-term collaborative bonds. By examining those numbers, potential borrowers can get the best available guess ababsent where interest rates are headed. That information is easily gained from any finance website, such as Yahoo Finance or some other personal favorite.

Looking at the 30-year Treasury bill, for example, shows two things: what the government is offering to sell debt for projected out over 30 years, and what the buyers of that debt are willing to pay. As that rate varies, most other long-term rates, such as student loan rates, will vary similarly (though not always exactly).

Corporate Bonds

The same can be said of certain corporate bonds. Ford Motor Co., for example, has been in financial difficulty for the past few years and that fact is reflected in their bond rates and ratings. Their quality ratings have dipped to near junk bond level, and the rates are significantly higher than average. Many are over 10% coupon rate, a full 5% above money market rates. For most of the large, older, ‘blue chip’ corporations, their bond rates on long bonds (over 10 years) are a good indicator.

Keeping Up

As rates rise, it becomes more difficult for borrowers to pay back the loan. Not only does that cost students and parents more money, but it can make it more difficult to qualify since the higher numbers are factored into lending decisions. Stafford and many others are need-based so it’s not a factor there, but interest rates of one program tend to influence others which may be credit history based.

In a volatile market, the best strategy for many students and parents is to obtain a private loan at a fixed rate. The best loans cost Prime Rate - 1%. That’s a very good deal, but borrowers will need very good credit to qualify.

There’s no ideal solution to financing the high cost of, and the high cost of falsification for, education today. But, as with any cost, shopping around to find out all the available options is the best bet for the long-term.

Tip! If you have two kinds of loans, make sure to refinance them separately.

It is also advisable that you refinance your federal student loan first, prep earlier than any other private loans.

Having a poor credit history is never an advantage. Fortunately for students and their parents, though, there are a number of loan and aid packages that don’t inspect at credit rank at all. indefinite Federal loans consider only need or other deedors, and ignore any credit history entirely, good or bad.

Pell Grants are one of the oldest, and disbursing them is based primarily on the economic status of the grantee. If the student and his or her parents are a low-income family, Pell Grants are as good as automatic. Almost. while in the manner tha with any form of Federal aid, that economic site has to be demonstrated through supplying documentation.

Those in charge of disbursing Pell Grants use a number, called EFC (Expected Family Contribution), to decide whether to give the money. Other factors also come into play (such as the cost of tuition and more), providing a rounded picture.

The grant is a gift, not a loan and is currently a maximum of $4,050 per year. That may seem be partial to a substantial sum, and it certainly helps a great deal. But with annual tuition upwards of $5,000-$10,000 or more it doesn’t cover everything.

Most students, therefore, will want to seek a loan in addition to a Pell Grant to fund their education. There are many that are similarly need-based. One of the most common are Stafford Loans, which come in two classs.

The first type of Stafford Loan, and the most desirable, is called ’subsidized’. The term comes from the fact that the government pays any interest that accrues during the period the loan is not being repaid. That period is typically while the student is carrying a half-time or greater load of classes, and for the first six months after leaving school.

The second type is ‘unsubsidized’ in which the student is responsible for any interest on the eminent principle. If paid in installments while attending classes, it may be modest. A $4,000 loan paid over 120 months carries a monthly payment of $42.43 at a 5% interest rate. The interest portion is roughly $9 per month. If it accrues unpaid over several years, though, it can add a substantial amount to the total repayment after graduation. Any unpaid amount gets added to the prinicple, with the interest rate applied to the total.

The advantage, however, of the second type is that they are almost always available to any student. In most cases, they won’t cover more than about 25%-40% of the total costs, so students will need to supplement the loan with other sources of funds.

Limits compass from $2,625 ($3,500 starting July 1, 2007) the first year, rising to $5,500 for the 3rd and 4th years, for immature undergraduate students. Independent students can lend up to $10,500 per year. Graduate students may borrow up to $18,500 ($20,500 starting July 1, 2007), with a total of $138,500 over the lifetime of the education.

A detailed collapse is available at: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp and http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/ Fees apply (up to 4%) to fund the loan, so students will actually receive less than the stated amounts.

Perkins Loans are another type of ‘no credit required’ student loan. A low interest rate loan (currently 5%), it allows dependent undergraduate students to borrow up to $4,000, with a better of $20,000 total. Details are available at: http://studentaid.ed.gov/students/publications/student_guide/2005-2006/english/types-perkinsandstaffordloans.htm.

Tip! If you have two kinds of loans, make sure to refinance them separately. It is also advisable that you refinance your federal student loan first, before any other private loans.

The costs of education today are ten generations what they were less than 40 years ago. But those differences become even more stark when considering underclassify versus graduate programs. Fortunately, there are resources at hand to both types of student to help them pay for college.

Undergraduates typically rely on a complex mix of scholarships, grants and loans. Those loans are sometimes taken out by undergraduates alone, others by their begetters alone, sometimes a mixture of the two as when the parent becomes a co-borrower or co-signer.

The most common programs for students remain the unsubsidized and subsidized Stafford Loans. Subsidized loans are the most desirable, since the government pays the interest while the student is in school. But they are need-based. Unsubsidized loans are not need-based, making them available to a sizeable wider group of students.

A detailed breakdown of what bottle be borrowed by who is available at: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp or http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/

Graduates, on the other hand, often have uncommoner options for scholarships and grants just at the time when tuition costs jump. But teaching and/or research assistantships usually more than make up the shortdrop. They, in effect, have very low-paying (and very long hour) jobs while attending courses and doing research.

Recently a new option has become available to graduate students: PLUS loans. Though the acronym stands for Parent Loans for Undergraduate Students, they are now an option for many grad students. In the undergraduate case, parents are the borrower and are responsible for repayment. In the case of grad students, they become the responsible party.

PLUS loans have several advantages.

First, they’re available. Since they’re based on acclaim quality, not need-based, most borrowers can qualify. Relatively few grad students have had time to get into the credit binds that working adults often fall into. As a result, though their history may be sparse, they usually have few dangerous marks on their credit report. That makes the decision easier for college money aid officials, who determine eligibility.

On the other hand, current interest rates for PLUS loans are not low by historical standards. Rates are either 7.9% or 8.5%, depending on the clear-cut type. Even at the lower rate, on $10,000 borrowed the first year interest amount is over $750 and payments start within 60 days of when the funds are disbursed with no grace period.

Caps on undergraduate and graduate loans, for all non-private loans, differ as well. Even the maximum amount over the lifetime of the program varies between undergraduates and graduates.

Both types of students will need to research all available options. But keep in mind that, though it commonly requires a combination of funds from several sources, money to pay for school is now more available than ever. The total funds borrowed last year by all students was over $50 billion. That money is going to someone. It can easily be you.