Student Loans

Thing No. 1  

Believe it or not the Feds can be your friend

Tiny fees, low rates and good terms what's to hate?  if you're just starting the process then you should know that it all starts with federal loans and the best place to begin is FAFSA, where you apply for the loans.  If you want some basic education before diving in you can get a good primer at the fed's .gov site.  Federal loans likely won't cover all the books, beer and bail your precious one will require but they are the first piece in most people's financing.   

The Feds cover the two primary categories of loans including; student and parent loans (e.g., PLUS loans).  These are likely going to be the least expensive options.  

Thing No. 2  

Home Sweet Home

Make sure to check out whether your state is in the student loan business. They sometimes offer discounts on federal rates due to early payments or other conditions.  A lot of states got out of the business due to the credit crisis but George W and the feds are backing the states and other lenders and several are getting back in the business.  Collegesscholarship.org has good information and links to every state program.  Make sure to check all of this with your state educational aid office and meet with your school's financial aid office.  

Thing No. 3  

Duck the privates lenders like they have scabies

Sure you can get rid of scabies just like you can eventually pay off a higher interest loan but wouldn't it have been better to avoid the whole thing in the first place?  The bait for these higher interest loans is that the student can be the primary borrower, with parents as co-signers.  The hitch?  Co-signers are still responsible.  Better to go with the Federal Plus option and make the little chicken nuggets help pay it off.   

Thing No. 4  

Is there honor among thieves?

If in the end you have to supplement what the government coughs up then make sure to navigate the private waters carefully.  The variance between what gets put in the lender fees and the interest rates between different providers can make your head spin.  Lenders who don't charge fees are probably burying them in the interest rate.  Check out FinAid's Loan Analyzer Calculator which creates fair comparisons between different lenders offerings.