Ways to Find Cheap Student Loans

Most students can still get enough reasonably priced loans to cover the bulk of tuition at local public universities.
Finding bargain educational loans can take a little work, though, discovered Gary Krist, the father of a Bethesda, Md., high school senior. He was shocked when he saw the expensive loans packaged into his daughter's financial aid offers this spring. After fees, some federal parent loans, such as the ones Krist originally was offered, will cost more than 9 percent a year.


Community college for, typically, about $2,500 a year in tuition, upperclassmen typically have to pay an average of about $7,000 a year for tuition, plus an additional $1,000 for books. Living away from home typically adds $10,000 or so in housing, travel, and food expenses. And there simply isn't enough scholarship money to help every needy student. So loans are often the only way to pay for a degree.


Students who are at least 24 years old or whose parents have bad credit can get Stafford loans of up to $9,500 to $12,500, depending on their year in college. Staffords for the fall of 2009 will charge no more than 6.8 percent a year in interest plus a 1.5 percent upfront fee, for an average annual rate of 7.1 percent. Students who qualify as needy may be able to get Staffords that charge no interest at all while they are in school and just 5.6 percent after graduation.