If your student's financial-aid package is made up entirely of grants and work-study, with no loans, consider yourself blessed. If you have to borrow, start with the programs below. All but the institutional loans are backed by the federal government.
| Row 0 - Cell 0 | Smart Ways to Pay for College |
| Row 1 - Cell 0 | Everything You Need to Know About College Aid |
| Row 2 - Cell 0 | Best Values in Public Colleges |
Perkins
Available only to students with exceptional need, Perkins loans carry a fixed 5% interest rate. Repayment begins nine months after graduation; until then, the federal government picks up the interest. If your student qualifies, the financial-aid award will say so.
Subsidized Staffords
Like Perkins loans, subsidized Staffords are need-based. Loans disbursed for the 2008-09 academic year carry a fixed 6% interest rate. The feds pay the interest until repayment begins, six months after your student leaves school. Borrowers can choose among several repayment options.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Unsubsidized Staffords
Any student who applies for federal financial aid can get these loans, but interest starts accruing as soon as the loan is disbursed. The rate is fixed at 6.8%. As with subsidized Staffords, borrowers can defer repayment until six months after leaving school and choose among several repayment plans.
Parent Plus
You have to pass a basic credit check to get one of these loans, which carry a fixed interest rate of 8.5%. Repayment begins within 60 days of disbursement, but some lenders let you defer repayment until after your student graduates.
Institutional Loans
Offered or sponsored by the school itself, they can be a great deal -- or not. Examine the terms before you sign up.
For more information or to review a loan application, visit the U.S. Department of Education's Federal Student Aid site.
More on Kiplinger's
-
Fired Up By the Masters and RBC Heritage? See These Homes for Sale By Golf CoursesFive homes for sale near golf courses, for people who can't get enough of the tour.
-
The Economic Impact of the US-China Trade WarThe Letter The US-China trade war will impact US consumers and business. The decoupling process could be messy.
-
How Intrafamily Loans Can Bridge the Education Funding GapTo avoid triggering federal gift taxes, a family member can lend a student money for education at IRS-set interest rates. Here's what to keep in mind.
-
How an Irrevocable Trust Could Pay for EducationAn education trust can be set up for one person or multiple people, and the trust maker decides how the money should be used and at what age.
-
UTMA: A Flexible Alternative for Education Expenses and MoreThis custodial account can be used to pay for anything once the beneficiary is considered an adult in their state. There are some considerations, though.
-
Coverdell Education Savings Accounts: A Deep DiveWhile there are some limitations on income and contributions, as well as other restrictions, a Coverdell can be a bit more flexible than a 529 plan.
-
529 Plans: A Powerful Way to Tackle Rising Education CostsContributions to 529 plans grow tax-free and are not taxed when they are used to pay for qualified educational expenses for the beneficiary.
-
Roth IRA Contribution Limits for 2025Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
