It depends on when you took out the loans. Any federal loans taken out before July 2006 have variable interest rates. Consolidating these loans after July 1 of this year will reduce the interest rate to 2.6% from its current 4.2%, predicts Mark Kantrowitz, publisher of FinAid, a Web site that tracks the college financial aid industry.

The loans that you took out after July 2006 are a different matter. These loans have a fixed interest rate of 6.8%, and there’s not much you can do about it. While there has been some discussion in Congress about allowing past borrowers to re-consolidate at these rates, the talk hasn’t gotten serious because the interest payments help support the Pell Grant program, Kantrowitz says.

Your best strategy might be to prepay the loan by increasing your monthly loan payments, if you can afford it. That will whittle the principal down faster and reduce the amount of interest that you pay over the life of the loan.

Even though some private student loan companies may advertise loans with variable rates below 6.8%, you should generally steer clear. As many mortgage borrowers found out the hard way, low teaser rates often reset after a few years and climb much higher.

Be sure that you have completely exhausted all other financial aid options.  Private student loans should be used only as a last resort.  Consider looking into federal Pell grants, federal student loans such as Stafford, Perkins, and Grad PLUS.  Always look for scholarships and be willing to accept work-study as well. Private student loans usually carry higher interest rates and have less options for repayment.

Figure out exactly how much money you will need to go to college.  Financial Aid is based on an award letter which is equal to the cost of attendance minus and sources of financial aid.  Once you know this number, you will be able to make better decisions about how to pay for it.

Find yourself a creditworthy co-signer.  The lending world is now largely requiring that as a person with little or no credit history, you will need someone to cosign the loan with you.  The better their credit, the lower your rate will be and the more likely it will be that you are approved.  Find the person before it gets to be crunch-time.

FInally, ask your schools financial aid office who they recommend.  Every school should have preferred lenders and thanks to crackdowns, they should be the best products available.  Once you have the list, do some research for yourself.

College loans are the first of many extremely important decisions you will face as you head out into the world.  Understand what you are getting yourself into and be prepared for what lies ahead.  Good Luck.

Many private colleges are reacting to this situation by expanding financial aid packages in an attempt to avoid losing the families who are on the fence and might be priced out of attending.  Some private colleges have begun to impose a hiring freeze and have stopped construction projects in anticipation of the need to increase financial aid to the students.

There is no doubt that cost is becoming one of the major factors in the minds of students and families.  This may end up being a good thing for everyone as the cost of college has ballooned over the last 5 years.  Perhaps colleges, both private and public, will start to bring costs down to a manageable level so that a degree is once again possible for everyone in this country.

A few things to consider when comparing public and private colleges and universities:

The following lenders have drastically reduced private lending:

Lender / Lost Volume
State Loan Agencies / $750 - $1,000 million
Sallie Mae / $300 - $900 million
EFP / $750 - $1,100 million
Bank of America / $700 million
Key Bank / $450 - $500 million
Campus Door / $375 - $450 million
Student Loan Xpress / $290 million
My Rich Uncle / $227 million
College Loan Corp. / $200 - $250 million
Wachovia / N/A

Senator Schumer has received and encouraging response from Margaret Spellings, the Dept. of Education secretary and hopes to have a commitment from the federal reserve and treasury by next week. The main three points of the plan are:

- Encourage colleges “to enroll in the Direct Loan program “as a backup for their students” in the
event that private loans become less available.” In dozens of calls that I have had with financial aid
administrators recently it seems more and more schools are heeding his advice.

- Establish a commission to ensure government loans will be available if private loan market collapses.

- Monitor implementation of rescue plan to ensure student loan market is protected.

This all comes as good news to college students who are finding it extremely difficult to pay for college. For most student enrolled in a four year school, the entire act of funding their education has been turned upside down in the last 12 months. We will see if this plan can turn things around.

A quick video with some great tips about how to deal with that student loan and your new found freedom.

So how do you get started?  Well the first thing you should do is read this list.  The second step is to talk to your high school guidance counselor and the college or university’s financial aid office.  Make sure you have done your homework before you go so you are ready to ask the important questions.  The third thing you absolutely MUST do is fill out the FAFSA or Free Application for Federal Student Aid.  Taking the half hour that this application requires automatically qualifies you to receive federal loans and grants.

So now on to the tips.  They are broken down into three easy categories.

1.  FREE MONEY - We all love free money, here’s how you get it.

The following is tips to get money that you DON’T have to pay back.  Keep in mind, a lot of scholarships and grants require a little effort and apply to certain individuals, but that just means that there are fewer people who are likely to apply for it.  Take advantage of as much as you can.

Scholarships and Fellowships - There are more than one million scholarships hand out each year.  They are based on certain skills or in many cases on individuals of certain races, nationalities, religious affiliations, location, and even relation to a cancer victim.  Obviously, many of these will not be accessible to most of you, but with a little patience and research you just may find one that you are eligible for.  A great site for searching for scholarships is Fastweb.  Remember, this is free money so take the time to research it.

Federal Pell Grant - This is a federal assistance grant that is awarded to lower income students who haven’t yet received a bachelor’s degree.  Awards range from $400 to $4,000 based on need, and remember that this is free money.  As long as your family income is below $50,000, it is worth applying for.

Academic Competitiveness Grant - This grant is awarded to first-year college students who graduated after 1/1/06 and second year college students who graduated after 1/1/05.  It is tied in to the Pell Grant and recipients receive an additional $750 for freshman and up to $1300 if you are a sophomore.

National SMART Grant - (National Science and Mathematics Access to Retain Talent)  This grant is available for third and fourth year students who maintain a 3.0 GPA and are majoring in life science, physical science, computer science, mathematics, engineering, or a foreign language.  This grant can get you up to $4000 per year.

2.  Scholarships for Nerds - All of a sudden, being a nerd, geek, dork isn’t such a bad thing.  Use the gifts you’ve been given and get some free money for college.

Google for Girls - (Anita Borg Scholarship) $10,000 for senior women in the field of computer science, computer engineering or a related technical degree.

Apple Scholar - Winner gets a MacBook, iPod Nano, and $2,000.  This scholarship is available to high school seniors who show excellence in technology and use that in an innovative way.

Microsoft Scholarships - $500,000 up for grabs each year to undergrads.

3.  Loans - These need to be paid back, but federal loans offer a great rate and relatively easy repayment.  Here are the basics on loans.  Proceed with caution and know what you are signing up for.

Stafford Loan - This loan is offered by private lender (FFELP) or directly by the government (FDSLP).  They are offered as subsidized loans which means that you pay no interest while you are in school, or unsubsidized which means you pay interest while you are in school.  The limits of these loans are up as of last year to $3500 for freshman, $4500 for sophomore, and $5500 for each remaining year.  These loans have a fixed rate of 6.8% and that rate is dropping over the next few years.

Perkins Loan - This is a campus based loan that is made by the school you attend.  It has a fixed 5% interest rate.  The amount available depends completely on the school you go to and can be as much as $4,000 per year up to a maximum of $20,000.

Plus Loan - (Federal Parent Loan for Undergraduate Students) This loan is offered to supplement the financial aid package a student receives and is taken out by the parents of the student.  It has a fixed 8.5% rate this year.

Private Student Loan - These loans are offered as an alternative to the federal loans available and should be used for the extra costs associated with college.  They are credit based loans and require a co-signer in most cases.  They carry the same repayment schedule as most federal loans and allow the student to defer repayment until after graduation, but like an unsubsidized Stafford Loan, the interest will accrue while you are in school.

4.  Other Ways  to Get Money for College - Above are the most common ways to pay for college.  The following are some alternatives that require a little more dedication and perhaps rethinking how you want to attend school, but they are good options for those of you who just can’t get the money any other way.

Military Service - The GI Bill and various other incentive programs exist to help those who wish to put in a few years in the military.  There is also the ROTC program which helps you work your way through college.

Federal Work Study - The FWS Program allows students to work on campus for a small stipend to help pay for college.  It is usually a part time job around the college and pays a little extra to help you afford your life in college.

529 College Savings Plan - This is a pre-tax deduction which allows parents to save for their child’s education.  Not really an option unless your parents thought ahead, but what a nice perk if they did.  The other bonus of these plans is that they aren’t taken into account when the financial aid office is figuring out a student’s financial aid eligibility.

Community Service - There are numerous programs such as AmeriCorps, PeaceCorps, Teach for America, and the National Health Service Corps which offer tuition money for those willing to volunteer a few years of their life for a great cause.  The bonus is that you get to travel the world and have some amazing life experiences.

College isn’t cheap, but the more effort you put in before you head off to school, the better you will be when you graduate.  Take the time, do the research, exhaust every possibility, and then you can go and enjoy your four years in college.  Good Luck.

Here is a synopsis of the advice they give:

Don’t be lured in by free t-shirts.
Credit card providers will do everything in their power to hook the student into getting a credit card. Many attach a free gift or special offer and while that t-shirt of frisbee might look nice now, it isn’t worth the headache that a credit card will ultimately bring you. The most important thing to consider when applying for a card is the terms and conditions, not the free stuff.

Piggyback on a parent’s card.
This is a good idea on many levels. First, your parents will most likely have much better rates because they have a long history of established credit. Second, having your card tied in to your parents account gives them the opportunity to see how you are using your card. While that might not seem like a great idea, you will think twice before spending $200.00 at the local watering hole if you know your parents will see your bill.

Know your credit limits.
Usually credit limits are low when you get you first card. This is a good thing. It keeps your debt manageable, and allows you to start to build your credit score at an early age. Whatever you do, don’t go over your limit or you will pay some hefty penalties. Keep track of your spending.

Remember, promotional rates are temporary.
Just about every credit card offers a promotional rate for a fixed period of time to attract new customers. Do your homework and find out exactly how long, and then make sure you know what the APR will be set at after the promotional rate has expired.

Watch out for penalties and unnecessary fees.
The biggest pitfall with a credit card other than spending too much, is to have unnecessary fees added onto to your balance. These fees are most commonly associated with late or missed payments. In most cases, any missed payment results in a penalty plus a resetting of the APR to the highest possible rate.

My last piece of advice is to keep one card only. The more you have, the more likely you are to use them and confuse them. Keep it simple and good luck.

Watch CBS Videos Online

Textbooks

This resource has 40 different places for college books (unabridged) online

A new argument has come up about textbook torrents, while many may be illegal, it may be a good way to obtain a digital copy of a textbook that you have already purchased. For more information on what textbook torrents are, see this article.

Here are 29 places where you can buy textbooks, so make sure you shop around…

Only need a textbook for a short time? Well Chegg is like a Netflix for textbooks and allows for textbook rentals here.

General

100 Minority Scholarships for anyone who may qualify.

Not applicable for common scholarships? Well check any of these weird scholarships and see if you qualify.

Next time you invest in a six-pack maybe you should think about investing in an IPO, this interactive tool shows you how much you would have made if you had 10 different stocks in your personal finances back in the day.

Grad Students, remember that you can use different methods to get free money for grad school, Kiplinger has a guide for you.

And don’t forget private student loans when all else fails, as they are still a choice when you need to bridge the financial aid gap!

In additional to private student loans, many families rely on home equity loans to help fund their children’s education. Unfortunately, many families are now struggling with falling home values and tightening credit in the home equity loan market. This makes the private student loan market even more important. And that’s why you’re likely to see advertisements for all kinds of private student loans including Astrive student loans, Chase student loans, CampusDoor student loans and others.

Private Student Loans Can Help Fill the Void

Most private student loans are designed specifically to help families pay for education so they generally come with in-school deferment provisions. At the same time, most private student loans allow families to apply at any time during the school year. This kind of flexibility - applying at any time and postponing all payment until after graduation - is a reason why private student loans like Astrive have grown so dramatically.

If you need additional financing to help pay for college costs like tuition, room and board, a computer and other school fees, first attempt to locate scholarships, then federal student loans and, finally, pursue private loans. Do your research before making any decisions and talk to everyone who can help including your parents and your financial aid office. Paying for college is complicated but there are a lot of resources to help so do your homework.