With college students returning to classes in droves over the coming days, many parents are still scrambling for ways to cover the cost of higher education. A tough economy and stiffer lending requirements is putting the squeeze on some families, forcing some people to turn to high interest rate credit cards to pay for tuition.

Even the age-old fall back, home equity, has fallen on hard times as housing prices plunge and parents find that what little money is available to them won’t pay for tuition or the interest rates being charged are causing some to pause.

Worse yet, are those lenders who’ve you dealt with in the past who are no longer writing student loans or have ceased business altogether. This has been especially challenging year for families looking to renew a relationship with a lender they like only to learn that it isn’t business as usual for them.

Searching For Student Aid

Even as classes get ready to start, it might not be too late to secure funding for the 2008-2009 academic year. You’ll have to move quickly though as the number of applicants is up while the number of lenders is down — private student loan lenders are definitely being stretched. Here are some tips to help you secure financing this year:

Search Around – Our sister site, SayStudent.com, offers excellent tips and advice on how to find private student loans. Download a free copy of the free Student Loan Aid Booklet to help you get organized and track what you need.

Consider PLUS Loans — PLUS loans or Parent Loan for Undergraduate Students allow you to borrow up to the full amount of college tuition minus any financial assistance. With a fixed APR of 8.5%, this rate is much lower than a credit card and slightly below what some private student loan lenders are charging. With a PLUS loan, just remember that you are responsible to repay it, not your student.

Contact Financial Aid — Your college’s financial aid office can help you out by sharing with you a list of recommended lenders. Be careful as some schools work closely with lenders receiving contributions from them in order to be included on their list. Shop around!

Payment Plans — Some schools will allow you to make payments over the coming academic year, understanding that students might be very limited when it comes to paying for their education. Usually offered interest fee, you may have to pay an administrative fee which is typically set at $50.

It certainly is a tough year for some families, requiring parents and students to work together to find a way to pay for education. If your financial condition has worsened since your child first entered school, you could be eligible for additional relief. Contact the college’s financial aid department to find what your options are.

Tags: PLUS loans, private student loans, stafford loans, student aid, student lending

Six years after starting school your son or daughter has a Master’s degree from a top notch university such as Brown, Duke, or Gonzaga. Years of hard work and reaching for their best has paid off as your offspring has landed a plum position with a research company in the Dallas area. That $50,000 per year starting salary certainly is competitive but your adult child has one big problem: student loan debt in the neighborhood of $106,000! Yes, school is done but much debt remains; enough so that it could take a full 20 years to retire his or her obligations.

Nobody wants to be saddled with too much debt, unfortunately many university graduates are faced with that proposition. Eventually, additional types of loans will need to be considered including loans for a new car or a first home; having student loan debt on top of it all of that can make it very difficult to make payments on that new car or house.

There are some options you need to know about at this point in the student loan repayment game. These options include:

A Direct Consolidation Loan – Yes, chances are your adult child’s student loans are through a variety of lenders making it difficult to juggle different payment due dates throughout the month. Thankfully, you can consolidate these loans into one payment to just one lender saving the hassle of sending out multiple payments throughout the month.

Variable Repayment Plans – Unlike the standard student loan, borrowers can elect to repay their students loans by choosing a variety of repayment plans. If you consolidate your loan through the U.S. Department of Education, you have as many as four repayment plans available to you. These plans include: a standard repayment plan where your repayment amount stay fixed for ten years; an extended repayment plan where the monthly bill is lower but the repayment period is longer from 12 to 30 years; a graduated repayment plan where you have 12 to 30 years to repay your loan and where payments bump up every two years; and an income contingent repayment plan that is based upon your salary and can be spread out for as long as 25 years.

Of course, former students must know that if they choose a student loan consolidation loan at any time during their 180 day grace repayment period that starts upon their graduating from school, then the repayment on the consolidated student loan must begin at once. Therefore, if you are considering consolidating your loans you may want to time it so that you are either ready to make your first payment ahead of time or have the consolidated loan kick in after your grace period has expired. Yes, you may have to make payments to a variety of lenders until that happens, but once the consolidated student loan has been approved then you will only have to make one monthly payment.

So, who is eligible for a government student loan consolidation? Well, if you have at least one Federal Family Education Loan (FFEL) or Direct Loan that is in its grace, deferment, repayment, or default status than you are eligible for this type of loan. In addition, you can consolidate a PLUS loan, a Perkins loan (provided that you also have a direct loan or FFEL loan too), and you can even consolidate some health profession loans.

Finally, in many cases you are allowed to change your repayment plan options as time goes by. Perhaps the standard repayment plan was working well for you, but you since married and had a child. You may find that mortgage payments are putting enough of a squeeze on your finances, therefore an income contingent repayment plan may be the best choice for you at this time. Regardless, you have some options available to you when you select a direct consolidation loan, options that several different student loans may not have made available to you.

So, should you consider consolidating your student loans? That answer is “yes” if you are looking for more options than what you have available to you now and you are looking to save money, reduce your hassles, or extend your repayment period. Please visit the U.S. Department of Education’s student loan site at LoanConsolidation.Ed.Gov to learn more about the options which are currently available to you.

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Matthew C. Keegan is a freelance writer who contributes his work to various online and print publications. Please visit the following pages to obtain information about reducing student loan debt and to learn about smart money tips.

Tags: student lending, student loan consolidation, Student Loans