Putting a child through college can be very financially challenging. The expenses of college tuition and the fees that accompany it don’t even cross many peoples' minds until it is time for their child to apply for a school.

According to The College Board, a non-profit membership association, the average cost of sending one in-state student to a four-year, public institution in 2006 was roughly $13,000 per year including tuition, room and board, and other fees for the year. This figure accumulates to over $50,000 over the course of four years. The cost for out-of-state and private institutions is significantly higher.

There are several options for current students, parents, and graduates needing to pay back loans that are worth reviewing. We will only review loan options here, but you can click the links below to learn more about the others.

• Loans - Government and Private
• Scholarships
• Grants

Stafford Loans

Stafford loans are available as either subsidized or unsubsidized loans based upon the student’s financial need. A subsidized Stafford loan is available to a student in financial need and, therefore, the government covers the interest on the loan while the student is in school at least half –time (four hours for graduate students), during the six month grace period after graduation, and during an authorized deferment. An unsubsidized Stafford loan is available to students beyond what is determined to be their financial need. The interest accrued while the student is in school on money borrowed in this type of loan is the responsibility of the student and not the government. The interest can be deferred until after graduation but it will be added to the loan principal, so it is almost more advisable to pay the interest as it accrues. Currently, Stafford loans have a fixed interest rate of 6.8%.

Federal Perkins Loans

Federal Perkins loans are another need-based loan option for students. The grace period of nine months is especially nice, however, the $6,000 per year limit can be a bit restrictive. There is also a $40,000 lifetime limit which is to include any Perkins loans you may have taken during college. The interest rate is helpfully fixed at 5% and no interest accrues until the student begins making payments.

Private Loans

Private loans are a final option if there are gaps left over to fill. The advantages are that interest rates have room to be competitive and you can usually borrow more, plus most lenders will give you the same six month grace period. The potential down side to these loans is that you have to have excellent credit, and often a cosigner, to obtain the loan.