So it's more important than ever to get the best possible deal. For students, a variety of low-cost federal loans are available. The most attractive are two designed for students who are deemed to need substantial financial help. The best is the Perkins loan, with a super-low 5 percent interest rate. A student who does not qualify for a Perkins or a subsidized Stafford can take out an unsubsidized Stafford, also at 8.25 percent.
Interest begins accruing immediately, but payment can be deferred until six months after graduation.
For parents, the place to start is probably a home-equity line of credit, which allows you to borrow 50 to 80 percent of the market value of your house. It's easier to qualify for the credit line when your monthly debt payments are low. As we noted earlier, federal PLUS loans have become an essential college financing tool, and they are often the best deal for parents after home-equity loans. Repayment begins 60 days after you receive the loan. You must pass a credit check, though it's less stringent than the process for a mortgage.