Grants, scholarships, work-study and other forms of gift aid are valuable ways to cover the cost of a college education but the fact is that it rarely covers the full cost of obtaining that degree.

Many students have to turn to government funds and private loans. The Federal education loan programs are the most attractive because they offer the lowest interest rates as well as flexible repayment plans. Federal law sets the maximum interest rates and fees that lenders may charge for federally-guaranteed loans.

With Private consumer loans, there is no such mandate so lenders can charge higher rates and fees. However, these private lenders are trying to stay competitive to attract borrowers so ask about their student loan discounts. Visit CollegeLoanSite.com to read more.

The three basic Education loan categories are: Student Loans (such as government-guaranteed Stafford and Perkins loans) are for students with so-called "exceptional" financial need. Parent Loans (known as PLUS loans) and Private Student Loans are other choices. Some students opt for a type of loan, called Consolidation Loan, which bundles all the loans into one lump sum, making repayment simpler. Visit CollegeLoan.com for more information.

For those whose parents' incomes are too high to qualify for government aid, but not sufficient to cover the full cost of college, the most viable option is to borrow from private lenders.

These Private Student Loans carry higher interest rates than government grants. Financial advisors warn that with rising interest rates the best option is to consolidate these loans and lock in a lower rate for the life of the loan.

College debt has doubled in the last 10-years, according to the Project on Student Debt, a non-profit advocacy group. One reason is that lenders have slashed rates on student-loans but that means borrowers are making smaller payments on deeper debt.

According to 2003-2004 statistics published in the National Postsecondary Student Aid Study (NPSAS), two-thirds of 4-year undergraduate students graduate with debt; the average loan debt amounting to more than $19,000.

Keeping a lid on future debt has never been more important, given the current interest in continuing education. More students than ever before are going on for post-graduate degrees.

---