With the cost of higher education on the rise, it is more important than ever for students and families to do their homework when it comes time to pay for college. Sallie Mae, the nation's leading provider of saving- and paying-for-college programs, says a simple 1- 2-3-approach can help navigate the oftentimes confusing maze of financing options.

Step one involves researching money that does not have to be repaid, such as scholarships and grants. This type of funding is available from a variety of sources, including federal and state governments and private entities -- employers, professional associations, as well as educational institutions. The Internet can be an excellent tool to use when looking for college financing options. For instance, http://www.collegeanswer.com/, Sallie Mae's online planning and paying for college Web site, provides an array of tools and resources, including access to an award database containing more than 2.4 million scholarships worth over $15 billion.

The second step in the paying for college search is to apply for federal loans, which typically have below-market interest rates and more flexible repayment options. Says Martha Holler, spokesperson for Sallie Mae: "Even if you think you are not eligible for federal money, you can't be sure until you try. Complete the Free Application for Federal Student Aid (FAFSA) to begin the process."

Once free and federal money options have been exhausted, students and families may find they still fall short in terms of college financing. Private, or alternative, loans can help fill the gap. A variety of private loans exist today, each with its own requirements, features and borrower benefits, depending on the individual lender. Because the relationship established between a borrower and a lender is likely a long-term one, it's important to choose a lending company with a reputable brand name, as well as industry experience.

"Before making a decision on any student loan, become educated on the options available," notes Holler. "Most important, know how much money you need upfront so that later on you are not saddled with more student loan expense than is necessary."

As part of an on-going effort to better educate students, parents, graduates and others about paying for college and managing debt responsibly, Sallie Mae recently launched its 'Be Debt Smart' campaign. Consumers will find a wealth of information and support at http://www.salliemae.com/bedebtsmart, including tips on how to borrow wisely for college and how to establish and maintain good credit with responsible financial habits.

"For many students, college is a crash course in personal finance 101. Therefore, it's important for both students and parents to understand the full effect of their college spending and make wise choices now that will help them later," Holler adds.

Source: Sallie Mae

Web site:
http://www.salliemae.com/
http://www.salliemae.com/bedebtsmart
http://www.collegeanswer.com/