As the loan world continues to evolve, rules regarding federal student loans, private student loans, and interest rates will change. You will likely see the effects of these changes on your pocketbook whether you are a parent looking to borrow money to pay for your child’s college education or you’re a college graduate with loans to pay off. Here are some tips on how to deal with the changing world of student loans.

Pinch your college loan pennies

If you’re heading off to college this year, pay close attention to any borrowing you do and make sure you only borrow what you need. If you overspend, don’t budget well, or end up with a major tuition increase, you could be out of luck—and out of money—before your last year of college is over.

If you are an undergraduate student looking to make the most of your educational resources, begin by looking for available grants and scholarships. Also consider work-study programs. After exhausting those sources, you can think about a college loan. You should take a close look at the Stafford Loan and Parent PLUS loans.

Undergraduate and graduate students with “exceptional” financial need will find a federal Perkins Loan to be a prime consideration.

The Stafford Loan and Graduate PLUS are other options for grad students

If you are a graduate student, the Stafford Loan is a good source of funding. In addition, Graduate PLUS loans are available for you to take out on your own behalf, adding to the choices you have for borrowing money to pursue your master’s or doctorate. However, the interest rates, fixed at 8.5 percent, are generally higher than the rates for the Stafford Loan. There may be better rates with private student loans if you have good credit, since their rates are likely to be variable and may be lower than the fixed-rate loans, depending on the prime rate.

However, many students may not qualify for the best rates since they will be reserved for those with excellent credit. Students may apply with a creditworthy co-borrower and be eligible for reduced interest rates. On the plus side, these private student loans are available to pretty much anyone who meets the minimum credit expectation, so more students can get loans to help pay for their advanced degrees.

The current college loan is a mixed bag

Interest rates and the federal student loan program are what they are, but it’s fair to assume that we haven’t heard the last of things when it comes to changes. For now, it seems there isn’t any push to actually reduce the amount of money available for students to borrow, but it will be more expensive to borrow it. With student debt levels already a problem, the prospect of even more debt may preclude some aspiring students from going to college. Planning proactively to keep your college costs down and to secure a good college loan is more important than ever!