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In Degrees of Debt, Part 1, we talked about student loans and how difficult it can be to pay them back. Getting a quality education has never been more important than it is today. But at the same time, the cost of education has never been so high. Student loans may be the last resort to paying for those unexpected high college expenses, not only for students but for parents.

As we discussed briefly in Part 1, there are some precautions you can take. There are federal loans and government student loans. The U.S. Department of Education’s Direct Loan Program is the largest resource in providing funding for post-secondary education. As a lender, it has set the terms of its loans, eligibility requirements, and repayment options.

Although there are many private funding sources available, government student loans offer low interest rate options, and you can apply for them online. Securing and managing these loans are simple and convenient. When it comes time to pay, you will be given a considerable amount of flexibility. In order to apply for government funded loans you must fill out the FAFSA and have them turned in by certain deadlines. That determines what type of loans you are eligible for and the amount of money you may be able to receive.

Borrowing from lenders such as Sallie Mae is also a good idea when considering student loans. They have fixed low interest rates, which means you won’t have to worry about inflating rates when you graduate and it’s time for repayment. You may be able to choose whether you pay now or later – you can choose to pay off your debt while still in school or you may be able to arrange payments for when you graduate. (For some people the second option is more appealing. They figure when they graduate, they will have a job where their salary will allow for them to make their payments easier.) I found that rates with most private lenders are anywhere from 3% to 10%. Those rates are really good considering that this is unsecured debt. Many lenders offer small discounts on interest rates if you agree to certain terms such as setting up automatic bill payments.

Borrowing 100% of your educational costs is a great thing now, but after graduation it may seem overwhelming! Make sure, when borrowing student loans, to borrow only what you need. This means that before you fill out loan applications you should know exactly how much money you need to borrow. Borrowing in excess may lead to excess stress post-graduation. Each school also has a numeric code that tells you exactly how much the cost of attendance is. This automatically puts a cap on the amount you can borrow each year.

Now, how should you pay off those loans? There are many options. Talk to lenders about consolidating your loans to make payments more manageable. Make extra payments, even if it’s only $20 more than what your regular payment is. You won’t even miss that $20. It will take your balance down and you will pay those loans off sooner. You can also check into loan forgiveness programs. Find out if you qualify for loan forgiveness or repayment assistance. For example, the state of Maryland offers loan repayment assistance for lawyers, nurses, therapists, teachers, and social workers who work with low-income or underserved areas of the state.

Another option is to start bringing in additional income by taking on a second job. Asking your current employer for help may also be an option. Talk to your personnel department to learn if your employer provides any benefits for employees with student loans. Ask your boss for a raise but be prepared to provide evidence of why you deserve one.

If you’re careful when considering student loans, you can make smart decisions when deciding how much to borrow. Look into other options such as scholarships, grants, and educational assistance programs from your work. One very, very important thing is to finish your degree! Make all that money, time and effort worth it!