Before you sign anything that will cause financial frustration in the future, take CollegeBound's crash course in college cash borrowing and financial aid.

Lesson One: Study Your Loan Lingo Vocabulary
We won't test you, but it's good to be familiar with the following terms, before you attempt the  

loan

  process.

Cost of Attendance - Add up tuition, fees, room, board, books, supplies, and personal expenses, and there you have it.

Expected Family Contribution - That's how much you and your 'rents are expected to pay toward your cost of attendance.

Independent Student - A self-supporting student who is considered financially independent from his or her parents. This is often difficult to prove.

Promissory Note - The document in which you promise to pay back your loans (or sign your future earnings away).

Self-Help - No, not the late-night infomercial kind. This refers to the portion of your aid package made up of student loans and/or work study.

Lesson Two: Know Your Loan Types Need-Based
Federal Perkins Loan: These are the best loans for students since interest rates are quite low (currently 5 percent), however, they aren't easy to come by. The financial aid officers of each college determine which students receive these loans and how much they receive.

Federal Stafford Loan (Subsidized): A government sponsored loan program in which interest rates are low (they vary each year but cannot exceed 8.25 percent); interest doesn't begin to accrue until six months after you leave school (as a graduate or otherwise). Freshman may borrow up to $2,625, sophomores up to $3,500, and up to $5,500 for the remaining years of school.

State Loans: Terms of these loans vary from state to state. If you plan on attending college in another state, you may qualify to apply.

Non-Need Based
Federal Stafford Loan (Unsubsidized): Similar to the subsidized, except interest begins to accrue as soon as the loan is disbursed. Students can choose to make interest payments during college or defer them until six months after they leave school. The maximum amount that can be borrowed is up to $4,000 for the first two years and up to $5,000 each remaining year.

PLUS Loan (Parent Loans for Undergraduate Students): Parents can borrow up to the annual total cost of attendance. New rates are set each July and cannot exceed nine percent. Repayment generally begins 60 days after the loan is disbursed.

Private Loans: Organizations such as SallieMae, Nellie Mae, and P.L.A.T.O. offer private loans. Rates, repayment plans, and borrowing limits vary.

Lesson Three: Research These Loan Links
* www.knowledgefirst.com
* www.bankofamerica.com
* www.key.com/educate
* www.lendingtree.com
* www.nelliemae.com
* www.salliemae.com
* www.studentloan.com
* www.wellsfargo.com

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