(MONEY Magazine) -- In a world of fee hikes and financial assist shortages, this is what passes for great news: Families who contingency steal for college have a flourishing number of low-cost alternatives to sovereign loans.
That's particularly wannabe since that the last-minute cut in this year's subsidized Stafford rates to 3.4% helps usually students with financial "need" -- the who do not validate are still stranded profitable 6.8% (plus 1% in fees).
Among their other options: For-profit lenders such as Sallie Mae and Wells Fargo are selling primogenitor loans at prearranged rates as low as 5.5%.
SoFi, a San Francisco startup, has swayed alumni at more than 3 dozen colleges to lend to students at rates starting around 6%.
Plus, a few charities, states, and colleges are creation lower-rate loans, in some cases as low as 0%.
Where to find low-rate loans
Unfortunately, there's no middle clearinghouse. Check out overturemarketplace.com and simpletuition.com for in isolation loans from for-profits and credit unions, but hang to fixed-rate options. (While you can obtain variable-rate loans as low as 2.25%, the rates are expected to way up at some point.)
For state, charity, school, and startup programs, start with these lists of low-interest tyro loans and 0% tyro loans .
Students should moreover inquire their school's assist office, together with residents organizations similar to Rotary clubs and eremite institutions.
How to make the correct selection
Apply for sovereign loans initial so you have that option in your pocket, advises Heather Jarvis, a student-loan attorney.
If you're fortunate sufficient to win a cheaper loan, read the excellent print. Bargain loans might need borrowers to max out sovereign tyro loans first, have co-signers, or make payments during school.
Also, import the rate against the benefits of the sovereign loan.
You might find the Stafford's income-based settlement and public-service pardon options are value profitable for. Finally, do not use inexpensive loans as an forgive to overborrow: Students should keep complete college debt next their expected first-year salary.