It’s no secret – the cost for a college education is staggering. Even the expenses to attend the least expensive colleges can create crippling debt for attendees. It’s especially costly to those who don’t qualify for grant programs or scholarships. The current state of education begs the question – are student loans becoming necessary for anyone going to college?

Parents of most traditional college students make too much money to qualify for needs-based, free financial aid. Very few students qualify for the limited merit-based scholarships. Even among those that do qualify, fierce competition means that there are no guarantees. Enter the student loan. Due to the rising costs of a college, student loans are becoming a necessary evil when it comes to paying for a post-secondary education.

There are two types of loans that most college students use to fund their education: federal student loans and private student loans. Each type of loan has advantages and disadvantages.

Federal Student Loans

There are three types of student loans: Subsidized, Unsubsidized, and Direct PLUS loans.

Subsidized Student Loans

Subsidized Student Loans are loans in which the interest is deferred until graduation or you stop being a qualifying student. You are responsible for repaying the loan upon graduation. However, the interest on these loans doesn’t begin to accrue until you begin repayment six months after graduation or you stop being at least a half-time student. You must qualify based on your income to receive a Subsidized Student Loan. Dependent and independent students may borrow between $3,500 and $5,500 annually (depending on their year in school).

Unsubsidized Student Loans

Unsubsidized Student Loans are not needs based. You must be a student enrolled at least half time to receive an Unsubsidized Student Loan. The interest on these loans begins to accrue immediately. This means they can add up over time. Repayment begins six months after graduation upon leaving school or dropping below half-time status. Dependent students may borrow between $5,500 and $7,500 annually (depending on their year in school). Independent students may borrow between $9,500 and $12,500 annually (varies based on year in school). Graduate or professional students may borrow up to $20,500 annually.

Direct PLUS Loans

Direct PLUS Loans are loans for professional students and the parents of undergraduate students. The largest amount that you can borrow is the cost of attendance minus any financial aid awards the student has already received. The borrower also must not have an adverse credit history. For Parent PLUS Loans, the repayment begins after the loan is fully disbursed, but borrowers may request a deferment, allowing payments to begin six months after graduation, or when your child leaves school or drops below half-time enrollment. Graduate students automatically begin repayment six months after graduation, upon leaving school or dropping below half-time status.

Private Student Loans

You may opt to go the route of private student loans rather than relying upon federal financial aid for your funding. You receive approval for these loans based on your credit, not your need. Additionally, you must use these loans for educational purposes only.  With these loans, be sure to read the fine print. Different companies offer varying conditions and perks. Take the time to compare prices and options before taking out a private student loan. You should only do this as a last resort.

Student loans are often the only resource available to help cover housing, meal plans, travel, and other expenses not typically covered by scholarships or grants. Of course, one way to keep your student loans to a minimum is to plan ahead. Start a college savings account. Research in-state public colleges. Even starting at your local community college can keep tuition and fees lower. A college education should help you rise to the top and not leave you drowning in student loan debt.