Where to find money

Federal student loans. With all the discussion of federal student loan burdens, you might think this is the only way to pay for college. Actually, a dependent child can get only $5,500 in student loans in her freshman year. Those loans will either be subsidized (no interest accrues until graduation) or unsubsidized (accruing interest from the start). But a federal student loan is a drop in the bucket compared to the potential costs of college. The current rate for the life of the loan is 3.73%.

Parental PLUS loans. These are the most expensive loans because the rate is 6.28% for the life of the loan, and there are distribution fees of 4.2% deducted from each loan. Yet many parents turn to them first because they are so well publicized.

Private student loans. Dependent students require a parent to cosign, and these loans typically carry higher rates than federal loans. Also, unlike federal student loans, private loans do not have “relief ” provisions such as forbearance or income-based repayment. To search for private student loans, go to studentloanhero.com to get loan offers from multiple lenders. Depending on credit scores, rates may be as high as 11%!

Home equity loans. Rates are high, and these tend to be adjustable-rate loans, meaning they can be costly in a period of rising rates. Also, interest payments on money withdrawn to pay for college are not deductible.

What else can you do?

Dodds suggests contacting the college — but not the admissions office. Instead, contact the financial aid office. They often give out merit aid — subsidies designed to get your child into their freshman class, regardless of traditional aid limits.

Dodds also recommends talking to your high school college counselor to see what schools are still accepting students and offering financial aid.

Many counselors use the website of the college counseling association, NACACnet. org, which maintains a database of colleges still searching to fill their freshman class.

As a last resort, the student could live at home and attend a community college for a year or two, making sure class credit is transferable, then transfer to a preferred school. That’s a growing trend.

There’s no doubt that college is worth the investment — but it might not be worth the high-rate debt to pay for it. And that’s The Savage Truth.