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Start with the feds: The first step to getting federal loans: Fill out the Free Application for Federal Student Aid. All full-time students who complete a FAFSA can borrow at least $5,500 a year through the Stafford student loan program. Students whose parents have bad credit can get Stafford loans of up to $9,500 to $12,500, depending on their year in college.

Staffords for the fall of 2009 will charge no more than 6.8 percent a year in interest plus a 1.5 percent upfront fee, for an average annual rate of 7.1 percent. Students who qualify as needy may be able to get Staffords that charge no interest at all while they are in school and just 5.6 percent after graduation.

About two thirds of colleges allow students to shop around for the best Stafford deal instead of funneling loan applications directly to the federal government. The credit crunch has eliminated most of the good deals common in previous years. But a few lenders are still offering small sweeteners. Many nonprofit lenders, such as the College Foundation of North Carolina, and some for-profit companies, such as Discover, waive most or all of the upfront fees and knock a fraction off the annual rate for automatic payments. Those kinds of discounts typically save borrowers several hundred dollars over the life of the loan.

At an effective rate of 7.1 percent, when the prime rate is just above 3 percent, Staffords might look expensive. But they offer many unique benefits, such as new forgiveness programs for public servants and an income-based repayment plan that will allow debtors to cap their payments below 15 percent of their income.

Parents can tap education loans that cover the student's entire cost of college (less any other financial aid) through the federalPLUS program. PLUS loans aren't cheap, unfortunately. They can cost as much as 8.5 percent a year plus a fee of 4 percent of the loan amount, for a total annual rate of as much as 9.4 percent. But shopping around can reap a few discounts. Those who borrow directly from the federal government and make automatic electronic payments are charged just 7.65 percent in interest, for example. (After fees, the APR totals 8.55 percent.) And there are other benefits: While PLUS applications do require a credit check, the standard is comparatively forgiving, even OK'ing parents who are a little behind on their mortgages. Also, PLUS loans allow parents to defer payments until the student is out of school (though the interest does keep building up.)

Ask your school: Traci Smith was heartbroken last summer when she got turned down for a federal loan. When she called to alert the school's aid office, however, the officer told her the school had just started joined a growing number of colleges making loans to recession-strapped parents like her.

Redlands lent the Smiths the last $3,200 they needed to pay their bill. Now, Rhea is hard at work studying to become a music teacher. "Without that loan, I would have had to change my aims and profession" since her local community college doesn't have many music education courses, says Rhea. "That loan saved me."

Many schools also offer Perkins loans, which are federally backed loans for needy students that charge no interest while students are in school and just 5 percent after they leave. Unfortunately, colleges have a limited amount of Perkins money and so can't always award these loans to everyone who qualifies.

While many school loans are good deals, Lauren Asher, acting president of the Institute for College Access and Success, warns that students shouldn't automatically accept all loans they are offered. "Just because the loan has the school's name on it doesn't mean it is the best you can do," she says.

Alternatives: Some charities and new Web companies are giving students a chance to borrow at no or low interest.GreenNote offers would-be borrowers the ability to send out electronic appeals for private student loans. Virgin money offers the Student Payback contract. The parents pay the cost. In return, Virgin Money withdraws from the student's checking account a monthly payment that will eventually pay back the parents everything plus minimal interest. Virgin Money makes the transaction easy and unemotional by turning her family debt into the same kind of payment as a utility bill.

-- U.S. News and World Report "I don't have to think about it," she said.

Other companies, such as Private lenders: The credit crunch has wiped out most of the private, alternative (also sometimes called "signature") educational loans. But students who can find a U.S. citizen with good credit (a FICO score of at least 700 is generally required) to guarantee payments can usually find a bank willing to lend them at least a little money. Financial experts suggest private loans be considered only as a last-ditch alternative, however, as they can be onerous. "It used to be that anyone with a pulse could get a loan," says Greg McBride, an analyst for Bankrate.com. "Now you've got to jump through more hoops than a circus act."

Some private loans, such as Sallie Mae's new "Smart Option," require payments to start almost immediately--while the student is in school.

Private loans can also be expensive. A few nonprofits, such as the Rhode Island Student Loan Authority, are offering fixed rates below 8 percent. But most for-profit lenders were offering only variable rates in late spring 2009. Their rates ranged from a tick below prime (which was about 3 percent) to 14 percentage points above the London interbank rate (Libor), which was hovering around 1 percent. Those with good credit will very likely be offered cheap-sounding rates as low as 4 percent, but "the rates will only go up from here," warns Tim Ranzetta, president of Student Lending Analytics. "When the economy gets back on its feet, the rates could be 3 to 4 percent higher than they are today," which could ratchet payments up by hundreds of dollars a year, Ranzetta says.

Ranzetta warns that shopping for an affordable private loan smartly requires a lot of work in a short time. Lenders typically don't reveal the rate they'll charge you until you've completed a lengthy application, so smart shoppers have to fill out several applications. Credit rating agencies will allow borrowers only 30 days of shopping for a loan before dinging credit scores, he says. And borrowers concerned about their jobs would be wise to read the fine print in each loan document about the fees for deferring payments if they get into financial trouble, Ranzetta advises. Bankruptcy courts generally refuse to discharge educational debts (unlike, say, credit card debts), so borrowers have little choice but to pay all interest and fees on educational debts.

As troublesome and expensive as private loans are, however, they are not the most expensive way to raise cash for college, says Bankrate's McBride. Many credit cards actually charge more than private loans. And cashing out a retirement account can be even more expensive because of tax penalties.

If it's the only way to make it through college, borrowing a few thousand dollars a year at a reasonable interest rate is generally rated a good investment. After all, the typical college graduate grossed almost $4,000 a month last year. Those who didn't go to college earned about $2,400. That difference of $1,600 a month won't make up for really big debts, though, and isn't guaranteed. Some college graduates, especially those entering the job market during the current recession, might have to get by on less and thus won't have much extra to divert to loan payments.