Many families turn to private sources when their children’s college costs are more than they can afford after the school’s financial aid package arrives in the mail. Often, families look to private loans to make ends meet. Unfortunately, these loans are less regulated than their federal counterparts like Stafford or PLUS loans. A student applying to a community college or a smaller, regional private college may find that student loans originating from even the largest banks have interest rates or points that vary based on the school they choose to attend. Last week, a Courier Times article discussed a paper by the Student Borrower Protection Center that showed students who borrowed money from some of the largest national lenders, like Wells Fargo, charged significantly more for loans they wrote for some students than others. For instance, students attending Howard University in Washington, D.C. were changed almost $3,500 more than students attending New York University for an identical 5-year loan. Or a student attending the Borough of Manhattan Community College may be charged nearly double the interest on the same loan written for a student attending nearby City College of New York. Thus, students looking to save money by attending less expensive schools like community colleges may find their actual savings are significantly reduced. If you’ve recently received a financial aid package that exceeds your budget, what can you do to avoid this problem? If your child is a high-school senior, make sure their college choice takes finances into account. Many times, equivalent schools offer far different net prices. Take emotions out of the decision: Is it really worth attending Prestigious U instead of Other U and pay $20,000 to $80,000 more over 4 years? Apply for outside scholarships. Thousands of dollars are up for grabs in local, regional and national scholarship money, especially for freshmen. Consider other sources of financing. If you have equity in your home, consider a home equity loan. while the interest is no longer deductible they're still less expensive than PLUS or private-bank student loans. Do NOT use your IRA or 401-K savings! You’ll pay a 10% penalty for withdrawing funds early and the proceeds will be considered untaxed income on future financial aid forms. More importantly, you should not jeopardize your retirement to pay for your children’s education. Choosing which college to attend can be a stress-filled, emotional experience. A one-hour consultation with an unbiased professional can often help families make the right college choice!