You sport an unblemished high school GPA, and youre All-State in football, basketball, and badminton. You spent your summers tending to blind orphans in Guatemala and securing peace in the Middle East. Congrats, Doogie Howser, youll get into your dream college!

Now how are you gonna pay for it?

Most of us will foot the bill with student loans"and maybe scholarships and help from our parents. If youre like the average student, expect to graduate with your diploma and a bill for $19,200 in student loan debt. If you continue on to graduate or professional school, the figure will likely grow " big time.

It sounds scary, but dont panic. With the rising costs of college, school loans are nearly inescapable. Even more, the interest rates for educational loans are generously low, and your degree will give you a better shot at making some good money as opposed to skipping college. And you can gradually pay off your college debt over 10 years (or more), making that $19,200 more manageable as you start your career.

Weve put together this school loans guide to help you understand the key elements of financial aid and get the most favorable package of loans, grants, and scholarships to pay your way through college. Learning about financial aid can make your head spin, but its important that youre armed to manage your future debt right from the start. Knowing your options now can save you thousands after graduation. (Even you, Doogie.)

If you dont have the time or patience to read this whole guide " then just check out our Grilling Guide section. It will arm you with the questions you must ask your lenders and school when figuring out how to pay for your education.

For those of you going for an A+ in student loans - lets get started with the basic terms:

Expected Family Contribution " The dollar amount the government thinks you and your family"if youre still a dependent, which most college students are"ought to pay out of pocket each year for your education. Its derived from various factors, mainly your and your parents annual income and assets, household size, and tax returns.

Financial need " The gap between your expected family contribution and the total cost of your college. This disparity is the amount you should be awarded in financial aid in order to cover your education and living costs.

Grace period " A short period of time after graduation"normally 6-9 months"where youre not required to start repaying your student loans. Federal loans are more generous in this regard, whereas private loans may demand that payments start right away.

Repayment schedule " The timeline for paying back your loans. Most common is a 10-year schedule. It will also outline your interest rate, the monthly payment, the principal and interest owed, and payment due dates.

Subsidized loan " A loan where the government pays the interest while youre in school, during your grace period, and if the loan is in deferment. These loans have the most favorable terms, because interest does not accrue while youre in college. It does not apply to private loans.

Unsubsidized loan " A loan where the government does not pay the interest. Youre responsible for the interest from the moment you accept the loan, even while youre still in school. You can pay the interest while youre a student. Otherwise, the interest will be capitalized and added to your principal, increasing the overall balance of the loan.

Now that you have a handle on the language of student loans, lets cover the basic types of aid.

Scholarships are awards for your academic performance, athletic abilities, creative talents, or other characteristics that set you apart. They vary in size and do not have to be repaid.

Grants are typically awarded based on your financial need. They might come from the federal government, your state, or directly from your school. No repayment needed.

Loans, on the other hand, must be repaid. Federal and state loans have far better interest rates and repayment terms than private loans. Lenders cant charge more than a mandated fixed interest rate on new federal loans, a rate set by the government. The rate doesnt change during the life of the loan. Federal loans come in three varieties, usually dependent upon your familys ability to finance your education.

Heres a breakdown of federal loans:

Of the federal loans, Perkins is the best because of the low rate and the subsidized interest. They are reserved mostly for undergraduate and graduate students with the greatest financial need. Perkins is the only loan of the three that can only be administered by your school"not a bank or any other lender"from a limited pool of funds that the government supplies. Therefore, you would pay the loan back directly to the school, not the lender.

Next best are Stafford loans, which can be subsidized or unsubsidized depending on your financial situation. Subsidized is preferable, of course, because the government pays your interest while youre in school.

The caps varied based upon your tax status. If your parents claim you as a dependent, you cant borrow more than $23,000 in Stafford loans during your academic career. Non-dependent students (or those whose parents where denied a PLUS loan) can borrow double that amount, with no more than $23,000 being subsidized. Graduate students cant borrow more than $138,500 cumulative, with no more than $65,500 being subsidized. There are also annual limits that escalate depending upon your year in school.

You can qualify for a Perkins, a subsidized Stafford and an unsubsidized Stafford in the same year. In fact, you want this to happen. The object here is to max out on all of the best loans before looking at alternatives. So if youre eligible for $2,000 in subsidized Stafford loans based on your need and the annual Stafford limit is $3,500, you can borrow $1,500 in an unsubsidized Stafford to make up the difference.

PLUS loans have the least favorable terms among government-backed loans. They are only available to graduate students or parents of undergraduates. They come with a fair bit of flexibility. First, you can borrow up to the total cost of attending school, minus other financial aid. Also, it doesnt matter how much you make or what kind of savings you have. Lenders only look at your credit history"although it doesnt have to be pristine"not your need.

Even if your credit is lousy, you may still be able to get a PLUS loan if you are able to explain to the lender extenuating circumstances that caused the problems. Some lenders may also let you have a friend or a family member cosign for the loan, whether you are a parent or a graduate student.

The interest-rate on PLUS loans is set at 8.5% and just like with the other federal loans, it cannot go above this percentage regardless of which lender you use. These loans are not considered part of your financial-aid package since financial aid only consists of need-based awards.

Repayment on PLUS loans begins 60 days after the lender sends the money to your school. So if the bank hands out the money in August for a freshman starting school, the first payment will come due in October. However, as is the case with the unsubsidized Stafford loan, you can choose to defer the payments by allowing interest to pile up.

If you are an undergraduate student whose parents took out a PLUS loan in order to avoid private loans, be sure to discuss in advance who will be paying off these loans. Technically, the parent is responsible for paying off this loan, but since these lower interest loans can prevent the student from having to take on costlier private loan debt, it may make sense to work out a system where the student pays off the loan or at least helps with the repayment. Better to broach this with your parents beforehand.

Unlike federal loans, private loans often do not have a cap on interest rates or borrowing amounts, and the repayment terms are often less forgiving. Private loan rates can go as high as 18%, and their rate is often variable, which means it changes over time. Theres typically no limit on the dollar amount " and when there is, its as high as $200,000 to $300,000. You can get a private loan from both big banks and random little lenders that youve never heard of that do nothing but student loans.

You dont have to fill out any federal paperwork in order to get these loans. As a result, its sometimes tempting to only get private loans, since you can get them faster than federal loans. This is particularly true when you find yourself short of money at the beginning of a semester, and the tuition bill is past due. But resist this temptation because private loans will hurt your bank account for years.

The weird thing about private loans is that you wont be able to find out what interest rate youll be paying until you actually apply for these loans. The rate and certain fees will typically depend on your credit score and that of your cosigner if you have one. Usually, the cosigner is someone with a longer (and often better) credit score than your own. You really want to try to have a cosigner, since the rate on a private loan is usually based on the better of your two scores.

Finally, if youre unemployed or fall on difficult times after school, its unlikely that a private lender will show much sympathy. With federal loans, you can often defer your payments"which will increase the amount you ultimately pay back"until you get back on your feet. Most private lenders offer no such assistance.

Want to Know More?

• Do You Need Student Loans?
• Advice for Getting the Best Deal on Student Loans
• Grilling Guide: Questions to Ask Lenders and Your School