It's graduation season at high schools and colleges across the country, and for many, that means student loans are on the brain. Most parents of students fall into one of two camps when it comes to loans—either you need them because your child just graduated high school and is looking toward college come fall or it's finally time to start paying them off now that your graduate has her college diploma in hand.

In either case, things can get a bit confusing. Here are my tips for finding the best loans and then setting a repayment strategy when the time comes:

Make sure you've exhausted other options.
You don't want to be taking out a loan if you can get the money you need through scholarships or grants for free. You may think you make too much money for your student to qualify for financial aid, but there's a good chance you're wrong, so it literally pays to fill out the Free Application for Student Aid (FAFSA) just in case. There's no harm in trying. If it turns out that your finances don't qualify for need-based aid, don't forget to check out money that's given based on merit, says Martha Holler, a spokeswoman at Sallie Mae. The fact is that merit-based aid is one of the fastest-growing components of financial aid, particularly at the state level, and in the last decade, the number or amount of state grants awarded based on merit has increased 250 percent. That means there's a good chance your child can score some free money if she had high grades in high school or participated in extracurricular activities.

Tap into the college.
If your child's already been accepted, maybe even assigned a room in the dorm, head to the school's financial aid office (and these days, that might mean simply logging on to the website) and check out their preferred lender list. This is a list of private lenders that the school recommends, meaning they've been vetted by the financial aid office, and in most cases, the school has also brokered some kind of arrangement so that there are advantages to choosing these companies. But that doesn't mean you're limited to this list, says's Mark Kantrowitz. It's a good starting point, but use your own judgment and don't rely on it entirely. If you don't like what you see, do a search online and see if you can come up with something better. Just be sure to read the fine print before signing on any dotted lines.


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