The interest rate is 6.8 percent on loans the government doesn't subsidize, and 4.5 percent on new subsidized loans starting July. Stafford borrowers can receive up to $5,500 for their freshman year, rising up to $7,500 the senior year.
If federal student loans don't cut it, parents can take out a PLUS loan to cover any shortfall.
"Federal loans have so many built-in advantages," Ranzetta says. A parent with a financial setback can defer payments on PLUS, but a private lender may not give them that option, he says.
Private education loans, which have fluctuating rates and less generous repayment options, should be the last resort — or second to the last.
"The only thing they are better than is credit cards," Kantrowitz says. He suggests families are better off taking out a fixed-rate home equity loan than a private education loan.
Parents also must have good credit scores to qualify for a private education loan, while students will likely need a co-signer.
Even more changes to the federal loan program are in the works, though a few years away.
Right now, graduates with low pay compared to their debt burden can opt for an income-based repayment plan. Payments never exceed 15 percent of discretionary income and can be zero if a paycheck is meager enough. After 25 years of making payments, any remaining balance is erased.
But beginning with loans made July 2014, payments under this plan won't exceed 10 percent of discretionary income. And balances can be wiped out after 20 years of payments.