Pros and Cons of student loans

If you're having trouble tracking down your student loans, your college financial aid office might be able to help. You also can get information about your federal student loans at the National Student Loan Data System, www.nslds.ed.gov.

• Federal Family Education Loan Program loans. These loans are provided by private lenders and are guaranteed by the federal government. Most Stafford loans are FFELP loans.• Federal Direct Student Loan Program loans. These loans are provided by the U.S. government directly to students. For more information, go to www.ed.gov/directloan.

• Private student loans. These loans often are issued by the same lenders that provide FFELP loans, but they're not guaranteed by the federal government. Interest rates on these loans are usually variable. In addition, private lenders aren't required to offer the same repayment options available under the federal student loan program. For information about these loans, contact the lender.How to reduce the amount of interest on your student loans:

• Arrange for automatic withdrawal from a checking or savings account. Most lenders will reduce your interest rate by a quarter of a percentage point if you arrange for automatic withdrawal.• Pay on time. Many lenders offer another rate reduction for borrowers who make a specific number of on-time payments. Some lenders will reduce your rate by up to 1 percentage point.In addition, make sure you take advantage of the tax deduction for student loan interest. Eligible taxpayers can deduct up to $2,500 in student loan interest a year.That is an above-the-line deduction, so you don't have to itemize to claim it.