Fewer things are more daunting in life than paying for a college education.

With high unemployment and tuition costs rising faster than inflation, more families are turning to private lenders when federal loans don’t cover all the expenses.

Experts agree private loans should be a last resort to pay for schooling. Mark Kantrowitz, publisher of FinAid.org and Fastweb.com, said students should always borrow from the federal government first, since they are cheaper with more options, better repayment terms and fixed interest rates.

Here are six things to keep in mind when considering getting a private loan to pay for high education.

Determine How Much You Need 

Al Alper, president of People Capital, says the first thing families need to do is determine exactly what much aid is needed.

He advises to be conservative in your wants, and borrow only the necessary amount.

“Private student loans are a terrific option to provide access to an education you would not otherwise have, but, like any financial decision they have long-term effects on your lifestyle, and the amount you have to repay will determine what other items you may be able to afford,” Alper says.

Consider All Monetary Options

Students should exhaust all options with their schools financial aid office by way of grants, scholarships and federal money available to them before looking into private loans. 

Private student loans are your second line of financial consideration, while your first-line financing should be consulting with the schools financial aid office for government loans, scholarships, grants, etc, advises Alper.  

Shop Around

Start your private-loan shopping at your local bank or the one your family frequents.

“Private student loans are sometimes difficult to obtain, and may be very costly in the end,” says Alper. “Shop around, starting with the institutions where you bank most frequently. Relationships mean everything and loan officers have much leeway in the decision process. If the students or their parents have a banking relationship, this should be your first stop.”

Private loans have different rates and payment options. And according to Alper, private student loans offer access to larger sums of money to finance a students’ education, and it is vital to view all of your options before taking on a loan. 

Shopping around will allow you to better understand the rules and regulations for your specific loans, and in turn, avoid costly payments and fees.

Compare Fees 

According to Kantrowitz, the costs of private loans are high due to interest rates, fees, interest accruing during extended periods of nonpayment, late fees, fees for a forbearance and cost of default.

There are various places to find a private student loan, and it’s vital to compare each one to determine what’s right for you.

“Costs vary by institution, but may include application fees, origination fees, late fees, secondary payment fees, etc…” Alper says. “Checking with each institution and comparing them, along with all other costs of financing is your best bet for any form of loans or financing.”

Assess Your Credit….or Lack There Of 

Because they are based on the borrowers’ credit history, private student loan terms may vary considerably from lender to lender. In turn, the obstacles in financing your loans are primarily credit related.

Alper said students with little to no credit history will find funding sources limited and requires students to find a co-borrower with solid credit history.

Students should focus primary on the lowest cost loan. Applying with a cosigner increases your chances of getting the loan with better interest rate.

It is important to know what your credit history before shopping around and consider a co-borrower with a high credit score to help minimize your future costs.  

File an Application

Once you find a loan that best suits your monetary needs, it’s time to fill out an application.

Kantrowitz recommends applying to three or four loans to identify the lowest cost, or lowest interest rate, loans.

“Very few private student loans have up front pricing, so in order to find out how much you'll be charged, you need to apply,” Kantrowitz says.

According to Alper, student loans have a no return policy or grace period on your education, and buyers’ remorse falls squarely on the student. 

“Private student loans are not dischargeable in bankruptcy, so if you don't finish school, are not happy with the education you received, cannot find a job or found a job for less money than you expected, student loans must be repaid,” Alper said.