LJWorld.com

If you've got a high school senior about to put in applications for college, you won't be surprised by the latest news about college costs.

In its annual look at college pricing, the College Board reported that the average cost of tuition and fees is up 6.3 percent at four-year public colleges, and 5.9 percent at four-year private colleges. Prices have risen 35 percent from five years ago, after adjusting for inflation.

The College Board reports it is taking longer for students to graduate, and part of the reason is cost.

Let's say your child doesn't get a full scholarship or grants. How will you pay for his or her college education?

Federal loans, you say.

Did you know the maximum limit for the main federal loan program is $23,000? (By the way, that limit has not changed since 1992.)

That cap is a big contributor to the huge increase in private student lending, says Mark Kantrowitz, publisher of FinAid.org, which is one of the most useful Web sites on this issue.

In the case of a Stafford loan, students taking out new loans can borrow at a fixed rate of 6.8 percent. In the case of a subsidized Stafford loan - awarded on the basis of financial need - the government pays the interest while the student is enrolled in school.

With an unsubsidized Stafford loan, the student is responsible for the interest payments. Interest on unsubsidized loans begins accruing immediately, unless you decide to defer the payments until after graduation. All students, regardless of need, are eligible for the unsubsidized Stafford loan.

Starting in July 2007, the total yearly limit a dependent undergraduate student can borrow in unsubsidized or subsidized Stafford loans is:

¢ $3,500 if you're a freshman, up from the current limit of $2,625.

¢ $4,500 if you're a sophomore, up from $3,500.

¢ $5,500 if you're a junior or senior.

Students who are declared independent (i.e., financially responsible for themselves) or whose parents have been turned down for a PLUS loan - a parent loan for undergraduate students sponsored by the government - have higher limits.

So my advice, as you are sitting down with your child now to consider his or her college choices for next year, is take into account how much you may be forced to borrow and how long your child will take to graduate. Factoring in those two things might (and really should) dictate where your child applies for college.