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New Feature: Ask The Experts

Monday, 22 Dec 2008 | 5:15 PM ET

Beginning today, I’m excited to tell you about the launch of a new feature here on the OTM site. I will be joining up with the experts from our Money Desk to field your questions online. All you have to do is email us at CARMEN@CNBC.COM with your question – and if you have a specific expert who you’d like to respond, (say you have a question about your credit score for John Ulzheimer), just put their name in the subject line. We’ll be posting a new Q&A each day and I’ll be here at “Ask the Expert” at least once a week. Looking forward to hearing from you!

Here’s our kick-off Q & A:

Hey Carmen,

My Dad and I watch your show all the time, and we love it! I'm sure you get these types of questions all the time, but I'm just starting out and I don't have much knowledge on the subject. I'm really concerned with the amount of money it looks like I'm going to have to spend on school in the next few years. I'm in my junior year of college, and my parents have managed to muster up the money so far, and they have paid the whole four years in full. However, soon I'll be admitted into graduate school which indefinitely entails another 3-4 years of schooling. What is the smartest way to go about getting loans? Which ones are even out there, and what's the difference between them? I just need some really good advice on how to go about everything since it will all be in my name. If you could help me out and give me some advice my family and I would be greatly appreciative! Thanks so much for taking the time to read this! --Michelle P.


Hello Michelle!

Take heart in knowing that I pulled through graduate school on my own dime and though I had to take on huge student loans, the pay off was worth every penny.

The key is to make sure to get the right students loans – it’s vital to know the difference between good student loans and bad ones. Just like in undergrad, the best loans to take out are low-fixed-rate public student loans. But before you borrow, look into getting some no-strings-attached money first. Make sure you fill out your FAFSA form (free application for federal student aid) to qualify for federal need-based grants and loans and scour Students.gov for info and links on grant programs for graduate school. Nothing is better than a grant—awarded money that you don’t have to pay back. When it comes to borrowing, stay ‘public’ as much as possible, such as applying for Federal Perkins Loans through your financial aid office and Stafford Loans. These loans are more flexible. For example, you can defer them or file for forbearance if you are unable to work or go back to school, and have low fixed interest rates below 7%. Your lenders of last resort are private lenders such as banks that work with your school and credit cards. Try to avoid these loans but if you do have to take on a private loan, don’t just go with whom your school offers up. Shop around at sites like Bankrate.com and Interest.com and look into FDIC insured web-based banks as they offer some of the lowest rates around.

When you graduate, look into consolidating your private loans into public ones and stay away from racking up credit card debt. Work part-time to bring in cash. Paying for grad school can be done and can pay off – just do it right!