How will you pay for college?

Increasingly, families are turning to private lenders for help.

A four-year private education now tops our at $180,000.

Tuition at colleges and universities keeps rising while financial aid dwindles. Today, loans are the only way many students can bridge the gap. However, even borrowing money has become more difficult since Congress cut out $12.7 billion from government-sponsored student loan programs last year.

The result: More families now are relying on private lenders, some of whom may not always provide the best terms. (A few of them have even come under fire for alleged improper practices.) Private lending now accounts for 20% of all student loans, up from 5% just a decade ago. Newly empowered Congressional Democrats have vowed to ease this burden in the future, but for families dealing with aid right now, here are several points to keep in mind.

Rely on PLUS loans as much as you can. Unlike student loans, which are capped at a total of $20,000 (for Perkins) or $23,000 (for Stafford) for an undergraduate education, the government's Parent Loans for Undergraduate Students (PLUS) do not have caps. That means your family can borrow as much money as your student needs at the government's reduced rate without having to turn to private lenders. (To preserve your own savings -- particularly future retirement savings, you always can ask your student to pay you back gradually, once he has entered the workforce on a full-time basis.)

Check the student loan market carefully. True, some private lenders are offering great deals to compete for student-aid business, but finding them takes shopping savvy. Federal law prohibits colleges from requiring that students use a specific lender. Many schools strongly suggest you use an institution from their list of preferred lenders, but don't assume that just because your college recommends a particular institution that it will offer the best deal. Check the college's list carefully, then compare the loan terms -- including any fees and interest rates charged over the course of the loan -- to those of other lenders and government programs. You can find a complete listing of college aid institutions online at FinAid.org, a financial planning site that doesn't have any ties to specific lenders.

Co-sign a private student loan. If you have a good credit score, then your child is likely to get a better rate if you co-sign the loan than she'd get on her own, says Mark Kantrowitz, publisher of FinAid.org. But don't apply for multiple loans, an action that could lower your credit score, he says.

Contributing Editor Walecia Konrad is an award-winning consumer reporter.