Private student loans account for nearly one in every four dollars borrowed for college, according to the Boston-based National Consumer Law Center.

The problem is that private loans are "almost always more expensive than federal loans, especially for borrowers with lower credit scores or limited credit histories," the center said in a March study titled "Paying the Price: The High Cost of Private Student Loans and the Dangers for Student Borrowers."

Private loans don't have the same borrower protections that government loans provide, such as income-based repayment and economic-hardship deferments. Eighty-five percent of the 28 loans studied had origination charges. Their average initial rate was 11.5 percent, and the highest was nearly 19 percent.

"I don't know of any that are fixed-rate," Feitz said, noting that variable rates for home loans contributed to the current mortgage crisis. "Consumers have got to be very careful."

Tuition at Utah public colleges and universities is relatively low, and federal loans can cover most costs, said Steve Sharp, director of financial aid at Utah State University.

Federal loans also can help students headed for private colleges. Joseph Kim, a senior in the math and science academy, has a $40,000 scholarship to Vassar College in New York. He said he still needs to come up with about $5,000 a year to pay for books and living costs.

"I didn't want to be a burden on my parents," Kim said. "I want to be able to do it on my own, with work study and getting loans if I really have to."

Kim likely will have no problem receiving a federal loan, if need be. But some students in the same situation don't even try. Instead, they turn to alternative private loans, which some private lenders say should be considered only after exhausting federal options.

Federal-loan applications

Karen Henriquez, associate director of financial aid and scholarships at the University of Utah, said it's well worth the trouble to apply for a federal student loan.

Private student loans are complex and can be tough for adults, let alone a teenager, to navigate. Interest rates are variable, and lenders might tie them to different criteria and ultimately make the loan look advantageous — in the beginning, Henriquez said.

Feitz said the problem is that a loan at 6 percent interest might end up jumping to 14 percent interest in a few years. Henriquez said students also are borrowing more than they need, saddling them with more debt and potential stress. "They say, 'I can get $5,500 by signing here?' For someone who has not had experience with discretionary money, it's like a bonus."