The role of private student loans in the financing of higher education has grown tremendously in recent years. The volume of private loans has grown by 27% annually since academic year 2000-01 and now totals over $17 billion (each year), representing 20% of all student loans. While such loans can be an important tool for families trying to bridge the gap between college costs and available funds, students and parents should remember to check out federal loans first which often offer better interest rates, opportunities for loan forgiveness, and/or more favorable repayment options.