Student loans have become a necessity for the millions of high school graduates who have decided to attend a college.

With the cost of college tuition rising and the increased amount of competition for limited scholarship funds, the need for student loans has risen. Above all, students can use the student loan process to learn valuable financial lessons in their post-graduate years

Finding a student loan is not difficult, but it can be tedious if you're just starting out. A few basics will help you get through the beginning and help you find the student loan that suits your educational needs and financial situation.

There are federal student loans and private student loans.

Federal student loans are backed by the government, which means that the lending institution is guaranteed to get back the money they lend you from the government. This is why they can offer such low interest rates. Private student loans are not backed by the government and rates are offered based on your credit worthiness. Interest rates are usually higher in these loans.

There are two types of interest rates in student loans: subsidized and unsubsidized.

Subsidized student loans either do not accrue interest while the student is enrolled in school or else that interest is paid by someone else. Either way, you can rest assured knowing that your subsidized student loan is not adding interest to the principal while you are getting your degree.

Unsubsidized loans do accrue interest while the student is enrolled in school. If not paid, the interest will be added to the principal or original balance borrowed, and ultimately increase the amount of the loan and the amount of time it will take to pay it off.  

In order to qualify for a federal loan, students must complete the FAFSA form.

Do this straight away. Find out if the financial aid offices at your schools of interest require that other forms be filled out. Some require that you fill out the College Scholarship Service's profile application. It is free to file a FAFSA form, but the College Scholarship Service's application requires a small fee.

As of 2005, the average cost for four years of in-state college tuition was $41,000, with out-of-state tuition often climbing towards the $60,000 to $80,000 range.

Unless students have parents who are wealthy and willing to pay out such large amounts of money, student loans are important.