My boyfriend and I have been shopping for college loans, and we've been hearing about changes in the rules. Can you give us some guidelines on what to look for?

From: Sonya C.

When it comes to paying for college, students and their parents can count on ponying up more money starting on July 1, when a sweeping new law brings in several changes in student loan regulations. What’s the reason? Well, what with tax cuts plus expenses like Hurricane Katrina, the federal deficit has been going crazy. So Congress went looking to save like $40 billion. Their ideas on how to save the money included taking back almost $13 billion in subsidies from lenders who deal in student loans. (Did you know that lenders get paid twice, once by the student borrower and again by the feds? Well, they have and they do and they will, at least for a while.)

Naturally, the expense is getting passed on to students in the form of higher interest rates and so on. There are a couple good breaks coming too, but first the bad news, starting with STAFFORD LOANS, the government-issued basic currency of financial aid. Stafford interest rates are now recalculated every July: If you’re in school, you’re paying 4.7%; out of school, you’re at 5.3%.

This July, Stafford Loans go up to 6.8% fixed interest. It’s not the end of the world, of course. But if you’re still in school and you love a good deal, you might want to lump your current loans in together and CONSOLIDATE before the new rules hit. That might get you a fixed interest rate under 5%—a real advantage in the long run. Get a move on, though. After July 1, you won’t be allowed to consolidate until after graduation.

PLUS LOANS, the equivalent of Stafford Loans, except that they cost more and they’re borrowed directly by parents, are also getting more expensive. Where they had carried a variable rate of 6.1%, now they’ll be fixed at 8.5%.

So that’s the bad news. What’s the good news?

There’s a bit more action in the area of GRANTS. In addition to Pell Grants, the old standby for students who have greater financial need, the new law creates merit-based grants for students who major in engineering and math and science and some other pursuits deemed to useful in the war on terror. Price of admission: Study the stuff and keep up a 3.0 grade average. How much money are we talking about? Freshmen: $750; sophomores, $1300; seniors and juniors, $4,000.

Also, come July, you’ll be able to BORROW MORE. Kind of a mixed blessing, but what can you do? Freshmen will have access to $3,500 (up from $2,625). The sophomore limit goes up to $4,500 (from $3,500). Juniors and seniors keep the old limit of $5,500, but for graduate students the amount goes up to $12,000 (from $10,000). And starting in July, graduate students can also borrow PLUS Loans—a recipe for big debt, to be sure, since these higher-interest loans come due the same time as the Staffords.

Word to the wise: If your education is costing enough to get you into more than one kind of debt all at the same time, do try to make sure you’re studying something that offers you a way to pay back the money. We’re just saying.

One favorable thing: Origination fees, which you now pay on your Stafford Loans—another way to sweeten the loan for the lender—will start to drop in July. By 2010, they’ll be history.

I am committed to paying off my credit cards ($25,000 worth). Here's my question - should I take a loan out from my 401k - at an 8.25% interest rate, to pay down a credit card with an 11.99% interest rate? On paper it looks good, but I know I will be missing out on the amortization of the money in my 401k. On the other hand, I would be paying myself back, and not the credit card company. Is this a smart move?

From: Working Hard

Congratulations on taking steps to pay down your credit card debt. However, we do not think it's a smart move to borrow from your 401(k). You're a smart cookie because you've pointed out yourself that the 8.25% interest rate isn't the true cost. You're also going to be losing the interest you'd be earning on the 401(k) if you didn't touch the funds. Plus, if you leave or lose your job, you might have to repay the whole amount borrowed within three months. And if you can't do it, you'll owe income tax on what you borrowed, plus a 10 percent penalty if you're under 59-1/2. We think that's a very risky proposition.

A really cheap way to pay off credit card debt is to transfer balances to 0% APR cards. But you have to really read the fine print and make sure you make the payments required and follow their rules to get the attractive interest rate. Be over-cautious. If they say it only lasts 12 months, be prepared to transfer again or pay off the balance in 11 months. You can try applying for the Chase Platinum Card, which offers 0% APR for balance transfers and purchases for 12 months (regular APR is 10.99%) with no annual fee. You've got to have pretty good credit, though. Click the link to apply online: http://www.ncsreporting.com/LinkTrack/Redirect.asp?LinkID=CHP121760.

The smartest way to pay off your credit card debt is to bite the bullet. Track your expenses diligently for a month and see where you can make adjustments. Then start paying down your debt aggressively, starting with the highest interest rate card. (It sounds like you only have one, so just keeping paying that back.) To have a chance of making a dent in the debt, you've got to double, triple, even quadruple your minimum payment. Pay as much as you can each month so that the payment is being applied to eat away at your principal debt and not just to keep up with the finance charges. Good luck!

I missed work because of two family emergencies right before Christmas. Now I have bills due and no money to pay them. Do I pay them late & deal with late fees, or do I write checks that will bounce and have to pay those fees? Please help!

From: stressed

Dear Stressed,

We're sorry to hear about your emergencies and we hope everything turned out okay. We suggest that you get on the phone right away and call your creditors. Tell them the situation and let them know that you will be paying the bills but you'll have to be a little late. Remember that you're their customer. They'd prefer to have you stick around with them a long time so they can make as much money off you as they can. So it's in their best interests to work with you, especially if you've had a history as a paying customer who hasn't given them trouble.

But you must be firm when you speak with them. If you don't get any joy from the first representative you talk to, ask for the supervisor. Ask for what you want. Remind them of your history with them as a customer. And suggest a payment plan. Then stick to it.

DON'T overcommit. If you don't think you can make a payment by next week, don't say you will. If you haven't stuck to your payment plan and you have to call them again, they'll find it more difficult to believe you again.

And finally, DO NOT WRITE CHECKS YOU KNOW ARE GOING TO BOUNCE! It's against the law in most states. Plus you'll end up having the bounced-check fees AND the late fees, and your lenders will be less likely to work things out with you. Most lenders understand that emergencies happen, and they can be sympathetic if you come up with a payment plan that works for you and them. Good luck!

I am in a lot of debt and have got to get out of it. I'm cutting up my credit cards and starting over. But, do I cancel the card once it's paid off or leave them open? I've heard conflicting stories.

Thanks.

From: Totally in Debt and Sick of It

Hi Totally,

First, how cool that you got out the scissors! Congratulations on a fierce move. Now, here's the lowdown on canceling the cards. Don't do it yet. Just pay them off. When your records show that you're down to a zero balance, CALL the card holder and make sure you're all paid up -- no freaky unseen fees or something coming your way. When they agree you're paid in full, THEN tell them to close your account.

Why not just close the accounts now? You're being careful to protect your credit rating. If you close an account you're a long way from paying off, you could be leaving the impression that you couldn't manage the credit. To be extra careful, make a paper trail of this process. When you close the account by phone, ask the representative for his or her name... and note the day and time you spoke. Then sit down and WRITE a letter to the credit company, restating your instructions, including the rep's name and so on. Send the letter -- and keep a copy. Hope this helps, and good luck on your money journey!

I am a single mom of twins that are Seniors.I travel for work. I have no extended family. I find time is my enemy. I cannot seem to get everything done and keep track of my money and paperwork. I am feeling overwhelmed and disorganized because I AM !!!! I am so tired at the end of the day and have to run to a football game, etc that I am not getting everything done that I should. Now that finances are getting tight due to extra expenses I have to get a grip on it . I have no idea how I got this disorganized. Am I alone? Judy

From: Judy Davis

Wow! We got exhausted just reading your question! In all seriousness, you are NOT alone. One of our founders, Julia, is the mother of twin 6-year-olds. And you just have to look around you to see that we all seem to be in a mad race against time. We have several suggestions:

1. Breathe. You can always make more money but you can't make more time.

2. Give yourself some credit. Don't "should" on yourself. There's no Accountant in the Sky keeping a ledger of what you should and shouldn't be doing.

3. Let your goals, not your to-do list, run your life. Decide what you WANT to do (and not what you think you should do) towards getting things in order. Then take baby steps towards your goals: Set small easily reachable tasks towards organizing your life and finances. Aim for progress, not perfection. By the end of the week, month, year, hopefully, organization should have snuck up on you. You might want to browse your local library for a good book on goal-setting and restoring balance in your life. Treat yourself to some time to read!

And drop into the MoneyPants Lounge (http://moneypants.infopop.cc/eve?cdra=Y&s=1020085852) to meet fellow members who are making their way through life and finances. It'll help you feel less alone and you might pick up a few tips.