Now is the time to choose student loans.

Roberta Johnson, director of financial aid, said lenders have been announcing their rates for student loans in the past couple weeks. Overall, Johnson said the rates they have been announcing are lower.

She said most private lenders are tying their rates to either the London Interbank Offered Rate or the prime rate.

“They use that as the threshold, and then they will add a percentage amount on top of that to arrive on the final rate,” Johnson said.

The final rate depends on a person’s credit score.

However, Johnson said her office tries to steer students away from private lenders.

“First of all, we’re trying to help students to stay out of private loans because we don’t want students borrowing as much,” she said.

They encourage them to go after federal money, the reason being that these loans have a fixed interest for life, forgiveness benefits for death or disability and deferment options if students find themselves without a job after graduation, she said.

“Usually students will use the private loans as a last-resort loan,” she said.

If students do decide they need a private loan, Johnson said her office cannot recommend one private company over the other, but can provide information about those lenders. She also said there are a number of factors to consider: interest rates; up-front “origination fees;” reduction in rates if the borrower sets up automatic payment with a checking account; if the loan allows removal of the cosigners if payments are made on time for a certain period; how often interest rates will change; and, if interest rates are accruing, how often they will be capitalized.

Overall, Johnson said they have seen a decrease in the amount of private borrowing by students, due in large part to expansion of available federal money, both to undergraduate and graduate students.

“Because of a variety of factors, we’ve seen the overall amount of borrowing just start to go down, and that’s actually good thing,” she said.

She said her office recommends if students need loans, they should have paperwork in by July 15 so their money is available for their first payment Aug. 20 to Iowa State.