My Comments: Last week on Tuesday my blog reflected the comments of a financial advisor recommended by the editor of InvestmentNews. This person, identified as Betty, suggested Stafford loans as a legitimate source of money to pay for college. Her point was that anything was better than invading your pre-tax retirement funds.

My comment was that student loans are an insidious trap to be avoided at all costs and that finding endowment money, available from virtually every college or university, is the best of all worlds. Lots of money, none of which has to be paid back. But you have to know how to get it; its not offered unless and until you have negotiated a process that is not found on the internet.

This article reinforces my position that every parent of every college bound student has to explore and maximize their understanding of the endowment scholarship process. Click on the image above to watch a short web video on this topic.

(Bloomberg News) — JPMorgan Chase & Co. charges Mirella Tovar as much as 10.25 percent annual interest on her student loans — a rate as high as a credit card.

The 24-year-old aspiring graphic designer, the first in her family to go to college, is among millions of former students paying off high-interest loans to private lenders, among them JPMorgan, SLM Corp. and Discover Financial Services. In a good month, Tovar earns $730 as a part-time hostess in a pizza parlor, and most of that money goes toward her debt of $98,000.

Unlike the federal student-loan program, which lets consumers borrow at fixed rates directly from the government, these loans from at least 30 banks and other private lenders feature mostly variable rates that can be more than twice what some people pay in the U.S. program. With college costs spiraling, the marketing and interest rates of these loans are drawing increasing complaints from borrowers and regulators, who say teenage consumers often don’t understand their terms.

“It was like signing up for iTunes,” said Austin Bousley, 25, who applied on the Internet for a private loan from SLM, known as Sallie Mae, as a student at Suffolk University in Boston. Some of his loans, which he began taking out in 2006, carried rates as high as 9.25 percent. “The interest is accruing and accruing. I have a feeling I’ll be making payments forever.”