8 low-interest student loans

NEW YORK (CNNMoney) -- Falling interest rates are enabling a growing number of companies, state programs, and foundations to offer alternative education loans that are significantly cheaper than some of the federal government's offerings.

Some banks and credit unions, for example, are offering fixed-rate loans (which generally require the student and parent to take joint responsibility) at rates as low as 5.5%. You can shop for these private loans at sites such as custudentloans.org, overturemarketplace.com, simpletuition.com or studentchoice.com.

CNNMoney has identified eight other little-known startups, state programs and foundations that offer bargain loans charging as little as 1%. Some even offer the chance to get as much as 75% of the debt forgiven.

While these loans are less costly than the 7% annual percentage rate charged for unsubsidized federal Stafford loans, benefits such as income-based repayment and student loan forgiveness can make the Stafford a better deal in many circumstances, say experts such as student loan attorney Heather Jarvis. For students who need to borrow more than federal student loans allow, however, these low-cost options present a good alternative to federal parent PLUS loans -- which don't offer such nice post-grad perks and charge a total annual percentage rate of 8.8% with fees.

Of course, even low-interest loans have to be repaid. So Jarvis and other experts warn students to keep their total borrowing—even of bargain loans—below the amount they realistically expect to earn in their first year after graduation.

Low-interest alternative student loans