f you need a loan to help pay for the cost of college, you're in good company. About half of the class of 1998 will incur student-loan debt at an average of $13,600 per student, resulting in monthly payments of $163 for ten years after graduation, according to the Student Loan Marketing Association.

Sobering news? Perhaps, but student loans are, for the most part, a good deal. They're granted at below-market interest rates, require no collateral, and repayment typically doesn't begin until after graduation.

Under the Taxpayer Relief Act of 1997, deductions can be taken for student-loan interest payments made after January 1, 1998. The maximum deductions are phased in over the next four years, increasing from $1,000 in 1998 to $2,500 in 2001.

This deduction is available for joint filers with adjusted gross incomes between $60,000 and $75,000 or less, and single filers with adjusted gross income between $40,000 and $55,000 or less. The deduction on the interest payments is limited to the first 60 months (whether or not consecutive).

A loan qualifies whether the student, a parent or spouse, took it. The deduction belongs to the individual responsible for the loan. A dependent student cannot claim the deduction if he or she is also being claimed as a dependent by another taxpayer during that same taxable year. If the taxpayer is married at the close of the taxable year, the couple must file jointly to take the deduction.

While your loan may come directly from colleges, state governments or private lenders, the federal government is the largest provider.

Start your search with an overview. Visit the National Education Loan Center for additional information. They'll walk you through some of the more typical loan programs.

You'll find that financial need dictates whether you'll qualify for favorable interest rates under a Perkins loan or for a delayed repayment schedule under a Stafford loan. Standards are generally much the same as they are for student aid.

Here are some specifics about the various loan programs available:

The Perkins loan program requires a high degree of financial need and is available to graduates and undergraduates. The program is administered directly through your college, which is the actual lender. Eligibility is determined on the same basis as student aid. To apply, file the Free Application for Federal Student Aid (FAFSA) form with your financial aid office.

A Perkins loan is one of the most advantageous of all loans. Interest rates are only 5 percent. There are no origination fees. Payments don't begin until nine months after graduation or leaving school, and usually extend over a 10-year period. The loan is canceled if you serve in VISTA or the Peace Corps.

The yearly maximum loan under a Perkins is $3,000 for undergraduates and $5,000 for graduates, with a lifetime maximum of $15,000 and $30,000, respectively. But if you attend a college with a good payback rating, the maximum loan can be increased. When choosing a college, don't hesitate to ask the admissions office about past payment rates. Explain that you believe you're eligible for a Perkins. The overall record of the institution can affect the size of your loan.

Unlike the Perkins loan, the Stafford is available to all students. It accounts for more than half of all student-loan programs. For those demonstrating need, payments don't begin until six months after a student leaves school, and no interest accrues until that time. With an unsubsidized loan, interest accrues immediately after the funds are distributed (usually each semester).

Apply as you would for financial aid, by filing a FAFSA form directly with your college. The government runs the online Federal Student Aid Information Center. If you get an unsubsidized Stafford, you can elect to start payments six months after you leave school, but you must pay the interest that has accumulated throughout your school years.

Stafford rates vary and are adjusted each July, but are capped at 8.25 percent. As of July 1998, the rate is tied to the 10-year Treasury bill. In addition to interest, there is an origination fee of 4 percent to 5 percent of the total loan amortized over the life of the loan.

Loan limits as of 1998 are $2,625 for the first year of undergraduate school, increasing yearly to $8,500 for graduate and professional school. There is a lifetime cap of $23,000 and $65,500, respectively.

Prior to obtaining a Stafford loan, you must participate in a loan counseling session that drives home the importance of debt management. If you get the loan, the U.S. Department of Education will make payments to you through your school, usually in two installments a year.

If your school does not participate in the Federal Direct Student Loan Program, banks, credit unions and private lenders offer unsubsidized Staffords. Unfortunately, you may not have the "smorgasbord" of ways to repay.

But, if you pay your bills on time, the student loan consolidation group, Sallie Mae, may buy your loan from the private lender. If your loan is bought and the first four years of payments are made on time, the interest rate is lowered by 2 percentage points on the remaining loan balance. You can save another 0.25 percent by authorizing automatic deductions from your bank account.

If there are two years of on-time payments, Sallie Mae "forgives" the origination fees of more than $250. These steps will allow you to save $386 on a $5,000 loan and up to $7,095 on a $60,000 loan.

PLUS loans, or Parent's Loan to Undergraduate Students, are issued to parents by banks and special lenders. These loans are designed for parents with good credit histories whose dependent children attend school at least half time. PLUS loans are not needs based, and the loan limit equals the cost of attendance minus any aid the student receives. Parents may apply directly to the school or to an independent lender or state guarantee agency.

Interest rates, which are adjusted each July 1, hover around 9 percent in 1998. They track the one-year Treasury bond, with another 3.1 percentage points added (capped at a maximum of 9 percent). There is a 4 percent origination fee. Payments begin 60 days after the last loan disbursement for the academic year, so both interest and principal is paid while at school. The loans are repaid over a 10-year period.

State-guaranteed student loans are available from almost every state, with interest rates of about 8 percent for undergraduates and 12 percent for graduate students. The average state loan is $2,500 for undergraduates and $5,000 for graduates. Apply to banks that administer the state programs. The individual college's financial aid officer will make the ultimate decision on the loan.

The College Board Extra Credit Loan imposes interest based on the 90-day Treasury note, plus 4.5 percentage points, with a 15-year payback term. It also administers the Extra Time Loan at the same rate, payable in 10 years. These loans are applied for on a yearly basis and are best used to help you if your aid is withdrawn or reduced.

Academic Management Services, which is affiliated with 1,500 schools, will foot the tuition bill as long as you pay them back within 10 months. College Resource Center will lend as much as $50,000, but you must begin to pay 2 percent of the outstanding balance per month, in the first month after the loan is approved. There is a 3 percent origination fee and interest comes in at 2.5 percent above prime.

The military offers a great way to save on college. For example, the child or spouse of a veteran who died or was seriously disabled because of military service may be entitled to an education benefit.