The credit crunch is hitting the student loan market. And just because your school approved you for a Stafford Loan doesn't mean you'll find a bank to fund it — unless you hurry!

That's the message for students headed off to college in a few weeks. Even if you had a loan last year, it's possible that your lender will not be willing to come through with money for the 2008 fall semester.

In fact, a new survey by TuitionBids.com — a Website that says it will allow lenders to "compete" for your student loan business — says 60 percent of students needing loans for the fall semester don't have all of their money lined up. And half of those surveyed said they may have to change their plans to attend college if the money doesn't come through.

The message is loud and clear: Don't wait until your tuition bill is due to check with lenders. Although Congress took steps to create liquidity in the student loan market by making the Treasury a lender of last resort, many banks are still unwilling to add these loans to their portfolio. And with lenders limiting the total amount in their student loan portfolio, many will find it is "first come, first served" for the money that is available.

For this year, Stafford Loan limits have increased to $5,500 for freshmen, up from $3,500. And seniors can borrow as much as $7,500. Subsidized Stafford loans — on which interest does not start until graduation — are based on need, as determined by the FAFSA form. But even students who don't think they could qualify based on need may receive approval for unsubsidized Stafford loans, where interest starts accruing immediately but can be deferred until graduation.

The subsidized Stafford loans will carry a fixed rate of 6 percent when you graduate. Unsubsidized Stafford loans carry a lifetime rate of 6.8 percent.

At SimpleTuition.com, you can run a search of participating lenders who are still making student loans and have agreed to work with your college or university — for both Stafford and private loans. Search for the Stafford loans that you've been approved for first. Then you can turn to private loans, typically made with a parent co-signing for a student.

I created a search on SimpleTuition.com for $10,000 worth of loans. At least six lenders were offering Stafford loans — a great place to start looking. On the private loans, lenders' rates ranged from as low as 4.5 percent to as high as 14 percent!

The search also shows you the total cost of repaying that loan. Borrowing $10,000 at the loan rate of just more than 14 percent will result in a total repayment cost of more than $41,500, if you stretch it out over 300 monthly payments, or 25 years!

The rate you'll pay on a private student loan depends on your credit score. In previous years, private loans were made to borrowers with credit scores in the low 600s. But in this credit crunch, you'll need at least a score of 700 to qualify.

PLUS loans are made to parents, regardless of need. They carry a fixed rate of 8.5 percent for the life of the loan. Parents who qualify based on credit scores can borrow up to the full amount of the cost of college for the year, less any student loans. Some schools participate in a federal direct lending program for PLUS loans, and on those loans the rate is "only" 7.9 percent.

Kevin Walker, CEO of SimpleTuition.com, has a warning for families: While there is money available if you act quickly, you need to keep your four-year plan in perspective. Says Walker: "Just because you can borrow huge sums of money for college, it doesn't mean you should ."

By now, you get the picture. You'll need good credit and an immediate search to find money for college this fall. Don't delay. But also don't get so involved in this "treasure hunt" that you forget the ultimate cost of borrowing — either to the graduate or to the parent's retirement plans.

It is important to sit down and figure out the costs vs. the benefits. Part-time attendance at a community college may be the answer for some students, who can then transfer and complete their studies at a state school. Even online university degrees are looking attractive these days, if you have the self-discipline.

And more expensive schools are going to be forced to give out more of their endowment money in the form of scholarships and grants that don't have to be repaid. If they don't, they'll be faced with dwindling enrollment as more and more families conclude they simply can't afford the most expensive version of the college dream. And that's The Savage Truth.

Terry Savage is a registered investment adviser and is on the board of the Chicago Mercantile Exchange. She appears weekly on WMAQ-Channel 5's 4:30 p.m. newscast, and can be reached at www.terrysavage.com. Her new book, "The Savage Number: How Much Money Do You Make?" has just been published. To find out more about Terry Savage and read her past columns, visit the Creators Syndicate Web page at www.creators.com.

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