As families prepare for their children to go back to college, many are considering ways to afford tuition.

The majority of families report planning on paying the tuition outright, according to a new survey from student loan provider College Ave. However, 45% of families will borrow money to pay for tuition. Of those borrowing, the majority report utilizing federal student loans.

With high interest rates unlikely to ease before the semester starts, borrowers will be facing decisions on how much to take out and what loans are right for them.

Highest Student Loan Interest Rates Since 2008

Those taking out federal student loans face the highest interest rates in 16 years. The loans disbursed by the Department of Education this year will have a fixed interest rate of 6.53% for students and 9.08% for parents.

Rising yields on 10-year Treasurys have pushed up the department’s interest rates as investors remain concerned about whether or not the Federal Reserve will cut its benchmark interest rate.

Federal Loans Cheaper Than Alternatives

However, those rates are still far lower than that of private student loans.

According to research by Investopedia, the average variable rate on private student loans is 10.43%, and fixed loans cost even more at 11.11%.

Some families that need to borrow more money than the federal loan limits, need additional funds for costs outside tuition, or that don’t meet the government’s criteria for income look to private student loans.