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About a quarter of families making between $35,000 and $100,000 didn't even explore a major funding source by filling out the Free Application for Federal Student Aid (FAFSA) in 2007-08, according to a survey by Sallie Mae and Gallup.

If students truly have exhausted federal aid options, it's important to compare interest rates and payback terms before choosing a loan, says Deborah Fox, founder of Fox College Funding, a counseling service in San Diego.

GreenNote has a fixed interest rate of 6.8 percent. This is similar to average federal loan rates and lower than average private rates, which were running about 8.3 percent in early February, according to the website Bankrate.com. CEO Akash Agarwal won't share the volume of loans GreenNote has made since it started the lending service last summer, but he says students on average borrow about $5,000 total from two to four lenders. One advantage he touts is that people often feel a stronger obligation to pay back social loans.

"I've decided my repayment is going to be first to GreenNote," says Christopher, who got five loans through the site, primarily from friends of her mother's.

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