The bad economy combined with decreased federal and state funding for post-secondary education means that not only will more students take out student loans this year, but also that these students will be borrowing higher amounts. For many of these students, their loans will come from several different sources, including both private and public sources.

While in school, few students pay much attention to the actual amount they are borrowing, or the terms and interest rates of their loans. Furthermore, most students take out separate loans each semester they are in school, and each of these loans will typically have a different interest rate. As a result, it is very common for students to graduate with several student loans. In fact, many students have ten or more separate loans that they must keep track of upon receiving their diploma.

Keeping track of this many bills can be difficult. Furthermore, many students have found a rough job market has made it harder to pay back their student loans than they were led to believe while in school. Unfortunately, student loan debt is one of the few types of debt that Americans are stuck with no matter what happens in their lives. These loans can very rarely be discharged in bankruptcy, and going into default or delinquency often means having to pay steep fines and fees. Therefore, it is important to make sure that you stay on top of this debt.

Start by reviewing the loan summary sheet that is given to each student before they graduate. Federal law requires that each school give this paper to each of their students who has taken out student loans, and it should list every loan that you have taken out during your education. Be sure to review the loan terms and note the interest rate, payment amount, and payment start date. Then, work out a budget that includes all of these loan payments, as well as any other new expenses. Even though your loans will probably start at different times after your graduation, within a few months you will be expected to pay all of them, so make sure that you can cover your basic expenses and your loan payments.

Based on this budget, you can determine how easy or difficult it will be to pay back your student loans. If you cannot cover the loan payments, don’t panic. There are several options available to help. The most common way many former students deal with their student loans, however, is to go through the consolidation process.
In loan consolidation, all or some of a student’s loans are combined into one big loan. This loan will often have a lower interest rate than the average of the loans being consolidated. It is also possible to stretch out the payment term of the loan, making it possible to pay less every month in exchange for agreeing to make payments over a longer period of time.

Since students can only consolidate their student loans once, making the decision on when to consolidate and which loan to include is an important one. While a former student is allowed to consolidate at any time, it is usually recommended that consumers wait for a period of relatively low interest rates before going through the process. Periods of low federal interest rates on ten year bonds usually mean that consumers will get the best deals on loan consolidation.

In addition to interest rates, however, a former student should also consider his or her financial position and future goals. If you are planning major life changes, be sure that you can fit your student loan payments into your new budget. If you are planning to go back to school, remember that your loans can be deferred if you are a full-time student, but some consolidated loans cannot. Many students choose to put off consolidation until they are completely done with their education for this reason.

Anyone who cannot make their student loans payments should definitely consider going through a consolidation before defaulting on their student loans. Consolidation can generally leave a borrower with a lower monthly payment, making it easier to make timely payments. Do not agree to a consolidation plan without first having a budget in place that will allow you to make payments on the new loan. Since you can only consolidate once, if you find you cannot make your new payment, your only choice will be to ask for a hardship deferment or default on the loan.

When comparing consolidation offers, be sure to ask for everything in writing. Ideally, look for a loan with the lowest interest rate and no origination fees. If you can make the payments, don’t worry about the payment term. You will be able to make additional payments towards the loans in the future if you want, making a longer payment term a minor consideration.