Finally your graduation comes and you are a college graduate. Congratulations! Maybe you even have a job offer. Statistics show that you will earn a million dollars more than you would have if you had gone to work directly from high school.

Other benefits should also be in store for you. College friendships may evolve into a network of colleagues that will lead to an exchange of professional help throughout your life. You now have better communication and other skills that will improve your enjoyment of your life. All of this is good news!

Now you are faced with paying back the debt you ran up in college. The average undergraduate full-time student graduating in 2007 from a four-year college carried a debt of $20,098 in loans, according to projectonstudentdebt.org. You may also have private loan balances and credit card debt accumulated from college.

Your increased earning capacity should allow for regular repayment of college-related debt without undue hardship. The key is a plan for a sound repayment program with budgeted monthly payments combined with a large dose of self-discipline. Stick to a plan, pay off your debt on time and you will build a debt-free life and a solid credit history that will support your future borrowing needs.

When Do You Have to Start Repaying Your Student Loans?
You are responsible for repaying the principal and interest on your student loans when you graduate or cease at least a half-time student. There may be a six-month grace period (for subsidized Stafford Loans) or nine months (for Perkins loans) but loans have to be repaid. The Stafford loans that are not subsidized by the federal government require interest payments even while still enrolled in college. Repayment of private loans is arranged at the time the funds are borrowed. PLUS loans-loans to parents for undergraduate students-are not the responsibility of the individual student, but rather the parents who signed for the loan. You will want to work with your parents to arrange repaying them money you owe.

Budgeting Student Loan Repayments
You are more likely to pay off your debt regularly if you know in advance how much you will have to pay back.

The U.S. Department of Education maintains a central database for all student aid in the National Student Loan Data System (NSLDS) at http://www.nslds.ed.gov. To use the database, you must have your assigned student aid PIN (personal identification number). The site contains your personal data for the Direct Student Loan program, the Pell Grant program, and other Department of Education student aid/loan programs. You will be able to get consolidated information on loan/grant amounts, outstanding balances, loan status, and disbursements. Colleges, schools, and agencies that guarantee loans update regularly, even daily.Your parents can also use this Web site to get up-to-date information on their PLUS loans by using their PIN to access their balance data.

Consolidating Your Student Loans
To create a pay-back budget, look at the interest-rate cost and consider consolidating your loans to save money, Consolidation help is available on the Internet. One helpful site is http://www.studentloanconsolidator.com. By consolidating federal student loans, you might lock into new, low rates on a fixed-rate basis.

Consolidation can also mean longer payment periods. Longer repayment periods lower the monthly payment, but they also increase the total amount of interest you pay. Make sure the loan you get allows you to repay or make early payments on your own without any penalty.

If you have more than one type of student loan, the new interest rate for your consolidated loan will be the weighted average of the type of loans you are consolidating. A $10,000 Stafford loan at a rate of 4.06 percent and a $10,000 PLUS loan at a rate of 4.86 percent will be calculated by (10,000 ´ 0.0406) + (10,000 ´ 0.0486) ¸ 20,000, which equals 0.0446, or a consolidated rate of 4.46 percent.

You can usually get an additional 0.25 percent rate reduction by enrolling in an automatic repayment plan. An even larger bonus reduction in interest rates can be a reward for consecutive, on-time payments; using both can cut a whole percent on your plan.

Sallie Mae offers consolidation loans
Sallie Mae services many student loan programs and maintains an information service on its Web site. Applications are available on the Web site. If Sallie Mae does not service your loan, you can find other Web sites by going to www.Google.com and typing in student + loan + consolidation

Your private student loans still have to meet federal guidelines. Some of those guidelines are:

• Monthly payments
• The minimum payment of $50 per month, or as much as the interest payment if it is greater than $50 per month.
• A minimum five years to repay plan
• No-penalty prepayment
• Payment cancellation if you become totally disabled or die.

Default at Your Own Risk
Don't be afraid to negotiate a payment system that works for you. For example, you may want to pay more as you earn more.

If you fail to meet the repayment provisions of your federal student loans after nine months, the bank will request the loan guarantee agency to purchase the loan. Once that happens, you will sent into collection, making it immediately due in full These are the consequences of default:

• You can be sued for the entire amount of the loan.
• Your credit rating and credit score will be damaged, and your ability to borrow money, get a mortgage, an automobile lease or loan, and a major credit card will be limited.
• Refunds due you on federal or state income tax payments can be withheld.
• Your salary or wages may be garnished.
• You lose your eligibility for federal or state benefits programs.
• You will be liable for the costs associated with the collection of your loan, including court and attorney fees.
• You may not be able to renew or hold a professional license issued by a government agency.

Before You Default
You will be much better off negotiating with your lender before you run into trouble. The bank is interested in the eventual repayment of the loan plus interest and are usually willing to negotiate a reasonable plan toward that end.

As you work out the repayment plan for your student loans, remember what a wise investment you have made in your future. College-going students can expect significant financial help in meeting costs, and they will have significantly greater lifetime income to repay any loans taken to finance their college investment.