You may just now be facing the reality of the amount you borrowed to attend school in case you are getting ready to graduate. If you took out private student loans in addition to the federal student loans you may be in an even more difficult situation. There are strategies you can employ to reduce your monthly payment. However, you will need to pay the loans for an even longer period of time. It is important to be as proactive as possible. You may not be able to afford a lavish lifestyle for a several more years as you work to pay off your degree. It is important to note that to qualify for income based payments and loan forgiveness programs, you will need to consolidate your loan into a Federal Direct Loan. The Federal government just announced income based repayment options that allows you to reduce your monthly payment based on your current income. It will adjust as your income adjusts and after making on time payments for twenty-five years you can have the remaining balance of your loan forgiven. To consolidate your federal incomes is another way and lengthen the amount of time you have to repay the loan.

Overwhelming student loans

The consolidation option will decrease your monthly payment, but you will end up paying more in interest over the life of your loan. This option may make it easier to manage your current financial situation, particularly if you do not qualify for income based student loans. The federal government will allow you to defer your payments if you lose your job or if you are faced with a difficult financial situation. You will need to document your situation and turn in proof of your situation. You cannot simply stop making payments, you must call and ask to be put on deferment and complete the application to qualify. Student private loans have a higher interest rate and will not be as flexible on changing your payment amount or allowing you to skip payments. The interest rates are much higher on private student loans. You will need to make paying these off as quickly as possible a priority. Even with the lowered federal student loan payments, you may consider consolidating your private student loans to lengthen the amount of time you have to pay off the loan in case he payment amounts are too much.  Try to lock in an interest rate instead of using a variable interest rate when you consolidate your private student loan. The shorter the term of the loan the less you will pay in interest, so try to make the payment amount manageable, but pay as much as you possibly can. Your current financial aid office offers exit counseling to help you come up with a plan to pay off your student loans. You can visit a financial counselor to help you create budget to pay off your student loans more quickly. However it is important to realize that most credit counseling places work primarily with consumer debt, not student loan debt.