In 2009, the average student graduating from a four-year private university left school with over $27,000 in student loan debt. There are very few ways to get out of actually paying off student loans, including joining the Peace Corps, AmeriCorps, some teaching programs, or the military, or by dying. But even declaring personal bankruptcy does not relieve you of this tremendous burden. Essentially, this means that your options are limited: saving the world, dying, or paying back the loans.

Assuming you have decided to pay off the debt, understanding the details of student loans will make the repayment process less overwhelming. There are three major types of federal loans you may have: Federal Perkins loans, Federal Subsidized Stafford loans, and Federal Unsubsidized Stafford loans. For each of these loans, there is a six-month grace period after graduating, during which you do not have to pay anything on subsidized loans and only have to pay interest on unsubsidized loans (the principal is the original amount you borrowed and interest is the cost of borrowing). There are also private loans, which will be discussed later.

The first major decision want to make upon graduating is if you are going to consolidate your loans. After you graduate, you will probably get flooded with letters offering to consolidate your student loans (you are only eligible to do this after you graduate). Consolidating your student loans means bundling all of your loans with a single lender and payment plan. This may lower your total monthly payment due, but will extend the terms of the loan and result in paying more interest in the long run. Despite the lengthened payment period, consolidation can still be very useful in some instances.

The decision of whether or not to consolidate is more difficult than in previous years due to higher interest rates. While there are many considerations, there are several specific items that are especially important (use FinAid.org to continue your research):

1. Interest rates: These will typically be the same for all lenders. You should compare them to the rate you would be paying without consolidating (lower is better).

2. Discounts for automatic payments and on-time payments: Many lenders offer discounts for reliable borrowers, which could make consolidation less costly.

3. Ability to use credit cards: Paying off your student loans with credit cards is a great idea to receive rewards and points. However, DO NOT go into credit card debt when paying off student loans. You should pay the student loan bills with a credit card, but be sure to pay off the credit card when it is due.

Once you begin receiving student loan bills, there are more complications. The main problem is an inability to make the payments. If this happens to you, you have several options:

1. Call your lender and request an alternative payment plan: This will decrease your payments in the short term, which will then increase as your income increases.

2. Ask about qualifying for deferment: If you qualify, you can have an extended grace period where you are not required to make payments while interest still accrues. This will not affect your credit score.

3. As a final resort, there is an option of forbearance which does not require qualifying circumstances like deferment, but will negatively impact your credit score.

Once again, do not go into credit card debt in order to pay student loans (the interest rate on credit card debt is much higher than on student loan debt).

You may also find that you can pay off loans more quickly than what your plan dictates. This seems like a great idea because the faster you pay off loans, the less interest you end up paying, right? Maybe. If the interest rate is relatively low and you are actively investing money at a higher interest rate, it is mathematically in your advantage to hang onto the loans as long as possible. However, if you cannot stand the feeling of having debt, paying off the loans might be a better option for you. As mentioned previously, you might also have private loans which have higher interest rates and should generally be repaid as soon as possible because they are very restrictive.

There is much more to student loans than can be contained in one article. However, a basic understanding is more than enough to begin researching your payment options and begin making smart decisions.