For many recent college graduates in the United States, the party is over (or nearly over) and life in the “real world” is about to begin.

Thanks to historically high education costs and the struggling economy, graduates across the country are likely worried about paying off education loans.

In most cases, student loans can't be discharged in Chapter 7 bankruptcy, which means that students and recent graduates should stay on top of these loans if at all possible.

Here are a few tips for new grads looking to start their careers as degree-holders on the right financial foot.

Deferment & Forbearance

In many cases, graduates are not required to begin paying back student loans immediately after graduating. Some lenders offer a six-month “grace period” before payments come due.

Many borrowers also qualify for deferment or forbearance of their payments.

• Deferment: Deferment allows borrowers to postpone payment on their loans for a variety of reasons (for example, if the borrower remains a student by pursuing a second degree). When a subsidized loan is deferred, no payments are made and no interest accrues; when an unsubsidized loan is deferred, no payments are made but interest does accrue.
• Forbearance: Forbearance works by temporarily reducing (to as little as nothing) the amount of money a borrower owes each month. Various financial difficulties can qualify a borrower for loan forbearance.

Loan Consolidation

If you don’t qualify for forbearance or deferment, or if you’ve already exhausted your options, you may want to consider consolidating your loans to ease your payments. Since they typically can't be included in bankruptcy, this may be your best bet for debt relief.

The government’s borrower services Web site for student loans (loanconsolidation.ed.gov) provides graduates with applications and instructions for consolidating their loans into a single payment.

Some advantages of loan consolidation include the following:

• You’ll only have to write checks to a single lender each month, the Department of Education. Further, you’ll only have a single payment to make, rather than several.
• You have four repayment plans to choose from, and you’re permitted to switch from one to another if your financial circumstances change.
• You may be able to reduce the dollar amount of your monthly payments (although this will likely mean a longer repayment period).
• There is no maximum or minimum dollar amount you can have to qualify for loan consolidation.

Finding a Job After Graduation

Of course, you can’t make any payments if you don’t have any money coming in. This BusinessWeek.com article details the best job markets for recent college graduates in the current economy.

And, finally: Congratulations if you’ve just earned a degree and good luck with the next phase of your life!

Tags: bankruptcy, chapter 7 bankruptcy, loan consolidation, student loans