It's time to repay your student loans! Problem is, you just graduated and you're on a starting salary. Don't despair. The amount may seem insurmountable at first glance, but it can be easily broken down into manageable chunks, in fact, it's designed that way. The first thing to keep in mind is that you have 6 months after graduation grace period before you have to start making payments. This is the time you need to focus on organizing and researching your options, figuring out your finances and finding the best paying job available.

It's important to realize early on the differences between the student loans you have to repay. For example, Federal and Government based loans are much different from Private loans from organizations, groups and universities. The federal loans typically have a fixed low interest rate which makes the loan repayment very predictable and easy to work into your financial plan. Whereas the private loans have higher and variable rate interest which can change unexpectedly.

For this reason, it's a good idea to create your student loan repayment plan based around the Federal loans including the average private loan and then throw any and all free money towards reducing the capital or principal of the private loans, assuming they allow you to do so. For those reading this information prior to getting student loans, now you see why it's a good idea to read all of the fine print when applying for private student loans. Make sure they allow you to repay the capital early, it will reduce the overall debt that needs to be paid back substantially.

There are few different programs the Federal loans allow you to participate in that can help structure the repayment process to better suit your particular situation.

The standard repayment plan which is the one you are automatically enrolled in, is the best option if you do not have any special circumstances and you want to pay the least amount of money back to the government. This plan consists of equal payment amounts each month over the course of ten years. If you have this money automatically deducted from your paycheck, you can request a 0.25% savings on the interest rate. To pay this loan off even faster and reduce the amount of interest, pay a little extra each month and specify in writing that you want the extra amount applied towards the principal loan amount.

The graduated repayment plan is perfect if you are starting out with a very low salary but expect it to go up over time with annual raises and promotions. In this plan, you repay your student loan in lower monthly payments in the early years and then the payments slowly increase incrementally during the later years. The loan is still for a total of ten years, which means the latter payments will be quite high and because the early payments were low the interest accrued on the principal will be more, so the overall repayment cost of the loan will be higher.

If you have more than $30,000.00 in student loans, the extended repayment plan may work in your favor. On this plan you extend the time you have to repay the student loan from ten years up to a maximum of 25 years. The longer you decide to extend the payments, the more you will end up paying overall. A $40,000 loan paid off over a total of 25 years will equal $83,289 at $227 per month. Ouch!

If you are in the Federal Direct Loan Program, you can apply for the income contingent plan. This basically means you pay back the loan based on the amount of money you are currently earning. When you're salary is low you pay back less and it increases as your salary increase. This program allows you up to 25 years to payback the student loan after which time any remaining money owed is forgiven.

For more information on government loan programs and consolidation, visit: http://www.loanconsolidation.ed.gov/