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Student loans cannot be discharged even with bankruptcy. Continued default can mean damaged credit, additional collection fees of up to 25%, loss of tax refund, 10% loss of pay check, and even law suits filed against you. Sounds pretty bleak, doesn't it? But per legal eagles, Nolo Press: "There is much you can do to take control of your own loan situation if you have the right information, a little perseverance and a large amount of patience.... Ignoring your loans will not make them go away. Eventually, you will have to deal with them. Further delay just increases the amount you owe, as interest and fees and costs for collection mount up."

BASICS
To understand student loan repayment, it is first necessary to understand student loans overall. One of the best resources we have found to accomplish this task is eStudentLoan's site Financial Aid 101 which is a basic review from start to finish including a calendar of tasks need to be accomplished for loan acquisition. Additionally we have found the following breakdown to be very helpful in determining what is available.

Besides "work-study programs", there are grants and loans. Grants do not have to be paid back, loans do. Federal loans can be "subsidized", which means the government pays for the interest while you are in school. Otherwise, the loan is "un-subsidized", meaning you pay the interest yourself. Subsidized loans are generally given to students with "greater demonstrated need". All federally guaranteed student loans fall under three main categories: Ford Direct Lending Program (FDLP), Campus Loans, and Federal Family Education Loan Program (FFELP).

FDLP- These are loans directly from the federal government and paid back to the federal government.

Campus Loans- A small amount of federal funding is given annually to institutions which can be loaned out to students, paid back to the institution, and re-loaned to other needy students. They are often called Perkins Loans or National Direct/Defense Student Loans (NDSL).

FFELP- Department of Education issues through your school a list containing an approved network of commercial lenders who provide loans to students. These loans are most often labeled direct loans, Stafford Loans, Guaranteed Student Loan (GSL), Federal Insured Student Loan (FISL), Plus Loan (for parents only), SLS Loan, and consolidation loan.

There are also multiple potential repayment schedules. Therefore, if you find yourself unable to deal with your current repayment plan, do not assume you are locked into that plan. Four of the most common options are:

• Standard- fixed repayment above $50 for 3-10 years.
  Graduated- repayment begins low and increases over the years.
• Extended- repayment from 12-30 years depending on the amount. Income Contingent- each year's repayment amount is based upon your income from the previous year.

DEFAULT
Your loan is considered in default when there has been no payment nor attempt to arrange for payment for 180 days. To get out of default, the student must request a "reasonable" repayment schedule from the lender. The lender will consider the request based upon information supplied by the student and if the request is approved, the lender will suggest a new amount.

There is no amount set by the term "reasonable" but if accepted by the student, the new plan must not reach default a second time. Accordingly, if the amount is not acceptable, re-contact the lender before agreeing to the schedule. WARNING! You do not get a second chance to get your loan out of default. Therefore, agreeing to the terms is essential. Also be aware that though repayment amounts are rarely set below $50, theoretically a "reasonable" amount could be as low as $5.

When you have completed six on time payments, you can apply for a new federal loan. However, to be completely out of default, you must make 12 consecutive on time payments. But once your loan is out of default, you have other options available to you such as deferment, forbearance, consolidation, and even cancellation.