The time when students could simply enroll in college, show up, get free books, get their degree, and head out into the world are long gone. While this may have been the case thirty years ago, it is now commonplace for the students of today to finish their college programs owing tens of thousands of dollars in education costs. These amounts of debt are not insignificant. Even though student lenders can be more accommodating than many others, debt is debt, and the more you have, the more it will work against you when it comes to your credit and future expenses. That’s why anyone with student debt should pay close attention to exactly that they owe and the best ways to go about paying down what’s been borrowed.

1. Find out Where You Stand

As soon as you graduate, or a bit before, you should look into the details of exactly what loans you have taken out in your name and when the payment dates are scheduled to begin. This will allow you to make a proper financial plan to cover them. Most federal loans come with a grace period of 6 months. Private education loans are all different, so check out your promissory note for upcoming payment dates.

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Of all the debt relief options out there, debt settlement is still the most controversial, misunderstood, and confusing option. I got the following email just the other day:

"Hi. I am considering a debt settlement program and overwhelmed by the information and choices. Would love some advice."

Here's my response:

Hi, debt settlement is certainly a confusing option. Here are some points to think about:

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Debt-tips.com is written primarily for readers in the U.S. For those readers who reside in the U.K. we are offering the following article on debt options in the U.K. Here are your debt relief options in the UK:

DMP (DEBT MANAGEMENT PLAN)

A debt management plan (DMP) in the UK helps individuals to manage their outstanding debts, when they are unable to maintain their payments to their creditors. A DMP consists of an agreement between you and your lenders to make a set monthly payment. The debt management plan firm, usually called ‘providers’, negotiate with your creditors and manage the payments on your behalf. Your monthly payment is based on your disposable income. Payments are then distributed between all your creditors by your ‘providers’.

When your DMP is being set up, your creditors could agree to freeze any interest charges. However, they don’t have to agree to this. And they don’t have to agree to your DMP all. If they don’t agree, they can also continue to contact you, ask for payment – or even take you to court and declare you bankrupt. DMP applies only for ‘unsecured debt’ such as credit cards or personal loans but do not cover ‘unsecured debt’ like a mortgage, for example. The debt management plan firm usually charges you a fee for their service, while other non-profit organizations like debt charities provide their services free of charge.

DEBT CONSOLIDATION

Debt consolidation gives the opportunity to cover all or part of your outstanding debts with a single loan. In debt consolidation you take a new loan to pay off several existing debts. Debt consolidation in the UK applies only for unsecured debt; it can be a good way of taking control over your finances.

Consolidation loans can be tax deductible, however in some cases you need to put your property as guaranteed - that means a risk of losing your home. Make sure you understand fully the interest rates and possible penalties when asking for debt consolidation.

INDIVIDUAL VOLUNTARY ARRANGEMENT (IVA)

In the United Kingdom an IVA is a formal agreement between you and your creditors to pay off your debts. With the help of an Insolvency Practitioner you will set up a proposal to your creditors and an agreement will be set upon. Your arrangement will last at least five years, at the end of which time your debt will be cleared and you will no longer be making any more payments for the unsecured debt included in your IVA application.

During an IVA You make regular payments to an authorized debt specialist called an ‘insolvency practitioner’ or (IP). They share this money out between your creditors as agreed in your IVA. There is no maximum or minimum level of debt and no maximum or minimum level of repayments, except what is acceptable to your creditors. Your IVA usually ends when the agreed amount has been repaid. Costs for an IVA are included within your monthly payment. The interesting side on an IVA is that all your remaining debt will be written off at the five year mark.

BANKRUPTCY

Bankruptcy in the UK applies only for individual persons and not business entities. Bankruptcy is considered the last resort if you cannot pay your creditors. When you label yourself bankrupt you tell to your creditors that you are unable to pay your debt. Either you or a creditor can make the bankruptcy order. Once the petition is filed there are fees that have to be paid to the courts. You will be assigned a Petitioner who will gather all the information needed such as your assets and income, a list of Creditors and how much you owe each one. You make all of your payments to your Petitioner not to the creditor.

In a bankruptcy all your assets like properties could be sold to pay back your creditors. Going bankrupt is not free; Court fees are involved in the process. Your credit score will be severely damaged by this solution.

This is a guest post from iva123.co.uk which offers easy to understand information and opinions on an IVA.

For most people, getting out of debt is their dream. And also their worst nightmare! Unfortunately, if all you do is dream, you'll never get yourself out of debt. Life doesn't work that way, unless you lucky enough to live like Major Nelson from the old "I Dream of Jeannie" TV series.

There are many steps people try. And try again. And again. And still are stuck in debt. Not because they don't work. But because these people are all missing the "one thing" they must do to get out of debt.

Here are a few articles I found recently that explain some of these steps. There are lots of good suggestions, so check them out:

Break The Credit Card Cycle from No Credit Needed.

4 Tips for Staying Positive About Your Finances from Money Ning.

But if you really want to get out of debt, it all starts with "the one". So, which one do you think is "the one"?

• Buying a lottery ticket. Nope.
• Signing up with a debt relief program. Nope.
• Doing the same things you've always done and hoping they work this time. Nope.
• Putting every penny towards your credit card bills. No.
• Setting up a budget. No.
• Borrowing money from your rich uncle or cousin (unless they are SO rich you don't need to pay them back). Not this one either.

All of these are good ideas for paying down your debt. And all will help you reach your goals. So you can certainly use a few of these tips as part of your strategy for getting out of debt.

But none of them are the ONE THING YOU MUST DO to get yourself out of debt.

What is that one thing? It all starts inside of you. In your mind. In your heart. Unless you are totally committed to getting out of debt, you won't. You'll quit when things get tough. You'll go back to your old, bad habits. You'll blame others for your troubles.

And none of this will help.

So...you must make a commitment to yourself to do whatever it takes to get out of debt. That is THE one thing you MUST do!

And keep trying no matter how hard it gets. Or how long it takes. If you do this, you have a fighting chance to succeed. Because the only thing you can truly control is your effort. And making that commitment means that you will give the amount of effort you need to get out of debt.

There's a reason why 75% of all people fail to stick with a debt relief program until the end - because its much easier to stay in debt. And whine. And complain. And to keep making the same mistakes, and spending the same amount of money.

So do yourself a favor and commit to YOU!

• Write down your ultimate goal (to pay off all of your debt).
• Then write a list of all your debts.
• And list the steps you need to take to pay off each one.
• Pick one and pay as much as you can, until it is paid off.
• Then add that amount to the next one. And so on.
• Also, put a time frame next to each step. You can put down a date for reaching your goal, or write down exactly what you'll do each month to reach the goal, whatever works for you.

Then - when you are totally committed to fixing your financial mess - you'll be ready to do whatever it takes to get out of debt!

You see the ads. They promise you huge debt relief from the government. Your creditors will forgive your debt because it’s your “right” and you’ll be debt free in as little as 18 months! It sounds great, especially if you're neck deep in debt, but more likely than not, enrolling with a company who uses this type of advertising will cause you more problems than when you started.

One common feature in these ads is President Obama talking about bringing relief to debt-ridden individuals and insinuations that the program they offer is related somehow to stimulus money received by banks in 2008 and 2009 or the credit card reform bill in 2009. The stimulus bill as you may recall was passed to stimulate job creation through loans to businesses and communities, as well as tax breaks to individuals, while the credit card reform act had mostly to do with creating mandatory disclosures that credit card companies had to make to prospective and current card holders.

The “bailout” referred to in many of these ads is simply referring to a common creditor practice of "writing off," "charging off", or settling a debt. A "write off" or "charge off" is simply an accounting term used by banks and other businesses when they move an account from an asset to a loss on their books, which happens when a cardholder does not make a payment for six consecutive months. This of course has an impact on the value of their business and in turn, their stock price, but unfortunately, it has very little to do with your legal liability for the balance owed. Settling a debt, which is in fact a legal way to satisfy your debt obligation but is in no way government-sanctioned, involves negotiating a mutually agreeable amount that is less than the full balance to satisfy a debt. Creditors are willing to do this when someone is severely past due, usually at least four to six months behind, because it makes financial sense for them to get “something instead of nothing”, not because of the Obama stimulus bill.

You may get mailers with words like "National Debt Relief," more often than not resembling an IRS notice with a return address of Pennsylvania Ave. (where the White House is located) in Washington D.C. Just like the television and radio commercials advertisements you may have seen, this is simply a dishonest attempt by marketers to solicit phone calls for debt relief programs. Companies generating interest in their service in this manner should likewise be avoided. Not only does this harm the overall landscape of the debt relief industry and in turn consumers by rewarding unscrupulous companies, but chances are a company with this marketing style probably has little interest in staying in business for a long time, particularly since the FTC and other consumer protection agencies have made it a point that these ads will not be tolerated.

If you are looking for a reputable debt relief company your best bet is to talk to someone who has worked with a company and completed their plan. The Better Business Bureau complaint record of a company is also a good indicator of how well they are satisfying their clients.

Robert Zangrilli is the CEO of Franklin Debt Relief, a debt settlement company in Chicago, Illinois.

An emergency here, a well-deserved treat there, and before you know it, you're head over heels in debt. Then one of you loses your job and you realize there's no way you can make all your payments. Before you head to the bankruptcy court, investigate your options.

What are my options?

First, decide whether you want debt counseling or debt consolidation. Debt counseling will help you work out a repayment program that will work for you and help you get control of your finances. With debt consolidation, a settlement expert will actually negotiate with your creditors to lower your interest rate and/or your principal balance to reduce the amount you have to repay the creditor.

Where do I start?

With so many companies promising debt relief, how do you know which ones are legitimate?

Search online and look in the phone book advertising section to start your initial list of companies. Then check the reviews of each company by former clients. You can easily find a lot of information on a company by reading its online reviews. If people have been scammed by a particular debt relief company, you'll find something online that will let you know. This is the quickest way to start narrowing down your list and you can do it outside of normal business hours.

Make sure the company is a non-profit organization, and avoid those who aren't. If a company wants to charge an exorbitant fee every month or charge for their initial consultation with you, cross them off your list.

Check out the company's rating with the Better Business Bureau. Also contact your state attorney general to see if there are or have been complaints filed against the company and if they are licensed to operate in your state.

Visit www.nfcc.org which is the National Foundation for Credit Counseling, a non-profit organization, and the site is available in either English or Spanish. You'll find consumer tools to help you, such as videos, tips, education, worksheets, etc. They also have a Debt Management Program for those who are severely in debt. This program will help you pay off your debt and rebuild your credit.

Why Can't I Do This Myself?

A few people are able to successfully negotiate with their creditors and regain control of their finances. For most of us however, the late notices and demand letters have already taken their toll and we're in no mental or emotional state to deal with harsh creditors. Credit counselors and settlement experts do this for a living, so are better able to objectively negotiate to your advantage.

Whether you choose counseling or consolidation, make sure you choose a reputable company and start as soon as you can.

This article was contributed by Jane Sanders from Debt Management. Stop by her blog for more financial tips, like how to get debt collectors to leave you alone.