One woman decided that an education was worth the student debt. Michelle Bisutti took out $250,000 in student debt before she finished medical school in 2003. But over the years it grew to a $555,000 debt.

The woman deferred her loan payments while she did her residency and so default charges compounded the interest rates. There was a single $53,870 fee added and eventually the debt amount was turned over to a collection agency.

Bisutti acknowledges she didn't read the loans fine print. Apparently! What doesn't make sense is why she let it go to a collection agency before she took it seriously. I took out a student loan and I was constantly getting papers that were telling me I would have to start making payments on such and such a date; so I knew in advance what the payments would be and I could figure out a way to pay them.

Did she hide all of those under her bed and hope they would go away? She needed to contact her financial counselor and find out a way to start making the monthly payments. Since she avoided the repayment she now owes over two times the amount.

Student loans are serious business. Since the government funds these student loans they are very hard to get rid of. Whereas other debts can pretty much be eliminated by declaring bankruptcy. The keys to the house are taken away and the car may be taken away along with other things but you have the chance to start over.

But student debt follows individuals around even if they declare bankruptcy. So getting rid of student loan debt is virtually impossible especially once the collection agency is involved.

Probably the best thing to do in the situation is contact financial aid advisors and see if payments may be trimmed down and extended over a longer period of time.  But other than that there isn’t much that can be done.

The website FinAid.org said that there's over $730 billion in outstanding federal and private student-loan debt and only 40% of that is actively being paid on and the rest is in default. This means that only $292 billion is being repaid and that $438 billion is in deferment, forbearance, or in collections.

Students need to understand that student loans are serious. They can mess up the rest of their life if they aren't paying attention. They need to understand everything and read all of the fine print before they sign their name.

Debts can quickly spiral out of control and in this economy it can be difficult to pay back. So only take out student loans as a last resort and make sure that everything is as clear as day before you put your signature on it and take the money.

Approximately one in five college students default on student loan payments within the first three years of repayment, which shows what a difficult spot graduates are in particularly now. The Department of Labor has reported that overall 6.7 percent of student borrowers default within two years and 11 percent at for-profit schools.

The numbers show that the more money students borrow and the longer they have to pay it off; the more likely they are to default on their loan. For-profit colleges tend to be much more expensive for students although they offer well known and acclaimed programs. Whereas, many non-profit schools like state universities offer cheaper tuition, usually a better name, and a better education.

But, whichever path you take education is necessary and it can help you improve your life; although the less you have to go into debt to earn that education the better. You may be poor while going to school but it’s a lot better than being living it up in college and being poor when you’re a working adult. The ideal is to borrow as little as possible, so you can leave college with the smallest debt.

Because of the growing number of students leaving college with hefty loans and defaulting, the government is going to be collecting and using information to decide which colleges qualify for student loan programs supported by taxpayers. So schools that have over 25 percent defaults for three years will no longer be eligible to get government supported student aid starting in 2012.

Student debt is a growing problem, especially when students default on their payments. Students need to realize that by taking on a lot of debt they are also taking on a lot of stress. Especially in times like this. The recession has made it so that many are unemployed, underemployed, or not making as much as they used too. It’s scary but the reality is that taking on a lot of debt puts you at greater risk for defaulting.

Some well known schools have seen their default rate over three years rise to 23.2 percent at Kaplan University, 17.1 percent at DeVry University, and 15.9 percent at University of Phoenix. Part of the reason though that many of these students are defaulting is because they come from low-income backgrounds and are unable to keep up with repayments.

“In general, higher education is a good investment but there are not guarantees. At some schools, there’s a one in five chance you’ll be in worse financial shape – three years out- than before you began” reported that Michael Dannenberg from the New America Foundation. He also advised students to be cautious when borrowing large amounts of money for college. “The debt can grow exponentially in default, and it follows you forever. College loans can almost never be discharged in bankruptcy.”

There is a lot of risk when taking out a student loan because you never know what is in the future. But with that being said, education is a kind of insurance policy that can help you stay employed, earn more, and secure a better job. But remember to be careful about taking out large amounts of student loans.

If you've done the time and earned your degree but you still don't have a job; there's a problem. Student loans will arrive whether you're ready or not. If you graduated in May of 2009 the six month grace period is almost over and you will soon have to start making monthly payments.

One tactic that you can try is by going to the financial aid office and speaking with a counselor about deferment or forbearance. This isn't guaranteed, but it may allow you to postpone your payment if you meet specific circumstances. Even though there might be some consequences, none will be as harmful to you as late payments or defaulting.

A deferment is better because federal loans take into consideration if you're in the military, graduate school, or facing economic difficulty. If you're trying to qualify for a deferment you must earn less than $16,245 a year in the continental U.S. Plus you are eligible for public assistance like food stamps. Depending on if your deferment is based on economic hardship it's granted one year at a time but unemployment deferments are granted in six-month increments. But students can reapply for these for a total of three years each.

Deferment is a great option if you can't afford the payments. But in case you don't qualify you might be able to postpone payments if you're having health problems. This type of postponement is called a forbearance. Although in order to qualify you most likely will need to be interviewed in order to determine if forbearance is the best solution.

Even though there are these options out there if you're struggling and worried about how you're going to make your student payments remember that delaying it isn't necessarily the best thing. It's important to realize that even though you defer these payments the interest is still accruing on the loan whether you're making payments or not. So the amount will be larger when you finally start making payments. But if you do get a deferment or forbearance it's a good idea to pay the interest costs in order to minimize the financial impact later on.

If you don't qualify or choose not to get a deferment or forbearance then try picking a payment plan that reduces your monthly payment. By reducing the payments it will take longer to pay off the loan but  it may be worth it. Another option is the Income-Based Repayment Program for federal loans. The program caps monthly payments at 15 percent of your earnings. Then if the debt isn't paid off in 25 years it is forgiven. To be eligible for this program officials weigh your debt level against your income.

Even though it's a difficult time and many grads are facing student loan payments with no job, there is hope. Just remember that you want to keep your credit report as squeaky clean as possible. If that means you need a deferment or forbearance then get it but don't ignore the payments. Defaulting on your loan will cause serious problems today and throughout your life.