 Congratulations! You've done it. After all the years of hard work and studying, you're ready to go out into the real world and start that career you've been working so hard for. Now that you're about to take your place in the working world, it will soon be time to begin paying back the student loans that help make your education possible for you. You've got some decisions to make and some important things to understand about your student loans. In the next few minutes, we'll go over the basics of what you need to know. Ready? So here's the answer to a big question I bet you have right now. You don't need to begin paying your loans right away. In fact, you have a six month grace period before your first payment is due. To make it easy to remember and to make certain you won't miss your first due date, the Direct Loan Servicing Center will send you a statement telling you the amount you're expected to pay and the exact date your first payment is due. Then, just 30 days before your first payment date rolls around, you'll receive an invoice. It's really a bill and you pay it the way you would any other bill by sending your payment in the envelope we'll provide. To make it even easier and smarter, since you'll also save a quarter of a percentage point on your interest if you sign up for the electronic debit account program, you can even choose to allow the Direct Loan Servicing Center to automatically debit your payment right from your bank account. Now, how much will you have to pay? Well, that depends of course on how much you borrowed and the time you decided to take to pay your loans back. The Direct Loan Servicing Center knows that everyone's situation is different, so they give you the flexibility to choose the payment plan that's easiest for you and your budget. The first is the standard repayment plan. If you choose this plan, you'll make the same monthly payment for up to ten years until your loans are completely paid off. You can also choose the graduated repayment plan that allows you to make lower payments now and higher payments later. If you're a new borrower with at least $30,000 in loans, you can also choose the extended repayment plan and you'll have up to 25 years to pay back your loans and you'll pay the same amount every month. Or you can choose to make lower payments now and higher payments later with the extended graduated repayment plan, yet another choice offered by the Direct Loan Servicing Center. Your payments will be lower in the beginning and it will increase, usually every two years for 25 years until your loans are paid off. And if you choose the income contingent payment plan, you would make payments based on your annual income, your spouse's income, the size of your family, and total loan balance. If you meet the requirements, you make monthly payments that may change as your income changes over the course of 25 years. You can find out more about all of these plans by going to the Direct Loan Servicing Center website or by talking to your financial aid counselor. You're probably wondering just what your payments might be under each of these plans. If your loan amount totals $40,000, your payment under the standard repayment plan would be $460. Your payment under the graduated repayment plan would be $316 and would increase every two years. Under the extended fixed repayment plan, your payment would be $277 every month. And with the extended graduated repayment plan, your monthly payment would be $230 for the first two years and would increase every two years as your income goes up. If you choose the income contingent plan designed to help those with low annual incomes, your payment would vary based on your family situation and your income, but it's likely to be significantly lower than with other repayment plans. I know it's very tempting to choose the plan with the lowest payments right now and that may well be the right thing for you to do, but the important thing to understand is that you'll pay more interest the longer you take to repay your loans. But the Direct Loan Servicing Center knows that starting out in the real world isn't cheap. You may be moving to a new apartment or buying a car and if you're like most of us just getting out of school, money is likely to be tight for a few years. One of the most important things you can do over the next few months is to learn how to make smart decisions about managing your money, including the importance of setting up a budget for yourself and sticking to it. Okay, managing your money, a very big subject. To get you started on the right track, the Direct Loan Servicing Center has prepared this booklet. It's called Learn the Basics and Manage Your Debt. It covers everything from how to choose the right repayment plan for you, to how to giving you a simple framework to help you set up a monthly budget. The biggest thing to remember, and this is really important, is that your loan payment is a regular monthly cost, just like your rent or car payment, and as an adult it's your responsibility to pay it. But what if you just can't get the money together to pay your loan? Sometimes not so great things happen in life and the Direct Loan Servicing Center knows that. So if you're having trouble making your payments, the most important thing to do is to reach out for help by contacting the Direct Loan Servicing Center. How can they help? Well, you might qualify for a deferment that would temporarily allow you to stop making payments on your loan. Or if you don't qualify for a deferment, a forbearance can also allow you to temporarily stop making payments, make smaller payments, or even extend the time you have to make your payments. But here's the important thing to remember. If you don't contact the Direct Loan Servicing Center, they can't help you. And the reality is that if you don't make payments or get a deferment or forbearance, your loan will go into default. Now what does that mean? Well, it means that the full amount of your loan would immediately become due. You may also be sued for the full amount of your loan, plus any attorney costs or collection fees. You might have part of your wages or federal tax refunds taken. And the Direct Loan Servicing Center will report your loan default to all of the major credit bureaus. It isn't pretty, is it? Especially considering that in today's world, keeping good credit is more important than ever before, and the serious dent on your credit rating could mean that you can't rent an apartment or buy a car, or even get that job you've always dreamed about. So please, and this may well be the most important thing you hear today. If you're having trouble, reach out to the Direct Loan Servicing Center for help, and don't allow your loan to go into default. Because if you do, and there's just no way around it, you'll find yourself living with the consequences for years. There's another way the Direct Loan Servicing Center may be able to make it easier to afford your monthly payments. If you have more than one loan, as many students do, it could make sense to consolidate your multiple loans with just one loan. So, is consolidating your loan something you should consider? When you combine your multiple loans into one, you'll make just one payment. And because you're also extending the terms of your loan into a longer period, your payment will usually be lower than the multiple payments you might have to make if you didn't consolidate your loans. What's the upside? A lower monthly payment. Something the Direct Loan Servicing Center knows could be very important when you're just starting out. On the downside, you'll ultimately pay more interest on your loans because they will be extended for a longer period of time. Let's take a look at a specific example. If you had two student loans totaling $40,000, your combined monthly payments on a standard repayment plan might be $466. And, over the 10-year life of your loans, you would be paying a total of $15,929 in interest. But, if you consolidate your loans into one and extend the terms to 25 years, your monthly payment would be just $280. That's $186 less each month, but your total interest would be $44,000, or approximately $28,000 more. You'll need to weigh the advantages and the disadvantages carefully and make your own decisions. Lower payments now versus greater interest in the long term. But, it's easy to get the help you need from other places. Just call the Direct Loan Consolidation Center or visit the website to find out more. Another great source for information is, of course, your financial aid counselor. Along with helping you make the choices that are right for you, your financial aid counselor can also tell you more about some of the ways the Direct Loan Servicing Center can save you money and maybe even forgive a substantial portion of your student loans. You're probably ready for some good news about now, right? Here's something easy. You've probably already qualified for and received an upfront rebate on your interest. To keep it, all you need to do is make your first 12 payments on time. If you're late or miss a payment, the rebate you've already received will be added into your loan balance. So be sure to pay right on time for the very first year. You can also reduce your interest by a quarter of 1% with the program we mentioned earlier. You'll be able to use the Direct Loan Servicing Center to electronically debit your monthly payments from your bank account. You won't have to write checks or worry about mailing your payment and just as important, you'll be sure your payment will reach the Direct Loan Servicing Center right on time. Just check your monthly statement for information on how you can sign up for this plan. Here's some more good news. If you decide to continue your education and go back to school for at least half time, you'll see a student deferment that will stay in effect until you finish your studies. And if you teach in an elementary or secondary school, serving a low-income community, the Teacher Loan Forgiveness Program could reduce your total loan balance by up to $17,500. To keep the good news coming, there may also be additional forgiveness programs available if you choose another type of public service work. Be sure to ask your financial aid counselor or visit the Direct Loan Servicing Center website for all the latest and greatest information on any programs that may be available. Going out into the real world means accepting real-world responsibilities and paying back your student loans is one of the most important of them all. We've given you a lot of information in this video, but don't worry about remembering everything. Be sure to ask your financial aid counselor for a copy of this brochure, the Exit Counseling Guide for Direct Loan Borrowers. You'll find all the facts from A to Z inside, as well as information about how to contact the Direct Loan Servicing Center by web, phone, or mail. And while you're talking to your financial aid counselor, be sure to ask for a copy of your borrowers' rights and responsibilities if you don't already have one. It spells out everything you need to know about your student loans. And remember, keep it and any other paperwork related to your loans in a safe place. One thing more. If you move, please be certain to let the Direct Loan Servicing Center know on their website. All the information we've shared with you today is important, but if you take just one thing away from this video, we hope it's this. If you're having trouble at any time making your monthly payments, please get in touch with the Direct Loan Servicing Center. They can't help you if you don't ask and defaulting on your loan isn't good for you or for anybody. So once again, congratulations wherever you're going, whatever you decide to do with your education and your life, please know that everyone at the Direct Loan Servicing Center wishes you the very best out there in the working world. Go get them.