According to the U.S. Department of Education, 8.8 percent of borrowers who started repayment in fiscal year 2009 defaulted on their loans, approximately 320,000 borrowers out of the 3.6 million. Of those who began repayment in 2005, only 37 percent paid on time and in full.

Shauna James, scholarship manager with Student Financial Services, said the economic recession is the largest factor in the rise of default rates. In recent years, tuition rates across the country have increased, while the average family income has not.

Defaulting on a student loan can have serious consequences in the long run. This can include inability to borrow for a car or house, wage garnishment, seizure of tax refunds, or even, in an era when employers increasingly check credit reports, difficulty in getting a job, according to reports.

The number one way to help prevent student loan default is to not borrow more than you will need, said James.

“Keep in mind, these funds will have to be repaid,” James said. “If you don’t need the money, don’t take it out.”

Upon graduation, students are given a six-month grace period to seek employment before beginning repayment of their loans. Two options are available for repayment, which are the standard and income contingent methods.

The current income contingent repayment plan was introduced in July 2009. Borrowers in repayment will pay 15 percent of their discretionary income for their payment for up to 25 years; after that, the remainder can be forgiven.

Workers in public service will also pay 15 percent of their discretionary income, but are eligible to be forgiven of the remainder after 10 years.

After 10 years, or 120 monthly payments, borrowers employed in eligible public service will have their remaining loans forgiven. Such positions include military service, public safety, law enforcement, public health, public education, social work in a public child or family service agency.

“Everyone is eligible for the income-based plan, but only if your income-based payment would be lower than the standard payment,” James said.

In order to begin repayment after graduation, students need to contact their loan servicer. To avoid default, borrowers will need to stay in contact with their servicer.

“They are there to help you and will work with you in making your payments,” James said. “If you are laid off, call and ask ‘What can we work out?'”

To manage current cumulative loan information, students can visit nslds.ed.gov, which provides detailed information on loans.