Several options can help if you're struggling to pay student loans

— -- When money is tight and jobs are scarce, repaying your student loans is painful. But if you let your loans go into default, you'll enter a world of hurt.

Defaults on federal student loans rose to 6.7% last year from 5.2% a year earlier, the highest default rate since 1998.

In general, if you fail to make payments on a federal student loan for nine months, the loan will be considered in default. Your loans will probably be turned over to a collection agency, and your credit report will be trashed. Unlike private lenders, the federal government can garnish your wages without going to court, says Margaret Reiter, an attorney and co-author of Solve Your Money Troubles. There's no statute of limitations on collection of federal student loans, Reiter adds, which means the government can go after you for the rest of your life.

Filing for bankruptcy probably won't solve your problem. Under federal bankruptcy laws, it's not enough to show that you can't afford to repay your loans now. You must also convince the bankruptcy court that you'll be unable to repay them in the future. This standard is extremely difficult to meet, Reiter says.

Fortunately, there are steps you can take to avoid default, even if you can't afford your payments. Options include:

• Deferment. This option is available for borrowers who are still in school, unemployed or experiencing other types of economic hardship. Payments are typically deferred for up to three years.

If you have subsidized federal student loans, which are provided to borrowers who demonstrate financial need, the government will pay the interest during deferment. If you have unsubsidized Stafford loans, interest will accrue during the deferment period. Deferment is not automatic. You must apply for it through your lender.

• Forbearance. In this case, your lender will allow you to postpone payments, or pay a smaller amount, for up to three years. Forbearance is granted at the discretion of the lender, and the requirements are generally less stringent than those for deferment, says Robert Murray, spokesman for USA Funds, a company that guarantees student loans.

Interest will continue to accrue during forbearance, so it's important to resume payments as soon as you're able, Murray says. Otherwise, you could end up with a much larger balance.

• Income-based repayment. This new program allows borrowers with federal student loans to have their payments capped, based on their income. Most borrowers who qualify for the program will never have to spend more than 10% of their income on student loan payments. Those whose income falls below 150% of the poverty level won't have to make any payments.

Deferment or forbearance will help you put your loans on hold during a short-term crisis, such as temporary unemployment, says Lauren Asher, acting president for the Project on Student Debt. But if you're facing long-term financial difficulties, income-based repayment is the better choice, she says.

To apply for income-based repayment, contact the lender that is servicing your student loan. You can learn more about the program at www.ibrinfo.org.

Borrowers who are having trouble repaying private student loans have fewer options. The rules governing repayment of these loans are determined by the loan contracts, not federal law. That means private-loan borrowers "are really at the mercy of lenders," says Deanne Loonin, staff attorney for the National Consumer Law Center.

Your loan may be declared in default after you miss just one payment, depending on the terms of your loan contract. Private lenders aren't required to allow borrowers who are unemployed to defer payments. Your lender may grant you forbearance, but the period depends on the terms of the contract, Loonin says.

Private lenders don't have as many collection tools as the federal government, but they can still make your life pretty miserable. They can turn your account over to a collection agency and add the fees to your balance. They can sue to have your wages garnished. And private student loans are identical to federal loans in one critical respect: They're nearly impossible to discharge in bankruptcy.

The National Consumer Law Center offers a list of resources for borrowers who are having trouble managing their federal or private student loans. You can find it at www.studentloanborrowerassistance.org.

Sandra Block covers personal finance for USA TODAY. Her Your Money column appears Tuesdays. Click here for an index of Your Money columns. E-mail her at: sblock@usatoday.com. Follow on Twitter: www.twitter.com/sandyblock