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CONGRATULATIONS, MEMBERS

of the Class of 2012: Your college diploma is safely in hand. Unfortunately, you may also be holding the bag for thousands of dollars in student loans. According to the Project on Student Debt, the average debt among students who borrowed was $25,250 in 2010.

If you have federal student loans, you don't have to start paying them back right away. With Stafford loans- offered through the Federal Direct Loan program or the now-defunct Federal Family Education Loan (FFEL) program -- you have a six-month grace period before repayment. With Perkins loans, you have a nine- month grace period.

Use the grace period to find out what your monthly loan payments will be and what your options are. Start with the calculators at Student Aid on the Web (www.studentaid.ed.gov), a site put up by the Department of Education. Check your payments under the standard ten-year repayment program, and then consider the following plans.

Consolidation. This program lets you combine all your federal loans into one loan and extend repayment for as long as 30 years, which will lower the monthly payments (but at a higher total cost because you are paying more interest). For more information, see www.loanconsolidation.ed.gov.

Extended repayment. If you have at least $30,000 in loans, you can stretch out the monthly payments for as long as 25 years without having to consolidate.

Graduated repayment. This plan has you start with a lower payment that increases every two years over a ten-year period. You pay less interest initially but more over the term of the loan than you would with standard repayment.

Income-based repayment. If you have high debt relative to income, you qualify for reduced monthly payments. Any remaining debt is forgiven after 25 years. Public service employees may qualify for loan forgiveness after ten years (see www.ibrinfo.org).

Income-contingent repayment. This plan is similar to income-based repayment but uses a less generous formula to determine the monthly amount. It's available only to borrowers with Staffords issued through the Federal Direct Loan program.

Income-sensitive repayment. With this plan, available only to borrowers with Staffords issued under the FFEL program, payments increase (or decrease) as your income does. The maximum repayment period is ten years.

Other options. Deferment lets you take a break on paying, generally in one-year increments, for up to three years total. The feds pick up interest on subsidized loans but not on unsubsidized loans. Forbearance also lets you postpone repayment for up to three years, but the interest builds on both subsidized and unsubsidized loans.

BORROWERS HAVE A SIX-MONTH GRACE PERIOD ON REPAYMENT OF STAFFORD LOANS.

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By Cameron Huddleston

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