The ink is barely dry on college diplomas, but the clock is ticking on the six-month grace period for federal student loans. Recent college graduates are reminded that repayment on their federal student loans will begin in November.

New grads are encouraged to review their loan repayment options and their rights and responsibilities as borrowers. The New York State Higher Education Services Corporation (HESC), the State’s financial aid agency that helps people pay for college, offers guidance in preparation for repayment at its website, HESC.ny.gov.

Keep Track of Your Loans
Know who holds your federal loans and how much you owe. The National Student Loan Data System (NSLDS) provides a full history of your federal student loans, including your loan balances, names and addresses of your loan holders and colleges attended.

Access your free credit report, especially if you have any private student loans. The report displays all your loans and credit card debt, if any. AnnualCreditReport.com is the official website to obtain your free annual credit report.

Use HESC’s loan tracker to help keep an accurate record of your loans, both federal and private and keep copies of your master promissory notes (MPN) and other important paperwork together.

Review the available repayment plans
When it's time to start repaying your student loans, you can select a repayment plan that’s right for your financial situation. Generally, you'll have from 10 to 25 years to pay your loan, depending on the repayment plan you choose:

Standard repayment
Pay a fixed amount each month. The minimum monthly payment for this option is $50 and the loan must be repaid within ten years. This is the most cost effective plan as it minimizes the amount of interest you will have to pay.

Graduated repayment
Graduated repayment starts out with low payments that increase over time. You must repay the loan within 10 years and the minimum payment must cover the interest that accrues on your loan between payments. This plan is more expensive than the Standard plan; more interest accrues early in repayment, which makes the loan balance (or principal) decrease at a slower rate.

Extended repayment
Extended repayment is for borrowers who owe a minimum of $30,000 within a specific federal student loan program. Payment amounts are either fixed or graduated and can have a maximum repayment period of 25 years. This plan is generally more expensive than the Standard plan because the loan balance decreases more slowly while interest continues to accrue.

Income Based/Income Contingent/Income Sensitive or Pay As You Earn Repayment Plans
Each of these plans are based on when the loan was originally made, whether it was made under the Direct Loan or the Federal Family Education Loan (FFEL) Program and whether or not you have a financial hardship. You may have 10, 20 or 25 years to pay, depending on which plan is used and payments are determined annually, based on your current financial circumstances. Some plans allow a portion of the remaining balance to be forgiven after the maximum loan period, but you may have to pay income tax on any remaining balance at that time.

Consider making additional payments
You can prepay part or the entire loan principal at any time without penalty, saving you money on interest. You should request in writing asking your lender to apply any additional payments to the loan principal.

Most lenders and servicers offer online payments or automatic deductions from your checking account and may offer an interest discount if you agree to use these services. Check with your lender or servicer for details.

Take time now to review all of your repayment options at the Federal Student Aid website so you’ll have a plan before you begin repayment.

Make and stick to a budget
Developing a personal budget will help you live within your income and manage your payments. There are a number of online tools available to help establish your budget or, use the interactive budget builder found at HESC.ny.gov. Remember to meet your “needs” before your “wants” and revisit your budget regularly to make adjustments as necessary.

 Keep in Touch
Remember to notify your lender in writing if you change your name, address or phone number, so that important notifications and information can be sent directly to you.

What if You Can’t Pay?
Unemployment, illness or other circumstances may be creating repayment problems, but ignoring your student loans will create a more serious situation later.

 If you fail to pay on time, your loan is delinquent. If you stay delinquent, your loan defaults and the entire balance is due. Don’t let payment problems get out-of-hand…work with your lender at the first sign of difficulty. You have options:

• You may be able to switch your federal repayment plan to an income based plan to lower your payments, or
• You may be eligible for a deferment, which delays payment, or
• Your lender may agree to a forbearance, which may temporarily suspend or reduce your payment.

 Managing your student loan intelligently is an important step in meeting your obligations, establishing a good credit history and safeguarding your financial future.

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About HESC: HESC is New York State’s student financial aid agency that helps people pay for college and a national leader in providing need-based grant and scholarship award money to college-going students. At HESC’s core are programs like the Tuition Assistance Program (TAP), numerous state scholarships, federal college access grants and a highly successful College Savings program. HESC puts college within the reach of hundreds of thousands of New Yorkers each year through programs like these and through the guidance it provides to students, families and counselors. In 2011-12, HESC helped more than 424,000 students achieve their college dreams by providing more than $971.5 million in grants, scholarships and loan forgiveness benefits, including $920.1 million awarded through the Tuition Assistance Program (TAP).