Graduation. It's that magical time when college students can look forward to freedom. No more classrooms, assigned readings, papers or tests, and just generally more free time. But you can get too much of a good thing. The class of 2009 may have excess free time on their hands, as they face significant challenges in landing that dream job post-graduation.

According to data from the National Association of Colleges and Employers, hiring of new college graduates this year is expected to be down 22 percent from a year ago. For graduates with student loan payment looming (the average undergraduate leaves college with more than $22,000 in student loan debt), the prospect of having to settle for a lower-than-expected salary be unable to find employment at all could instill panic.

The good news is that, believe it or not, the government was fairly savvy in building the federal student loan program and Congress has put many remedies in place to help college students enter the real world. The trick is to be an educated consumer. So whether you’re about to graduate or are already facing unemployment (or under-employment) in the working world, take a deep breath, read on, and above all else, don’t panic!

“Grace” is a wonderful thing. First things first – know when your payment begins. You don’t have to start repaying your federal student loans until at least six months after your graduation date. This is called the “grace period.” It’s your responsibility to make sure that your student loan company has your updated address and contact information after graduation. If you don’t receive a bill because they can’t find you, you’ll be held responsible for any late payments. Don’t know how many loans you have or where to send payment? Check out www.nslds.ed.gov for a complete listing of your federal loans.

You have options. Many federal student loan borrowers don’t realize they can choose from a variety of repayment plans. When your loan first enters repayment, you will be automatically enrolled in the standard repayment plan, which is a 10-year repayment term. But there are other options you can take advantage of, from extending your repayment term so that monthly payments are lowered, to payments based on your income (note that a new income-based repayment plan becomes available this July), to a “graduated” schedule, where payments start off smaller and grow over time as your salary is anticipated to rise. Know that some of these plans will increase the total amount of interest you pay over the life of your loan. But for some, these types of plans are good debt management tools that allow you to fit student loans into your budget, rather than get into deep financial trouble by defaulting on a federal debt (more on that later). Talk to your student loan company (i.e., lender or servicer) about all of your options.

You can postpone payment. If you really can’t make payment on your student loans, you do have the option of deferring payment until you get back on your feet (a nice perk that doesn’t exist in other forms of consumer debt). In some cases, the interest on your loan will accrue when you put off payment, so your loan will end up being more expensive in the long run. As an educated consumer, you’ll have to weigh this cost into your decision. But again, more interest may be a suitable tradeoff if you’re facing student loan delinquency or default. Also, the type of postponement plan you are eligible for will depend on your unique circumstances (unemployment and a return to school are just two examples) – check with your student loan company to see if you qualify.

Your debt may be forgiven (but emphasis on “may”). Some student loan borrowers who go on to be teachers serving in a low-income or subject-matter shortage area may be eligible for loan cancellation or “forgiveness.” Ask your student loan company if you qualify, or you can find out more at the U.S. Department of Education’s website. There’s also a relatively new loan forgiveness program for public service employees, but it serves as more of a “light at the end of the tunnel” for recent college grads. If you enter a lower-paying public service profession and stick with it, after making 10 years of student loan payment, your remaining balance of principal and accrued interest will be wiped off the books. There is one catch – to be eligible, your federal student loan had to come directly from the government as a “Direct Loan,” rather than through a private lender (commonly known as a Federal Family Education Loan). But never fear, FFELP borrowers – to become eligible for this program, you just have to consolidate your FFELP loans into the Direct Loan program.

Raise your hand. Defaulting on a federal debt can have some seriously nasty consequences, including a ruined credit record, wage garnishment and seizure of tax refunds. And you’ll lose any ability to take advantage of all the flexible repayment options outlined above. As I hope this article has illustrated, though, there are numerous ways to avoid default, or even delinquency for that matter. The number one thing to remember is that your student loan company can’t help you find the right solution unless you raise your hand and tell them you’re having difficulty repaying (or you anticipate having difficulty). No one wants to talk about their financial problems. Just know that your student loan provider is sincerely interested in your success and raising your hand early will allow them to provide you with the broadest number of options.

One final note: all of the options discussed here apply only to federal student loans (those funded and/or backed by the federal government). Private student loans come from private banks or lending institutions and do not offer the same repayment options. If you don’t know whether you have private or federal loans, ask your college financial aid office or the company who handles your repayment. In general, though, the same rules apply: Your private student loan company may still be able to help you find a payment solution, but they can’t do so unless you tell them there’s a problem. Maintaining contact with your student loan service provider is crucial to keeping your payment on track during these harsh economic times.