Changes made by the Health Care and Education Reconciliation Act of 2010 to federal loans came as a surprise to me. I didn't know that the Health Care and Education Reconciliation Act of 2010 has thoroughly eliminated FFELP loans.
This was quite a hassle because I had already inquired and consulted with the school and my family about either applying for a subsidized loan or a Stafford loan last year in preparation to help bridge school payments (with which I am having a hard time right now) for my son. After being given the choice of either a Direct Federal Loan or Private Loan, for me, the most obvious choice now is through a Direct loan from the government instead of a private loan.
One of the reasons why I shy away from private lenders is because of the asterisk that they place on contracts (I am a bit paranoid about contracts since credit card companies have conned me a few times already) which might mean additional terms and agreement in one hidden page in the contract as private companies need to squeeze their creditors one way or the other. Their only concern, in my opinion, is to their projected net profits and not through the thought of really helping people and understanding what they are currently facing.
Now what if I couldn’t pay the loan on time?
With that being said, the government loan is a tempting option since new laws might come in to protect and help delinquent people. Borrowing from the government is fast (half an hour, as was stated from the site here) and stable as they will not just drop you in instances when you can’t pay on time.
So even if the college chosen by my son is higher in costs than the amount given by the government, I’d rather borrow that bridging money from friends or relatives as I do not want to opt for private loans as the hassles involved is a tad too much for regular workers like me whom are constantly looking for part time work after my regular work ends. Some people I know are switching lenders in order to pay for another bill, which for me, isn’t worth the juggle as I don’t have the time for that.
In any case, sorry for the long comment. Got too carried away!
