By Cierra Putman
ODESSA - Changes are coming for students who apply for federal financial aid. Instead of dealing with banks, students with federal loans will now deal directly with the government.
The changes are part of President Barack Obama's health care legislation, but local students and schools have mixed feelings concerning the new law.
"I have many student loans, I've been taking out loans since my freshman year," UTPB Senior Lori Head, said.
The world of student financial aid is changing but many students say they didn't know the bill President Obama signed Tuesday is cutting out the middlemen in lending.
"I think in many cases that could be good thing," UTPB Junior Reina Quintana said. "(But I'm) going through bank and to me it makes it a little easier going through my bank."
"I just don't like the idea of government having control over the banks," Head said. "And government having that much control over the way things are run."
The law will eliminate bank related extra fees, but local colleges and universities worry about getting their money quickly and dealing with extra work.
"We become basically what the lenders were doing for us previously," Bob Basquez, UTPB Director of Financial Aid, said. "Taking care of the master promissory note and making sure the students get it into the Department of Education and those kinds of things. We will be hiring, I think, another person to help with that workload."
There is some good news, the new financial aid laws will make it easier for people with lower incomes.
Right now, the repayment cap on your salary is at 15 percent. So someone making $20,000 could be spending as much as $3,000 a year just on their student loans. But this new law is going to reduce that to 10 percent so they could end up paying as much as $1,000 less each year.
"I think it will help people," Head said. "With the economy the way it is, people aren't getting jobs. I know with people with PhDs that are out of work and going back to school to retrain for something else. So, if you graduate and six months later you still don't have a decent job but owe $500 in student loans, you're just out of luck."
Overall, most say we'll have to wait before we know if it's change for the better.
The direct lending will begin at all schools starting July 1.
Local universities and colleges tell NewsWest 9, students interested in acquiring a federally backed loan should contact them immediately to learn about the new changes.