Well, Mom and Dad, you can officially exhale now. You'll be fine, if you just play it right. Unlike the crisis in the mortgage market, where politicians continue to argue about how to help without actually doing much, Uncle Sam in recent weeks has swooped in with a practical damage-control plan for college borrowers.
If there is a shortage of lenders to dole out federal loans, the Department of Education (DOE) will fill the void. In addition, the feds vowed to thaw the market for securitized federal student loans, agreeing to buy the packaged debt if outside investors don't. That provides plenty of incentive for lenders to get back in the game.
Congress has also taken steps to make sure there's plenty of government money for families to borrow, so you don't have to resort to the pricey private-loan market. Federal-loan limits for students have been raised by $2,000 a year, while the rules on parent loans have been changed to make qualifying for and repaying them easier.
Despite the last-minute save from Capitol Hill, navigating the loan market this year will still be challenging. You may need to find a new lender if your current one is out of the business. And given that Washington's final regulations were announced just two weeks before the unofficial June 1 launch of loan season, there is going to be plenty of scrambling by schools, lenders and the DOE to get everything up and running.
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