Thanks to the Affordable Care Act of 2010, there’s good news for college-bound students and their parents. Federal loans will no longer be administered by banks, as of July 2010. The government will distribute financial aid directly, and borrowers can expect to save more money while preserving their credit scores, according to the Chicago Sun-Times.

“Those tuition bills will come with regularity,” wrote Sun-Times columnist Terry Savage. “Parents need to look beyond the first check they must write and make a plan for the entire four years.”

Of the changes made, the Chicago Tribune notes that the annual interest rate of the federal Stafford loan has dropped from 5.6 to 4.5 percent. The government will also subsidize loans to students whose financial aid applications show that they don’t have the money or scholarships needed to afford the cost of tuition not covered by the loan.

The Tribune reports that borrowers who took out loans before July have the option to consolidate their loans with the government and sign up for an income-based repayment plan. Payments will then be capped at 15 percent or less of the borrower’s income. A feasible repayment plan can help borrowers make loan payments in a timely manner and maintain solid credit histories.

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