Having been a landscaper for several years I am not a fan of loose straw, most of it will be gone after the first wind storm unless you keep it very wet. I would highly recommend the straw blanket if you can afford it. Another option would be to find out what it would cost to have someone come in and hydro-seed it. If you are going to mow it be sure to pull the nylon webbing up before the grass gets too long or you will be pulling it out of your mower blades.

A local pond owner here used loose straw and it all blew into his pond clogging his overflow. The pond then overflowed and eroded his dam. The whole ordeal ended up costing him $$$$ in dam repairs and he had to start over again with his seeding. He used straw blanket the second time around.