Parents with existing Parent PLUS loans, or those who plan to take out loans under this program in the near future, should be aware that the rules are set to change on July 1, 2026.
Thanks to President Trump’s One Big Beautiful Bill Act, those with existing Parent PLUS loans who don’t consolidate before July 1 of this year will lose their ability to access the income-based payment plans that have helped millions of families afford the repayments for their children’s college debt (1).
At the end of 2025, more than 3.6 million borrowers owed $116 billion in Parent PLUS loans, a program that allows parents of college and university students to take on additional debt in order to pay for their children’s education.
Parents typically take out these loans after their children have exhausted federal Pell grants, direct loans and institutional aid. The debt is also entirely in the parent’s name, not the student’s, according to Brookings (2).
Many families are already struggling to pay back these loans, and these changes could see more families either defaulting on loans or having their access to larger loans restricted, even if they can afford them.
Here’s what you need to know if you’re a current Parent PLUS borrower, or planning to become one in the near future.
While there are plenty of families that use this loan program, many who do so are burdened by the debt.
As Brookings reports, 56% of Parent PLUS borrowers qualify for Pell Grants, which is federal aid that’s only available to families that can demonstrate a significant financial need. This indicates that the majority of Parent PLUS borrowers are families with incomes that are too low to make significant financial contributions to their offspring’s education (2).
Analysis shows that Parent PLUS borrowers who have children that also receive Pell Grants are consistently slower at repaying their loans. In fact, many of these borrowers wind up owing more than the original balance 10 years after taking out the loan because their payments aren’t sufficient enough to cover the accumulating interest.
Research from MarketWatch also shows that Black and Hispanic families struggle disproportionately with this debt. Furthermore, 25% of Parent PLUS borrowers are over 60 years old, and these debt repayments can cut into their ability to save for retirement at a critical time in their lives.
As a result of the financial burden, more than 15% of Parent PLUS borrowers at some point will default on their loan, according to the Education Department (2).
Trump’s One Big Beautiful Bill effectively removes access to Income-Driven Repayment plans for Parent PLUS borrowers who take out a loan, or consolidate their existing loans, on or after the July 1 deadline. It’s also worth noting that this deadline hinges on the day that a loan is consolidated or disbursed, instead of the day that the borrower files their application for the loan.
The program changes also eliminate the potential for most Parent PLUS borrowers to benefit from Public Service Loan Forgiveness, since this forgiveness program typically requires that a borrower is on an Income-Driven Repayment plan.
For parents who are planning to take out a Parent PLUS loan on or after July 1, it’s important for them to understand what their payments will look like under the tiered standard plan, which will be the one plan available to them (2). Depending on the total owed, this plan will assign a payment amount that’s based on a term of between 10 to 25 years, as well as the balance.
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According to MarketWatch, no lower payment options will be available for these borrowers, which means if a family can’t afford the standard amount, the risk of default and delinquency could be significant.
“For example, a parent with $100,000 in Parent PLUS loans who borrows on or after July 1 can expect a payment of around $770 a month for 25 years, and will pay back a total of over $200,000 over that time period,” according to Betsy Mayotte at MarketWatch.
Considering that the average cost of college in the U.S. is $38,270 per year — including supplies, books and daily living expenses (3) — a $100,000 loan doesn’t come close to what many families may need. And that doesn’t even account for the fact that many private colleges could cost double the average stated above, or more.
Future Parent PLUS borrowers should also know that there will be new borrowing caps after July 1; $20,000 per year per undergraduate student, and $65,000 total per student.
If you’re an existing Parent PLUS borrower, you should consider consolidating your loan right away so that you can gain access to Income-Driven Repayment plans for more affordable monthly payments.
In fact, Student Loan Borrower Assistance suggests consolidating your loan before April 1, 2026 in order to be eligible for an Income-Driven Repayment plan (4). According to the Education Department, it can take four-to-six weeks for the consolidation process to be completed, which is why borrowers are encouraged to apply for consolidation by April 1.
It’s also important to note that Parent PLUS loans are not directly eligible for Income-Driven Repayment plans; that’s why it’s important for borrowers to consolidate their loans into a Direct Consolidation Loan before the July 1 deadline in order to receive more affordable monthly payments.
You can apply for consolidation at StudentAid.gov; the consolidation process takes about 30 minutes and you should have your personal details, financial information, loan information and a Verified FSA ID at the ready (5).
If you are planning to make use of the Parent PLUS program later this year or in the near future, it’s time to reassess your plans.
Students are encouraged to file an FAFSA (Free Application for Federal Student Aid) application as early as possible to be considered for financial aid programs including grants, loans, scholarships and work-study funds (6). This can help reduce the debt burden for both students and their parents.
If you still need to apply for a Parent PLUS loan after July 1, know that private loans are also an option for parent borrowers, but these loans often have stricter repayment rules than government loans, even under the upcoming changes.
For parents with younger children that are nearing college age, consider having them take on student loans rather than opting for a Parent PLUS loan, and commit to helping them with repayment. Traditional student loans still have more payment plan options and loan forgiveness flexibility than Parent PLUS loans.
Finally, if you are an existing Parent PLUS borrower but have another child entering college soon, consider taking out the new loan in the other parent’s name so that any current repayment plans are maintained on the older loan.
Some other tips for covering the high costs for college include:
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Lowering tuition cost with Advanced Placement courses: Taking college-level courses in high school can help cut down on the number of classes that students will have to pay for in college. Depending on the school and the student’s score, AP courses can potentially transfer to college credits.
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Apply for private scholarships: As CNBC reports, more than $6 billion in scholarships are handed out to college students every year (7). Upcoming graduates should search online or ask their high school counselor about these opportunities.
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Appeal your FAFSA decision: While many families don’t realize they can appeal for more funds, submitting an appeal letter can be a critical step in securing additional financial support.
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Part time jobs: Whether your child is in high-school or college, a part-time job can help them to cover their tuition and living expenses so that you don’t have to borrow as much to finance their degree.
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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
MarketWatch (1); Brookings (2); Education Data Initiative (3); Student Loan Borrower Assistance (4); StudentAid.gov (5, 6); CNBC (7).
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
