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New parent PLUS loan limits
Beginning July 1, 2026, there will be a $20,000 annual cap and a $65,000 lifetime cap per dependent for parent PLUS borrowers. Additionally, parents who borrow under the new PLUS plan will be unable to consolidate their loans and pay them back as a percentage of their income. The PLUS caps, in addition to other changes to federal student loans, are part of the Trump administration’s attempt to curb borrowing for college.
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“Borrowers often don’t realize that the government has extensive power to collect what you owe if you default on federal student loan debt,” said Kyra Taylor, a staff attorney who focuses on student loans at the National Consumer Law Center. “They can garnish your wages, seize a portion of your social security check, and take your tax refund to pay off the debt. And, unlike other forms of debt, there is no statute of limitations. The debt can follow borrowers to the grave.”
Going forward, parents will need to plan accordingly and consider all their options when it comes to borrowing for their student’s education.
“I deeply empathize with the desire to do whatever it takes to send your child to the college of their choice, whatever the cost,” Taylor said. “But, unless you carefully consider whether you can bear the burden of that debt, that choice to take out a parent PLUS loan could haunt you for years and threaten your financial security for decades.”
Comparing parent PLUS and private loans
There are two main loan types available for parents to borrow in order to pay for their child’s school: federal PLUS loans and private loans. Private loans usually have a minimum credit score requirement (typically 600 or higher), whereas PLUS loans have fixed — albeit usually higher — interest rates and minimal fees.
Parent PLUS Loans
Private Loans
Through the federal government.
From banks or other private lenders.
Fixed interest rates and minimal fees.
Possibly lower or higher interest rates, depending on the borrower.
Eligible for discharge if the parent borrower or dependent student dies.
Minimum credit score required and approval is based on credit history.
Fixed amount you can borrow up to.
You can borrow up to the cost of attendance.
Option for income-driven repayment plan.
Fixed monthly payments and no possibility of loan forgiveness.
Next steps for pre-July 2026 parent PLUS borrowers
If you have parent PLUS loans currently and want to keep access to income-driven repayment, you should take the following steps:
Enroll in the Income-Contingent Repayment (ICR) plan.
Make at least one payment.
Enroll in the Income-Based Repayment (IBR) plan.
If you do not move your loans to IBR before July 1, 2026, you will likely be unable to switch to an income-driven repayment plan. If you have a parent PLUS loan that has already been consolidated into a direct loan, you could already be eligible for IBR. Any PLUS loans borrowed after July 1, 2026, will operate under the new repayment model.
“It can take 4-6 weeks for a consolidation application to be fully processed, so borrowers must act fast if they want to have their consolidation loan disbursed before the deadline,” said Taylor. “Borrowers that need to think seriously about this are folks who are struggling to pay their monthly bills right now, as well as folks that know that their incomes may reduce in the future due to retirement, job insecurity, or another reason.”
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If you are not on an income-driven repayment plan, are comfortable with your current parent PLUS loan payments and aren’t worried about future variability to your income, you can remain as you are.
What changes will affect new parent PLUS borrowers?
“Parents should consider what taking out a new parent PLUS loan could do to any other loans they owe,” Taylor said. “If they took out parent PLUS loans and consolidated them to enroll them in the IBR or ICR plan before July 1, 2026, taking out a new Parent PLUS loan would then make that the consolidation loan containing old Parent PLUS loans ineligible for any IDR plan as well.”
When you borrow a PLUS loan going forward, you will automatically be enrolled in the standard repayment plan. The standard repayment plan has a tiered repayment term of 10 to 25 years depending on how much you borrow. It’s recommended that PLUS loans are only taken out after grants, scholarships and other federal loans have been maxed out. If you choose to take out a PLUS loan, be prepared for high interest rates and few repayment options.
How to apply for a parent PLUS loan
Parent’s verified FSA ID.
The requested loan amount.
Your child’s college’s name.
Information about your child.
Your credit information and other details.
Your employer’s information.
If biological or adoptive parents are divorced, each parent can complete an application and take out a PLUS loan for the child. However, the borrowing limit will still apply collectively to both parents.
If you are considering taking out a parent PLUS loan, consider these next steps:
Determine the full cost of your child’s attendance, which can be found on the college’s website.
Confirm all other financial aid sources have been exhausted.
Check your finances and estimate if your income will remain steady for the length of the loan repayment.
Confirm you can save for your retirement and pay down other debts while paying off the PLUS loan.
Consider the private loans available to you.
See if you qualify or could qualify for PSLF.
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