Important Changes to Parent PLUS Loans Starting July 2026

Starting July 1, 2026, there are some significant changes coming to Parent PLUS loans offered through the federal program. These updates affect both current borrowers and families planning to take out new student loans.

For current Parent PLUS borrowers:

To remain eligible for plans like Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), or Public Service Loan Forgiveness (PSLF), your loans must be consolidated and disbursed by June 30, 2026. If loans are consolidated on or after July 1, those repayment options will no longer be available.

Instead, the only repayment option available will be the new Tiered Standard plan, which ranges from 10 to 25 years.

It’s important to note that any loans taken out after July 1 will move all loans into the new payment plan.

Because there is currently a backlog in processing applications, it’s strongly recommended that you begin the consolidation process as soon as possible if you plan to take advantage of existing repayment options. You can find more information here or on the Federal Student Aid website.

For new Parent PLUS loan borrowers:

New limits are being introduced for each student. Loans will be capped at $20,000 per year per student, with a lifetime limit of $65,000 per student.

If you’ve previously used a Parent PLUS loan and plan to rely on one for the upcoming school year, you may be eligible for an exception that allows you to borrow more than the capped amount. To review eligibility requirements, click here.

We understand that these changes can feel overwhelming and confusing. Our Youth and College Support Team is here to help you navigate your options and make informed decisions. If you have questions or need guidance, feel free to reach out at College@trfcu.org.