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Recent changes to federal student loan programs under the One Big Beautiful Bill (OBBB) have significantly altered repayment options for new and existing Parent PLUS loans. These changes could have serious financial consequences for families if not understood and addressed promptly.
Previously, parents who borrowed Parent PLUS loans had the option to consolidate and enroll in the only Income-Driven Repayment (IDR) Plan available to Parent PLUS borrowers, the Income-Contingent Repayment (ICR) plan. This plan offers:
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Payments based on income (sometimes as low as $0 per month)
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A monthly payment cap at 20% of discretionary income
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A path to eventual loan forgiveness
The protection to consolidate and enroll in the ICR plan is no longer available for new Parent Plus loans and existing Parent Plus loans after June 30, 2026. Under the new rules, Parent PLUS borrowers will only have the newly Tiered Standard Repayment Plan-with fixed monthly payments based on the total amount borrowed.
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Parent PLUS loans can be as high as $65,000 per student and many parents already owe more than $100,000.
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When applying for a Parent PLUS Loan, families are not assessed on their ability to afford the payments—only on whether they have an adverse credit history.
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Without income-driven repayment, families who cannot afford large monthly payments risk:
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Damaged credit scores
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Wage garnishment
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Tax refund and Social Security withholding
If you already have Parent PLUS loans, consolidate your Parent PLUS loans before June 30, 2026.
- The consolidation has to be processed, approved, and funded by June 30, 2026 to remain eligible for IDR plans, like ICR.
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Apply as soon as possible to ensure adequate processing time. Consolidation application processing times will vary and may be longer than usual.
Families who act quickly may still benefit from existing repayment options before they disappear.
Working with your loan servicer to consolidate and enroll in the ICR plan will protect borrowers with existing Parent PLUS loans. However, even if these steps are taken, all new Parent PLUS loans are subject to the limited repayment options under OBBB. This means that if you borrow a Parent PLUS Loan on or after July 1, 2026, even if you have previous PLUS Loans, the new Parent PLUS Loan features the new repayment rules.
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Review your potential repayment amounts carefully and remember that additional years of borrowing may be necessary.
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Use the Department of Education's Loan Simulator to calculate payment amounts using your total projected PLUS Loan amount. (A tutorial video is available to help navigate the loan simulator tool linked above.)
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Consider the long-term impact on your family’s finances.
- Remember that it is the legal responsibility of the parent to repay a Parent PLUS loan.
For more details about changes to the Parent PLUS Loan, check out the Parent PLUS Loan Resource web page.
Download a digital flyer with quick facts on this change.
Review OBBB Act updates and loan borrower scenarios provided by Federal Student Aid.
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