If Parent PLUS loans are part of a your college funding plan, important changes are coming on July 1, 2026.
New borrowing limits and repayment rules could affect how much families can borrow, how they cover a remaining college funding gap, and which repayment options are available later.
Whether you are a student reviewing your financial aid, a parent considering borrowing, or an educator helping someone make a plan, now is the time to find out which rules apply and what steps to take next.
The Main Changes at a Glance
Beginning July 1, 2026:
- Parent PLUS borrowing will generally be limited to $20,000 per academic year and $65,000 total per dependent student.
- The limits apply per student, not separately to each parent.
- New Parent PLUS loans and new consolidation loans will have fewer repayment options.
- Some students who began their current programs before July 1 may qualify for a temporary exception to the new borrowing limits.
Here is how to prepare.
1. First, Find Out Which Rules Apply to the Student
Not every student or Parent PLUS borrower will be affected in the same way.
Students may qualify for a temporary exception if they:
- Were enrolled in their current program by June 30, 2026; and
- Had a federal Direct Loan disbursed for that program before July 1, 2026.
A parent does not necessarily need to have previously borrowed a Parent PLUS loan for the student to qualify. A Direct Loan received by the student for the current program may be enough to establish eligibility.
What to do now
Contact the school’s financial aid office and ask:
- Does the student qualify for the temporary loan-limit exception?
- Which loan disbursements are on record for the student’s current program?
- How long will the exception remain available?
- Would a change in the student’s program or enrollment affect their eligibility?
Do not assume that previous borrowing automatically means the old rules will continue. Ask the school to confirm the student’s status.
2. Understand the New Parent PLUS Borrowing Limits
For students who do not qualify for the temporary exception, Parent PLUS borrowing will generally be capped at:
- $20,000 per academic year, per dependent student
- $65,000 total, per dependent student
These limits are shared across all parents who borrow for the same student. They are not separate limits for each parent.
Previous Parent PLUS borrowing for that student may also count toward the $65,000 total—even if some of the debt has already been repaid, forgiven, canceled, or discharged.
The actual amount a parent can borrow may also be lower than $20,000. Parent PLUS eligibility is based on the student’s cost of attendance after other financial assistance has been subtracted.
Calculate the remaining funding gap
Use this basic formula:
Total cost of attendance
– Grants and scholarships
– Student federal loans
– Savings, earnings, and other resources
= Remaining funding gap
For example, if the remaining gap is $28,000 and the new Parent PLUS limits apply, Parent PLUS may cover no more than $20,000. The student and family would still need a plan for the remaining $8,000.
Remember to use the school’s full cost of attendance, not only tuition. This may include fees, housing, food, books, transportation, supplies, and other eligible education expenses.
3. Make a Plan Before Turning to Additional Loans
A Parent PLUS cap does not automatically mean private loans are the only next step.
Before borrowing more, students and families should:
- Review the financial aid offer carefully. Make sure all grants, scholarships and federal student loans are included.
- Contact the financial aid office. Ask about institutional grants, special-circumstance appeals, professional judgment reviews, emergency aid and payment plans.
- Continue searching for scholarships on Red Kite. Prioritize scholarships tied to the student’s school, major, community, employer, activities, background or career plans.
- Review ways to lower the total cost. Housing choices, meal plans, transportation, textbooks and optional fees can all affect the final gap.
- Compare additional loan options carefully. If a private student or parent loan is still necessary, look beyond the advertised interest rate. Compare:
- Fixed versus variable interest rates
- Fees
- Monthly payment estimates
- When repayment begins
- Total repayment cost
- Cosigner requirements and release policies
- Deferment and hardship options
Borrow only what is needed to close the verified gap, not automatically the maximum amount offered.
4. Existing Parent PLUS Borrowers Should Review Repayment Options Immediately
Parent PLUS loans are not directly eligible for income-driven repayment plans. Before the new rules take effect, borrowers may be able to consolidate eligible Parent PLUS loans into a federal Direct Consolidation Loan to access certain income-driven options.
However, the timing is critical.
To preserve access to the current income-driven repayment pathways, the new consolidation loan must be fully processed and disbursed no later than June 30, 2026. Submitting an application by the deadline is not enough.
Because the deadline is now extremely close, borrowers who have not completed consolidation should contact their federal loan servicer immediately.
Questions to ask the loan servicer
- Has my consolidation loan already been disbursed?
- Is there still any possibility of completing the process before June 30?
- Which repayment plans would my loans qualify for?
- How would consolidation affect my interest, loan benefits or forgiveness strategy?
- If I work for an eligible public-service employer, how could this affect Public Service Loan Forgiveness?
Consolidation is a major financial decision and generally cannot simply be reversed. Review the effects before moving forward.
5. Some Current Students May Keep the Previous Borrowing Rules Temporarily
Students who meet the temporary-exception requirements may remain under the previous Parent PLUS limits for their expected time to complete the current program.
This period is limited to the shorter of:
- Three academic years; or
- The remaining published length of the student’s current program.
During that period, an eligible parent may continue borrowing up to the student’s cost of attendance minus other financial aid.
The exception is connected to the student’s current program and remaining time to completion. Students should confirm their status with the financial aid office before changing programs, withdrawing or making other major enrollment changes.
6. Do Not Miss the June 30 FAFSA Deadline
June 30, 2026, is also the federal deadline to submit the 2025–26 FAFSA.
This deadline applies to aid for the 2025–26 academic year. It is separate from the 2026–27 FAFSA, which is already available.
Students who attended during the 2025–26 year and have not submitted that FAFSA should act immediately. Although many state and school priority deadlines have passed, submitting by the federal deadline may still provide access to eligible federal aid.
Students who already submitted a FAFSA but discovered an error should log in, review their FAFSA Submission Summary and make any needed correction as soon as possible. Correction and verification timelines can vary, so contact the school’s financial aid office for guidance.
Final Thought
These changes are significant, but students and families still have options. Start by confirming which rules apply, calculate the actual amount needed and work through the least expensive funding sources first.
Red Kite can help students find scholarships that match their profile, organize opportunities into personalized Lists and keep track of upcoming deadlines. Log in, update your profile and begin building a scholarship plan that can help reduce the amount your family needs to borrow.
