In my latest column about student loans, I focused on changes coming to the outstanding loan burden for graduates. But parents who have taken out Parent Plus loans also have some critical deadlines as a result of changes made by the Department of Education. Starting July 1, 2026 you lose ALL of your options to lower your monthly payments — except by refinancing privately.

For many years, I advocated against Parent Plus loans – except as a last resort. They carried the highest interest rate every year, as well as additional distribution fees that added to the overall cost. And for a long time, there were few ways to reduce payments.

But in recent years, parents could take advantage of loan consolidation and income driven repayments on their Parent Plus loans. Soon all of that will soon come to an end. Student loan expert, Rae Kaplan of FinancialRelief.com says parents need to act quickly both to deal with their existing Parent Plus loans – and to revise their plans for paying for college for their children.

Parent Plus Loans Need Immediate Attention
Parents with existing Plus loans face the same July 1, 2026 deadline facing student loan borrowers, says Kaplan.

These parent borrowers must immediately consolidate all their Federal Parent Plus loans – and enroll in an Income-Driven Repayment (IDR) plan, such as the Income Contingent Repayment (ICR), before July 1, 2026.
After that date, those who are not already enrolled in an Income Driven Repayment plan will be locked out permanently.

Then their only repayment option will be the Standard 10-Year Plan: which carries large monthly payments, often as high as a mortgage.

There are two other big changes to the Parent Plus loan program.

Loss of Public Service Loan Forgiveness (PSLF) Eligibility for New Parent PLUS Loans
Even worse, parents taking out new Parent PLUS loans on or after July 1, 2026 will find that these new loans will not be eligible for Public Service Loan Forgiveness—even if the parent works in government or municipal roles, public schools. Hospitals, nonprofit clinics, or police, fire, or military service jobs.

That is a big change from previous rules which allowed parents an opportunity to pay off those loans after making 120 lower qualifying payments and submitting the necessary forms. Now longer will they have the option of making lower monthly payments based on income. Their only Parent Plus repayment options will be limited to RAP or the standard 10-year plan.

New Caps for Future Parent PLUS Loans
If you were counting on using Parent Plus loans for future borrowings, you need to be aware of some big changes.
Starting July 1, 2026, Parent PLUS loans will be capped at $20,000 per year, or a total of $60,000–$65,000 total per child.

Many private and out-of-state public colleges charge more than $50,000 per year in tuition, room, and board. So families will need to explore alternative financing, such as private loans with low, fixed interest rates, Scholarships, and work-study opportunities.

It will become more difficult to borrow for college, potentially impacting your child’s school of choice.

Changes for Grad Students, Too
Currently, Grad students can currently borrow up to the full cost of attendance via Grad PLUS loans. But after the July, 2026 Grad PLUS loans will be eliminated. And Federal borrowing will be capped at $20,500/year for masters programs – with a lifetime $100,000 limit.

Law and Medical School borrowing limits are higher at $50,000 per year or a $200,000 lifetime limit.

It could be argued that these new loan limits will do students a favor – keeping them from being saddled with huge debt burdens. But a career in law or medicine could potentially justify that huge borrowing need. In the future, students will be forced to turn to private student loans, which lack income-driven repayment and do not offer federal forgiveness programs.

The landscape is changing for student loan borrowers – past and future. Please see my recent column with advice for students currently in some of the payment plans that will be eliminated in July, 2026.
And parents and grad students need to start dealing with their existing loans and future borrowing hopes right now. That’s the Savage Truth.