Student loan Parent PLUS borrowers face forgiveness deadline
Consumer advocates are warning that parents who took out student loans for their children’s education could be excluded from affordable repayment plans and loan forgiveness programs in the coming months unless certain steps are taken soon.
“I feel so much anxiety parents about losing access to income-driven repayment plans,” said Kathleen Boyd, a certified financial planner and founder of Student Loan Savvy in San Diego.
The Parent PLUS federal loan program allows parents to borrow money on behalf of dependent undergraduate students.
Due to the passage of President Donald Trump’s One Big Beautiful Bill Act last year, Parent PLUS borrowers will no longer qualify for IDR plans starting in July. IDR plans limit eligible borrowers’ monthly bills to a portion of their discretionary income and result in student loan forgiveness.
“We are concerned that after July 2026, thousands of Parent PLUS borrowers who would otherwise be eligible for IDR plans and forgiveness will not take appropriate action and will be forced to repay loans under a plan they cannot afford,” said Nancy Nierman, deputy director of the Education Loan Consumer Assistance Program in New York.
About 3.6 million people have Parent PLUS loans, putting total debt at more than $116 billion, according to analysis by higher education expert Mark Kantrowitz. The typical parental balance is around $32,000.
Here’s what parent borrowers need to know about protecting their relief options.
How are parental repayment options changing?
Starting July 1, Parent PLUS borrowers will be offered a single option to repay their debt: the new Standard Repayment Plan. Under The Standard Plan, Trump’s “big beautiful bill,” would spread a borrower’s debt across fixed payments over one of four time periods, depending on the amount of debt.
In its current form, the plan envisages a 10-year maturity for all borrowers.
Under the revised plan, only borrowers with balances up to $24,999 will have a 10-year repayment period. Those who owe between $25,000 and $49,999 will pay it back in 15 years; Balances ranging from $50,000 to $99,999 will be repaid within 20 years; and loans of $100,000 or more will have a 25-year repayment period.
Due to longer repayment periods, borrowers will pay significantly more interest under the new program.
Too often, parents risk jeopardizing their own financial future by taking on debt for their children’s education, Boyd said. Having only one repayment option can make the problem worse.
“A standard depreciation payment can be very difficult to meet, especially if they are approaching retirement,” he said.
Consolidate before April to ensure IDR access
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If borrowers receive Parent PLUS loans in the so-called Direct Consolidation Loan Nierman said they can now maintain access to IDR options.
The consolidation process, which involves packaging your federal loans into a new loan, usually takes four to six weeks, Nierman advises borrowers. Submit your requests At studentsaid.gov no later than March 31.
If you’ve already consolidated your Parent PLUS loans, you now have a Direct Consolidation Loan and therefore more repayment flexibility, “so you’re generally not in a group with deadline pressure,” Boyd said.
During the consolidation application process, parents must choose Income-Contingent Repayment Plan and make at least one payment under this program, he added.
After that, you should be able to switch to an Income-Based Repayment plan, which will likely result in the lowest monthly payment, Nierman said. This is the process required by the Ministry of Education in interpreting the new law.
If you’re in default on a Parent PLUS loan, he said, requesting consolidation will bring you back to the current status and preserve your IDR plan and loan forgiveness options.
Current parent borrowers should plan ahead
Parent borrowers who currently have students at the university will need to think ahead.
If you take out new Parent PLUS loans on or after July 1, 2026, you will lose IDR access and must repay your student debt in the new Standard schedule. After this date, consolidation will not be of any use to you.
Parent PLUS borrowers will also face a new annual loan limit of $20,000, with a lifetime limit of $65,000 starting in July. Currently, parents can borrow up to their child’s care costs, excluding other benefits, and there is no total limit.
