Time is running out for parents who took out college loans for their children and want to keep affordable repayment and debt-forgiveness options.
Because of new rules on student loans, parents who borrowed federal parent PLUS loans and want to keep monthly payments low need to apply soon to merge the loans into a new loan — a step known as consolidation. That will keep them eligible for a plan that bases monthly payments on their income as well as for loan forgiveness programs.
While the formal deadline for consolidating parent PLUS loans is June 30, it’s much sooner in practice, to allow time to process applications and pay out the loans.
The government, in advice on a Federal Student Aid website, “strongly” encouraged parents who must consolidate their loans to use income-driven repayment plans to apply by April 1.
The ticking clock is one result of a major overhaul of the federal student loan program under the Republican tax and policy law passed last summer.
The deadline comes amid a persistent period of turmoil for student loan borrowers. Just last week, the Department of Education said it would notify 7.5 million borrowers in the generous Biden-era SAVE repayment plan that they must choose a new plan in the coming months or be moved into a more expensive option. Republicans had mounted a legal challenge to the SAVE plan, and a federal court ruling on March 10 ultimately killed it.
What are parent PLUS loans?
Parent PLUS loans are federal loans available to parents of dependent undergraduate students to help pay for college. If loans taken out by the student and other financial aid, like grants and scholarships, aren’t enough to cover the bills, the extra parent loans can help fill the gap.
In recent years, researchers raised concerns that some parents, particularly Black Americans and those with lower incomes, were accumulating burdensome debt under the program. (Some changes in loan rules under last year’s legislation are aimed at discouraging excessive borrowing.)
Unlike most other types of student loans, parent PLUS loans aren’t eligible on their own for income-driven repayment plans, which base payments on a percentage of the borrower’s income. Instead, the loans must first be consolidated into a new, direct student loan.
There were 3.6 million parent PLUS borrowers with loans totaling about $115 billion at the end of 2025, according to statistics from the Office of Federal Student Aid.
If I haven’t applied to consolidate yet, am I too late?
Student loan experts say borrowers should still apply for consolidation, even after April 1. “Their loan might still be consolidated in time,” the financial aid expert Mark Kantrowitz said.
But it’s best to move quickly. “There are no guarantees,” said Megan Walter, a senior policy analyst with the National Association of Student Financial Aid Administrators.
Scott Buchanan, the executive director of the Student Loan Servicing Alliance, an industry group for loan servicers, said the government’s April recommendation was made out of “an abundance of caution” to make sure applications “got in well under the wire.”
While consolidations may normally be completed in as little as a couple of days, “we don’t know what the volume is that is going to come our way,” he said. “If we get a million people applying all at once, that could slow things.”
The Education Department said in an email on Thursday that there “are no current system backlogs impacting consolidation processing.” It said the recommendation that borrowers apply up to three months in advance of the deadline accounts for normal processing steps as well as the possibility that borrowers may need to submit corrections or additional information.
Could the government give parent borrowers more time?
Michele Zampini, the associate vice president of federal policy and advocacy at the Institute for College Access and Success, a nonprofit group, said borrower advocates had urged the Education Department to consider consolidation applications submitted by June 30 — not just those processed by then — to have met the deadline.
“Borrowers don’t have any control over when funds are disbursed,” she said. But, she added, “it seems unlikely they’ll change their approach.”
Betsy Mayotte, the president of the Institute of Student Loan Advisors, a group that offers free advice to borrowers, said such a change would probably require action by Congress because the legislation enacted last year specified that consolidated loans must be disbursed — paid out — before July 1.
What is the process for getting my consolidated parent PLUS loans into an affordable repayment plan?
Assuming the consolidation is completed by June 30, several steps remain, which may be confusing. Borrowers must make at least one payment under the “income contingent” repayment plan, which is currently the only income-driven plan that parent PLUS loans can use. After that, they will be switched to the “income-based” repayment plan, which typically has lower payments and forgives balances remaining after 20 to 25 years. That transition will occur sometime before July 2028, when the income contingent plan is scheduled to be eliminated.
What happens if I can’t consolidate my parent PLUS loans on time?
The loans will be placed in a newly redesigned “standard” federal loan repayment plan, which may have significantly higher payments than income-driven plans, the financial aid administrators group said. The new standard plan, which starts July 1, will offer repayment terms ranging from 10 to 25 years, based on the borrower’s total loan balance. Borrowers with higher debt will generally have more time to pay.
The standard plan isn’t eligible for the Public Service Loan Forgiveness program, which allows loan balances to be canceled after 10 years for borrowers working in many government or nonprofit jobs, like schoolteachers, police officers and librarians. So parent PLUS borrowers who haven’t consolidated their loans won’t be able to benefit from that option, Ms. Mayotte said.
What if I take out new parent PLUS loans after June 30?
Parents should be aware that under the new borrowing rules, anyone taking out new parent PLUS loans after June 30 will have them placed in the revised standard repayment plan. The new loans won’t be eligible for any income-linked options, including the new Repayment Assistance Program, which becomes available July 1. Borrower advocates have warned that the new policy may make payments unaffordable for some parents, leading to more defaults.
That means that if you consolidate your parent PLUS loans but take out new loans after June 30, all of your loans — including the ones consolidated — will be shifted to the standard payment plan, Ms. Walter said.
Ms. Mayotte said a possible workaround, for two-parent families who need to borrow parent PLUS loans after June 30, was to have the second parent take out the loan so the new debt wouldn’t taint the existing debt.
How much can I borrow in parent PLUS loans?
The 2025 legislation set new caps on parent PLUS borrowing starting July 1, for the 2026-27 school year. Parents can borrow up to $20,000 per student per year, with a maximum lifetime limit of $65,000. Previously, parents could borrow up to the amount needed to cover the total cost of attendance.
But there is an exception. If a parent had a PLUS loan issued before July 1, 2026, or if the student had a federal loan issued before that date, the new loan limits don’t apply for up to three years, as long as the student stays in the same program at the same college.
What is the interest rate on parent PLUS loans?
The rate for federal parent PLUS loans is 8.94 percent for loans issued from July 1, 2025, to June 30, 2026. Rates are set each spring for loans borrowed for the next school year, and remain fixed for the life of the loan.
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