Parent PLUS Borrower Options For Repayment And Forgiveness

The huge federal budget bill that is going through Congress will change how parents pay for their kids’ college education. The Senate passed its version of the bill on Tuesday, and the House is expected to pass it by Thursday. Parent PLUS Borrower Options For Repayment 

Sadly, the bill has a big effect on Parent PLUS borrowers, both those who are currently borrowing and those who will borrow in the future.

After July 1, 2026, Parent PLUS loans will not qualify for any income-driven repayment plans. This means that any parent who takes out a new PLUS loan for their child’s education after that date will not be able to use any income-driven repayment plans, such as the new Repayment Assistance Plan (RAP).

Existing borrowers would also face challenges. Parent PLUS loans don’t directly have access to income-driven repayment, but borrowers can consolidate their loans to access Income-Contingent Repayment (ICR). Borrowers must do this by June 30, 2026, or they will permanently lose access to this option. Parent PLUS Borrower Options For Repayment

Here’s what Parent PLUS borrowers need to specifically know.

No Income-Driven Repayment For New Parent PLUS Loans

While Parent PLUS loans don’t directly have access to ICR, there has been a workaround for families. Borrowers could consolidate and enrol in the Income-Contingent Repayment (ICR) plan – the only IDR option available to them. Since ICR is PSLF-eligible, it also allowed parents to qualify for loan forgiveness. Parent PLUS Borrower Options For Repayment

Under the bill that just passed the Senate, that option disappears. Any Parent PLUS loan disbursed on or after July 1, 2026 will not be eligible for consolidation into ICR or access to any other income-driven plan. These loans must be repaid under the new Standard Repayment Plan.

Doing both steps ensures the borrower can enter the amended IBR plan, which continues under the new law for those with loans issued before the 2026 cutoff. Parent PLUS Borrower Options For Repayment

Failing to consolidate in time will forfeit this option permanently. Any new Parent PLUS loans taken out after July 1, 2026 will block borrowers and bar them from using income-based plans for any of their loans.

The latest bill has specific language that makes any loans taken after July 1, 2026 limited to the new standard repayment plan, and the language says that the borrower has to pay all of their outstanding Parent PLUS Loans on that same plan (the Standard Plan).

What Parents Should Do Now

With less than a year until the July 1, 2026 deadline, Parent PLUS borrowers may need to act soon. To preserve flexibility:

• Existing borrowers should stop taking out new Parent PLUS loans if they need ICR or PSLF. Any loan disbursed after July 1, 2026 disqualifies the borrower from all IDR plans.
• Consolidate existing Parent PLUS loans before the deadline.
• Enrol in ICR as soon as eligible. Waiting could increase the risk of losing access if rules or timelines change. Parent PLUS Borrower Options For Repayment

Once in ICR or amended IBR, borrowers can remain on the plan even after the new system takes effect. Those pursuing PSLF will retain access as long as they continue making qualifying payments. Parent PLUS Borrower Options For Repayment

Families relying on Parent PLUS loans to cover tuition gaps should consider other options now, including private loans. Once the bill takes effect, new loans will come with stricter borrowing limits and far fewer protections. Parent PLUS Borrower Options For Repayment