Is your child applying to college and you’re stretched for funds? Even with generous financial aid, many families need help covering costs.
One option is a Federal Direct Parent PLUS loan. These government-backed loans are available to parents and legal guardians of undergraduate students enrolled in college at least half-time.
If your child is applying to college and you need help covering the cost, you may want to consider taking out a Parent PLUS loan. But before you borrow, it’s important to understand that Congress recently overhauled the Parent PLUS program. For most new borrowers, loan limits are lower and several borrower protections are no longer available.
Which Parent PLUS Rules Apply to You?
Congress passed the One Big Beautiful Bill Act in July 2025. Among many things, this massive tax-and-spend bill overhauled the student loan system. The new Parent PLUS loan rules took effect on July 1, 2026.
Under the old Parent PLUS loan program, parents could borrow any amount up to full cost of attendance for a given academic year minus the amount of aid their student received for that same academic year. Parents also enjoyed borrower protections, including the ability to enroll in an income-driven repayment plan or to apply for key federal loan forgiveness programs.
If you have a student in college now, and either they took out a Federal Direct Student Loan or you took out a Parent Plus loan to help pay for the cost of attendance at that school, you are “grandfathered in” to to the old rules — meaning you may take out Parent Plus loans under the old, more generous rules for three more academic years or until your child graduates, whichever comes first.
New Parent PLUS Loan Limits
If your student first entered college during the 2026-27 school year or later, the Parent PLUS program is more restrictive and offers fewer borrower protections. Under the new rules:
- Parents may borrow up to $20,000 per child per year, with a lifetime cap of $65,000. That’s still a lot of money. But it won’t go far if you are considering colleges with a high cost of attendance.
- You can only pay back these loans using the government’s standard repayment options. The income-driven Repayment Assistance Plan, or RAP is only available to student borrowers.
- Parent PLUS borrowers are not eligible for the Public Service Loan Forgiveness (PSLF) or other federal loan forgiveness programs available to students.
Is your student finishing up their college list? Try to include a few colleges that offer deep discounts. And make sure everyone is on board with your family’s final college budget.
This is the moment to talk about school costs and have an honest conversation about what your family can afford. As your student builds a college list, include schools with lower tuition and that offer generous financial aid or merit scholarships, and make sure everyone is on board with your family’s budget.
Ten Facts About Parent PLUS Loans
1. Even though the Parent PLUS loan is taken out to help a student pay for college, it is the parent or guardian — not the student — who will be responsible for the loan repayment.
2. Before you apply for a Parent PLUS loan, your child must complete the FAFSA.
3. You, the parent or guardian, will need your own Federal Student Aid ID (FSA ID). You may have an FSA ID already if you completed a FAFSA for your child. You will use that same FSA ID for your Parent PLUS loan.
4. The loan is disbursed to the college — not the borrower. Just like a Federal Direct student loan, money borrowed through a Parent PLUS loan is sent directly to the college. The borrower never receives any of the money from the loan. If part of the loan is meant to support your student’s books or personal expenses, the college will move that money into your student’s account.
5. Parent PLUS loans have a fixed interest rate, meaning the interest rate remains the same for the life of the loan.
6. Parent PLUS loans are not subsidized. The federal government does not pay the interest on the loan while your child is in college. The borrower pays the interest.
7. Once the loan is fully disbursed to the college, interest begins to accrue and you’ll be required to make your first loan repayment within 60 days to your assigned loan servicer. The federal government contracts with private loan servicers to manage billing and other student and Parent PLUS loan-related services, including your option to defer payments until six months after your child graduates.
Warning: Even if you defer payments until after graduation, you’re still responsible for all the interest that accrues from the start of the loan.
8. It’s relatively easy to qualify for a Parent PLUS loan because it’s not tied to family income, assets, or even outstanding debt. The main bar to getting a Parent PLUS loan is having an adverse credit history, such as having defaulted on prior debts, having debts discharged through bankruptcy or having tax liens. Learn about what counts as an adverse credit history in this guide from Federal Student Aid.
9. If you are denied a Parent PLUS loan because of an adverse credit history, your student will be able to apply for more loans through the government’s unsubsidized Federal Direct Student Loan program. Federal Student Aid offers tips on what to do if you are denied a Parent PLUS loan.
10. Stay tuned: The Parent PLUS rules have changed significantly and we’ll continue to update this article with any further changes and developments.
Laura Zingmond is the senior editor of InsideSchools.org and UnderstandingFAFSA.org. She is passionate about improving equity in education at all levels and is a seasoned veteran of the college financial aid system. Ask her anything about the FAFSA, the CSS Profile, and communicating with financial aid offices.