New Legislation Opens the Door for Parent PLUS Loan Borrowers—But with a Deadline

Recent legislative changes have created a major opportunity for Parent PLUS loan borrowers — one that could lead to significantly lower monthly payments and even eventual loan forgiveness.

Historically, Parent PLUS borrowers had limited repayment plan options. While consolidation into a Direct Consolidation Loan allowed access to the Income-Contingent Repayment (ICR) plan, ICR has long been considered the least generous of the income-driven repayment plans.

That’s changing. Following reconciliation, Parent PLUS loan borrowers will now be able to consolidate their loans and apply for the Income-Based Repayment (IBR) plan — but only if they consolidate by July 1, 2026 and apply for IBR after that consolidation.

IBR often results in much lower monthly payments than ICR and offers a clearer path to forgiveness. However, the decision to consolidate should be made carefully, as the process is permanent and can impact other repayment or forgiveness opportunities.

What happens after July 1, 2026?

This opportunity is time-limited. Under the new legislation:

• Parent PLUS loans first disbursed on or after July 1, 2026 will be restricted to the new standard repayment plan rules — no income-driven repayment options will be available.

• If a Parent PLUS borrower consolidates after July 1, 2026, even older loans will be subject to these new restrictive rules, removing eligibility for IBR or any other income-driven plan.

The takeaway:

For current Parent PLUS borrowers, the next year represents a critical window to take advantage of IBR eligibility. Waiting too long could mean losing access entirely, locking borrowers into higher fixed payments with no path to forgiveness. If you have a free account with Student Debt Solutions, login to review your options.

At SDS, we’re closely monitoring these developments. No matter your situation, we’re here to help you understand how potential changes may affect your path.