Parent PLUS Loan Deadline Looms: Changes Could Raise Monthly Payments for Borrowers

A major deadline is approaching that could significantly impact parents who took out loans to help pay for their children’s college education.

Changes tied to federal legislation are affecting Parent PLUS loans, a type of federal student loan taken out by parents on behalf of their children. Experts say borrowers who fail to act soon could lose access to lower, income-based repayment options.

According to Tamar Hoffman of Community Legal Services, many parents don’t realize they are fully responsible for these loans.

“Sometimes parents think they’ve co-signed a loan, when in reality it’s a Parent PLUS loan they’ve taken out themselves,” Hoffman explained.

Currently, some borrowers qualify for income-driven repayment plans that can reduce monthly payments based on earnings. However, new rules mean borrowers must consolidate their loans by a key deadline—recommended by the federal government as this Wednesday—to ensure processing is completed by July 1.

If borrowers miss that window, they could lose access to income-based repayment entirely, potentially leading to significantly higher monthly payments.

The impact could be widespread. Data from the National Association of Student Financial Aid Administrators shows a broad range of incomes among affected families, including many earning under $20,000 annually, as well as households earning over $100,000.

Experts warn the changes may not be widely known. Karen McCarthy, vice president of public policy for the organization, says many borrowers may not realize they need to act quickly.

She recommends families calculate potential payments under different plans to understand their options before making a decision.

Another key factor: only borrowers enrolled in income-driven repayment plans may qualify for Public Service Loan Forgiveness in the future.

With the deadline fast approaching, financial experts say taking action now could make a major difference in long-term repayment costs.