Changes to student loan rules that could increase payments for thousands of parents

The One Big Beautiful Bill Act (OBBBA) has brought about a huge change for Parent PLUS loan borrowers – and for many there is an urgent deadline: June 30, 2026.

Parent PLUS borrowers hoping to use an income-driven repayment plan must have their Direct Consolidation Loan in full paid out at the latest then June 30, 2026.

That detail is important. Payout is the last step in the consolidation process that takes place after the application is assessed and approved. According to the Ministry of Education and typical processing times, which means waiting until late spring could push borrowers past the deadline.

Borrowers receiving disbursements on new loans (including consolidation loans) on or after. July 1, 2026 will lose access to IBR and ICR, even if they were already using one of those plans before consolidation.

Why Parent PLUS borrowers are facing these deadlines

Parent PLUS loans themselves are not eligible for most income-driven repayment plans. The only path to an IDR plan is through Direct consolidationthat you qualify for ICR. Once on ICR, borrowers can later switch to the IBR plan, which could further reduce payments.

The Department of Education has now confirmed that Parent PLUS borrowers will consolidate by June 30, 2026 does not need to be registered for ICR before the deadline to ultimately gain access to IBR. Consolidation is the most important step – not enrolling in a repayment plan (which must be done before June 30, 2028).

But the door will close for borrowers who consolidate on or after July 1, 2026. Any new consolidation paid after that date cannot be included in IBR or ICR. And RAP is also off the table for Parent PLUS loans.

For Parent PLUS borrowers, this is critical, especially for those who want to pursue Public Service Loan Forgiveness (PSLF). Using ICR is the only option for PSLF eligibility.

What happens if you miss the June 30, 2026 deadline?

Missing the deadline effectively eliminates all traditional income-driven options. Parent PLUS borrowers who consolidate on or after July 1, 2026 are limited to the Standard Plan.

This also has consequences for borrowers who seek it Public Service Loan Forgiveness (PSLF). While Parent PLUS loans can qualify for PSLF through consolidation and enrollment in ICR, missing the disbursement deadline eliminates this route. Borrowers who consolidate after July 1 would no longer have an eligible repayment plan for PSLF.

Plan no later than March 2026

Consolidation usually takes time four to eight weeksdepending on the service provider’s volume, document processing and borrower responsiveness. During periods of increased activity (such as leading up to an important policy deadline), processing may take longer.

The Ministry of Education calls on borrowers to register at least three months before June 30, 2026. That makes March 2026 the latest practical window to ensure the payout is completed on time.

Applications submitted in April, May or June carry a much greater risk of missing the deadline, as a loan is not considered consolidated until it has been fully disbursed and not just approved.

Borrowers can start consolidating at StudentAid.govand the process remains free.

Student loan borrowers will not be harmed

For many families managing Parent PLUS loans, the difference between an income-driven plan and a standard plan can mean hundreds of dollars per month.

1. View your loan types.
Check to see if your loans are Parent PLUS, as guidelines differ for other federal loans.

2. Estimate reimbursement under IDR versus standard plans.
The calculators from Studentaid.gov and The College Investor can help illustrate monthly payment scenarios.

3. Start consolidating well before March 2026.
Early spring is the “latest safe” timeline, but many borrowers will benefit from taking action earlier to avoid delinquencies.

4. Document employment if pursuing PSLF.
Borrowers using ICR for PSLF must submit an updated labor certification shortly after consolidation to get payment numbers updated if not. Keep in mind that your new loan will have a weighted average PSLF count.

5. Monitor future guidance.
The Ministry of Education may provide clarifications as the deadline approaches, especially regarding processing times.

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