Many parents who borrowed Parent PLUS Loans rely on income-driven repayment plans to keep payments affordable and pursue Public Service Loan Forgiveness (PSLF). Beginning July 1, 2026, new federal rules will make it harder for some Parent PLUS borrowers to access those benefits. Understand the changes so that you know where you stand.

KEY TAKEAWAYS

  • Before taking out new federal loans after July 1, 2026, understand how they will affect income-driven repayment and PSLF eligibility for Parent PLUS loan borrowers
  • If your consolidation completes before June 30, 2026, you still have more work to do
  • Use ICR before switching to IBR
  • Missing these deadlines could eliminate access to affordable repayment options

WHAT IS HAPPENING

If you’re a parent with federal Parent PLUS Loans, the U.S. Department of Education has changed the rules regarding your access to income-driven repayment plans and Public Service Loan Forgiveness—to meet the requirements of OBBB Act. You can maintain access to income-driven repayment plans and PSLF only if all the following remain true:

  1. Your Parent PLUS loans have been consolidated into a new Direct Consolidation Loan
  2. Your new Direct Consolidation Loan disburses on or before June 30, 2026. Not applied for, but processed and disbursed
  3. You have not obtained another federal student loan on or after July 1, 2026—including a new Parent PLUS loan or a new loan federal loan for your education
  4. You have no consolidation loan that will be disbursed on or after July 1, 2026

Understanding the U.S. Department of ED’s new rules is important because among the various plans borrowers may use to pay federal student loans, income-driven repayment plans (sometimes called IDR plans):

  • Are less expensive and based upon your income, not the total student debt amount you owe
  • Are a required feature for borrowers seeking Public Service Loan Forgiveness (PSLF)
  • Will not be available to borrowers with an unconsolidated Parent Plus loan in their portfolio of loans, at any time, on or after July 1, 2026

If the Consolidation of Your Parent PLUS Loans Are First Disbursed Before July 1, 2026

You may retain access to Public Service Loan Forgiveness (PSLF) and income-driven repayment plans. Current available IDR plans include:

  • Pay As You Earn (PAYE) – sunsets July 1, 2028
  • Income-based Repayment (IBR) — does not sunset but requires extra steps
  • Income Contingent Repayment (ICR) — sunsets July 1, 2028 & requires extra steps

Extra Steps Needed to Access IBR and ICR

The U.S. Department of Education clarified that Parent PLUS Loan borrowers cannot access the more affordable IBR income-driven repayment plans without completing all the following steps:

  • Step 1, having consolidated Parent Plus Loans into a Direct Consolidation Loan that disbursed or will disburse on or before June 30, 2026.
  • NOTE: The consolidation process can take up to 60 days to disburse a new consolidation loan, as a result, it is likely too late to meet the June 30th deadline for a consolidation not already in process
  • Step 2, enrolling in the ICR income-driven repayment plan and making at least one payment. ICR is the least affordable of all IDR plans, but the Dept of ED requires one payment before those with Parent PLUS loans can access the more affordable IBR plan.
  • Step 3, changing to the IBR income-driven repayment plan

If You Take Out Federal Loans on or After July 1, 2026

Direct Consolidation loans that include a Parent Plus loan on or before Jun 30, 2026 will have access to IDR Plans and PSLF.

However, the U.S. Department of Education will have your loans moved to the new standard tiered plan if any of the following actions are taken on or after July 1, 2026:

  • You obtain a new Parent PLUS Loan
  • You obtain a new Direct Consolidation Loan that includes a Parent PLUS Loan
  • You obtain any other federal Direct Loan
  • You obtain a new consolidation loan created from 2 consolidation loans containing Parent PLUS loans (sometimes called a double consolidation)

NOTE: The Standard Tiered Plan calculates your monthly payment based-upon the total amount of your student debt owed—not your income. Monthly payments may be unaffordable, and the plan does not give borrowers access to Public Service Loan Forgiveness (PSLF).

What About Your Other Direct Loans?

If you also have Direct Loans that do not include Parent PLUS Loans, those loans may be repaid under the:

  • Repayment Assistance Plan (RAP), a new income-driven repayment plan expected to go live July 1, or
  • The new Tiered Standard Plan which is NOT an income-driven repayment plan

Important 2026 Deadlines to Remember

  • ICR will be eliminated no later than July 1, 2028.
  • If you want to use IBR:
  1. Your consolidated Parent Plus loan(s) must be disbursed on or before June 30, 2026
  2. You must enroll in the ICR income-driven repayment plan.
  3. You must make one ICR payment before July 1, 2028.
  4. Then enroll in IBR

Bottom Line

If all your Parent PLUS Loans were disbursed on or before June 30, 2026, you still have access to income-driven repayment plans and PSLF—but only if you avoid taking out new loans after July 1, 2026.

If you do take out new federal loans on or after July 1, 2026, your Parent PLUS Loans and any consolidation loans that include them will be limited to the more expensive Tiered Standard Plan.

For additional information regarding student loan changes due to the OBBB Act visit studentaid.gov.

Need more resources? Go to The Student Loan Hub located on the Mayor’s Office of Education landing page on Phila.gov. Find clear and trusted information about student loans.