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Parent PLUS loans lost income-driven repayment options after July 1
Borrowers who did not consolidate a Parent PLUS loan into a Direct Consolidation Loan before July 1, 2026 no longer qualify for income-driven repayment or PSLF.
Yahoo Finance reports that access to income-driven repayment for Parent PLUS loans changed on July 1, 2026 for millions of federal borrowers, after the new One Big Beautiful Bill Act (OBBBA) took effect.
According to the report, Parent PLUS loans that were not consolidated into a Direct Consolidation Loan before July 1, 2026 no longer qualify for income-driven repayment or Public Service Loan Forgiveness (PSLF). The article says Parent PLUS borrowers can still apply for the Income-Contingent Repayment (ICR) plan only after first consolidating into a Direct Consolidation Loan, while other income-driven plans are not available for Parent PLUS loans.
The change also affects eligibility for broader federal forgiveness, since the report notes that Parent PLUS borrowers who fail to consolidate by June 30, 2026 will be ineligible for federal loan forgiveness programs. The article adds that OBBBA is creating a new Repayment Assistance Plan (RAP), but Parent PLUS loans are not eligible for RAP even if consolidated first.
Finally, the report states that OBBBA is eliminating the ICR plan by July 1, 2028, though Parent PLUS borrowers already on ICR will be able to switch to Income-Based Repayment at that time.