Important Deadline for Parent Plus Loans

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, is
bringing sweeping changes to federal student loans. For Parent PLUS loans,
the changes will affect both current and new borrowers.

Here’s what you need to know:

Borrowers who take new Parent Plus loans or consolidate existing Parent Plus loans
on or after July 1, 2026, will no longer have access to Income Driven Repayment (IDR)
plans or forgiveness programs such as Public Service Loan Forgiveness (PSLF) and
Income Driven Repayment Forgiveness (IDRF).

If you are a parent borrower and do not plan to take additional debt on or after July 1, 2026,
you have an opportunity to consolidate your Parent PLUS loans into a Direct Consolidation
loan. That new loan will be eligible for an Income Driven Repayment (IDR) plan through
which you can continue to pursue forgiveness

Why does that matter? If you work for a qualifying employer (like Legal Services of Long
Island) as a full-time employee, and pay your loans through an IDR plan, you will be eligible
for Public Service Loan Forgiveness (“PSLF”) after 120 months of payments.

Is there a deadline? Yes! Your Parents PLUS loans must be consolidated before July 1,
2026, or you will not be eligible for IDR plans, PSLF or IDRF. To meet this deadline, you must
apply for consolidation ASAP or at the latest March 31, 2026.

What happens on July 1, 2026? Parent PLUS borrowers who take any new loans or
consolidate existing loans on or after July 1, 2026, must pay ALL Parent Plus loans (including
older debt) back in the new tiered Standard Fixed repayment plan which does not offer loan
forgiveness.

Recommendation: We encourage you to reach out to Jennifer at 516-292-8100 Ext. 3344 or
via email at EDCAP@legalservicesli.org. Parents who have a mixture of loans for their own
education and Parent Plus loans are particularly encouraged to seek guidance before
deciding how to proceed.

Please also share this information with clients, friends, family, neighbors, people in line at the
grocery store who may have Parent Plus loans.

The Education Debt Consumer Assistance Program (EDCAP) provides legal assistance to people who are
experiencing student debt problems, including unpaid tuition bills, collection actions, and managing federal
and private student loans. Assistance is available to student borrowers, parents, and other family members
regardless of income. Legal Services of Long Island is a partner in the EDCAP network, a program of the
Community Service Society of New York. Services may include student loan counseling, litigation defense and representation, and phone advice.
Suffolk and Nassau residents, please call 516-292-8100 to be screened for services. Feel free to download
and share our English and Spanish Flyer.