This post provides more updates and information covered in our previous post on what Parent PLUS borrowers need to do to lower their payments due to changes under a new law, the Big Bill. Check out the previous post for more information on what happens if you borrow a new loan (or a new Parent PLUS loan) on or after July 1, 2026.
If you are currently repaying a Parent PLUS loan, you need to act fast if you want to have the option to repay it in an income-driven repayment (IDR) plan. If you do not apply to consolidate Parent PLUS loans quickly, so that the consolidation loan is issued before July 1, 2026, you will not be able to pay those loans in an IDR plan moving forward. If you haven’t yet applied to consolidate your Parent PLUS Loans, act now so you don’t miss the July 1, 2026 deadline.
Generally, it takes 4 to 6 weeks for a consolidation application to be processed. But, don’t wait to apply to consolidate! The longer you wait, the less likely the consolidation loan will be issued before the deadline.
Once your Parent PLUS loans have been consolidated, you must sign up for an IDR plan before July 1, 2028. If you do not, you will not be able to pay the consolidation loan containing a Parent PLUS loan in an IDR plan in the future.
If you are enrolled in an income-driven repayment plan, the Department of Education determines your monthly payment based on your income and your family size, not how much you owe. If your income decreases, so does your monthly payment. For many borrowers, income-driven repayment plans are much more affordable than other repayment plans. Some low-income borrowers can even have $0 monthly payments!
What if my consolidation loan is disbursed after the July 1, 2026 deadline?
If your loan is disbursed on or after the July 1, 2026 deadline, it will change the repayment options available on all of the Direct Loans you owe. You will NOT be able to sign up for any IDR plan for the consolidation loan containing the Parent PLUS loans. If you take on any loan after July 1, 2026 any consolidation loans that contain Parent PLUS loans will only be eligible for the new Tiered Standard Plan.
Is there anything I can do to stop the consolidation if I think I will miss the July 1, 2026 deadline?
Yes, before the consolidation is completed, the servicer will send you a letter listing which loans should be consolidated and telling you that it will finish processing the consolidation application if it does not hear from you within 15 days. If you get this letter and it looks like the consolidation loan will be issued after the July 1st deadline, you can call your servicer to cancel the consolidation.
How do I consolidate my Parent PLUS loans?
You can apply online by logging into your account on studentaid.gov and completing the online application. When you apply online, you can select which loans you want to consolidate. Make sure you select your Parent PLUS loans! If your loans are in default, you will need to manually enter them into the online form. You can also apply using a paper or PDF application, available here.
When you apply to consolidate your loans, you can also submit an application to repay your loans in an IDR plan. At first, the consolidation loan will likely only be eligible for the Income-Contingent Repayment (ICR) plan. But after you make one payment in ICR, you can then apply to switch into the Income-Based Repayment (IBR) plan, which offers lower payments than ICR for most borrowers.
More information on how to consolidate your loans is available here.
