Navigating the New Parent PLUS Loan Caps

We’re nearly two months into the 2025-26 academic year, which means those of us in enrollment management, admissions, or financial aid are already looking ahead to 2026-27. When I worked in a financial aid office, I often reminded my team: “the only constant is change.” While admissions and enrollment folks are used to the calendar shifting, we haven’t seen many industry-wide changes that directly affect them—until now.

The upcoming year brings a significant shift that, on the surface, may seem like a “financial aid thing”, but in reality, it’s an enrollment thing—or more accurately, an entire campus thing with both immediate and long-term implications.

WHAT’S CHANGING?

The One Big Beautiful Bill Act, signed into law on July 4, 2025, is a sweeping 331-page budget reconciliation bill. It’s understandable if the changes to Parent PLUS Loan eligibility flew under the radar. Starting July 1, 2026, new borrowing caps will take effect:

• $20,000 per year per student 
• $65,000 over that student’s degree journey

For some institutions, this may not seem like a major shift. But let’s take a closer look at the data; it tells a compelling story.

THE DATA BEHIND THE IMPACT

The U.S. Department of Education publishes a lot of information and, if you know where it’s found, can be fascinating. Their Title IV Program Volume Reports tells the following story about Parent PLUS Loans during the 2024-25 academic year (fun fact: it lists this information by school, so you don’t need your financial aid or institutional research office to get it for you).

• Total amount borrowed just under $12.2 billion
  • Represents 15% of all federal student loan dollars during the 2024-25 academic year, or 28.1% of all undergraduate specific federal loan dollars.
• Over 590,000 borrowers
• Average amount borrowed was $20,664

That average is already above the new annual cap, and there’s a lot being borrowed. You may be thinking “Sure, but that’s just an average—probably a small percentage of total enrollment.” Let’s dig deeper.  

IPEDS allows you to pull unduplicated, grand total undergraduate enrollment, so let’s join data sets (enrollment and Parent PLUS) and see what we get (please note this is for the 2023-24 academic year as IPEDS does not have 2024-25 enrollment data posted).

• The total undergraduate enrollment at 4-year, degree-granting institutions was approximately 9.8 million students.
• Parent PLUS Loan recipients were approximately 570,000.  
• That’s 5.8% of all undergraduate students whose parents used a Parent PLUS Loan.

This is not a fringe issue. It’s a meaningful slice of the student population.

SECTOR SPECIFIC INSIGHTS

Private, nonprofit institutions are most at risk but all sectors are affected.

QUESTIONS CAMPUS LEADERS SHOULD BE ASKING

• What happens if you miss your individual or university enrollment goal by 1–4%?
• What’s the revenue impact?
• How does this affect retention and graduation rates?
• Will your school fill any potential student funding gaps created with institutional aid? What does that do to your discount rate/revenue?
• What’s the risk to your federal loan cohort default rates if students don’t complete?
• How does this affect student satisfaction and future alumni giving/engagement?

WHAT YOU CAN DO NOW

While the data may feel alarming, the goal here is clarity; informed decisions start with informed conversations.

• Get Familiar with Your Campus Data: What percentage of your students may run into the upcoming annual or aggregate caps?
• Educate Campus Leadership: This is not something you want to keep to yourself given the potential impacts.
• Model Out Various Scenarios: Discuss what this would actually mean on your campus.
• Communicate Early & Often:
  • Modify your comm plans to include information about the Parent PLUS Loan caps and present them with various options, leaving nothing off the table (payment plans, private loan options, etc.).
  • Transparency is key to avoiding summer melt. It’s never a good thing and if these changes and options aren’t communicated early and often, it could be a rough summer.
• Empower Your Admissions Staff to Have These Conversations: Equip them with necessary knowledge to help families understand and navigate their paying-the-balance options.
• Lean on Trusted Partners: This is a shared challenge across the industry and collaboration will be key. Strategic enrollment partners like enrollmentFUEL and as education solutions companies like Sallie, are ready, willing, and able to lend their expertise to train staff on the specifics and nuances of this topic. Calling on them to present to prospective and/or deposited students on the topic at admitted student days may also be an option.

FINAL THOUGHT

Change is coming on July 1, 2026. Our shared goal is to help students who want to attend college do so and do so successfully. This change presents real challenges, but together we can prepare and empower students and families with the information and options to fulfill their goal of a college degree. To quote Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.”

About the Author
Ed Recker is a Director of High School Relationship Management with Sallie Mae, serving high schools, states, and professional organizations throughout the U.S. He joined Sallie in 2019, and has over 20 years’ experience in the financial aid and enrollment industry. Prior to joining Sallie, Ed was a Senior Consultant within the Enrollment Division of Ruffalo Noel Levitz, held the position of Vice President for Enrollment Management at the University of Findlay, and held various financial aid positions at the University of Findlay, Terra State Community College, and Bowling Green State University. Ed holds an M.Ed. in Higher Education from the University of Toledo, and resides in Ottawa, OH with his wife Kate and daughter Evelyn.