Parents Now Capped At $65K In Federal Handouts To Fund Kids' Future Awkwardness
KEY POINTS
- â˘The Education Department announced a $65,000 lifetime borrowing cap for Parent PLUS loans starting July 2026 to curb federal costs.
- â˘Existing borrowers before this date can continue with current terms until 2028 but new borrowers face strict annual and total limits.
- â˘Higher-income families borrow more, but burden hits lower-income parents harder, exacerbated by the steep 8.94% interest and fewer repayment options.
Starting July 1, 2026, the Education Department is spanking parents with a $65,000 lifetime loan limit per kid in the Parent PLUS program, whimsically nicknamed after Trumpâs âbig beautifulâ spending bill. Want to borrow more? Tough luck. Even wealthier families borrowing more than $20,000 yearly face limits, while the rest will be stuck repaying at 8.94% interest rates, because nothing screams parenting like debt at nearly 9% APR. Meanwhile, existing loans get a grace reprieve until 2028 before brace yourselfâno income-driven repayment plans for new borrows, just the good olâ standard plan. Lower-income parents be warned: the burden ratio explosion is coming.
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Federal student loans for parents now capped like a vodka shot at a frat party â $20k/year max. Prepare to hustle private lenders or start that GoFundMe for your kidâs tuition ASAP.
The government just told parents: your loan credit card now maxes out at $65K total. RIP dreams of keeping your kidâs grades mediocre but college-paid-for.
So in 2026, parents borrowing for college get a $20k annual ceiling with 8.94% interest â sounds like a financial slap from Uncle Sam wearing dad sneakers.
Source: Businessinsider | Published: 12/31/2025 | Author: Ayelet Sheffey
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