Here is a quick recap of the federal financial aid changes that took effect July 1, 2026, because they directly affect how we build your student's college list.
1- The biggest change affects Parent PLUS loans. Parents can now borrow no more than $20,000 per year and $65,000 total for each dependent student, regardless of how many parents borrow. New Parent PLUS loans now only qualify for the standard repayment plan, so payments can no longer be tied to your income. If a school costs significantly more than your family's resources and aid combined, federal loans may no longer close that gap.
2- Interest rates have also increased; new Parent PLUS loans are now at 9.07%. Because repayment can stretch 10 to 25 years, even a small rate increase will add thousands of dollars to the total cost of borrowing.
NOTE: If you already took out a Parent PLUS loan for an older child before July 1, 2026, you can continue borrowing for that child under the previous limits for up to three more academic years or until they finish their program, whichever comes first. Please note that this exception applies only to the child who already has the loan. Your high schooler will fall under the new limits when they start college.
3- New student borrowers now choose between a Standard Repayment Plan and the new Repayment Assistance Plan (RAP). Grad PLUS loans are no longer available, so students considering medical, law, or other graduate programs should keep undergraduate debt as low as possible while earning their bachelor's degree. The maximum Pell Grant stays at $7,395, meaning it covers a smaller share of rising costs. Note - qualifications are based on your family's Student Aid Index number and income levels.
KEY ACTIONS:
Cost is part of the college 'fit': This is why you should approach your college list in a targeted and methodical manner, keeping cost in view from the beginning. If you wait until college acceptances arrive to assess affordability, it will create stress at the exact moment students should be celebrating.
Use the college's NPC tool: Parents, please run the net price calculator for each college on your student's list, if you haven't already.
BOTTOM LINE: Stay focused on colleges that are both a strong fit both academically and financially to ensure a 4 year college experience with a focus on the student's future.
