Key insights
- The "One Big, Beautiful Bill Act" is sunsetting certain income-driven repayment plans for Parent PLUS loans. Borrowers must consolidate by June 30, 2026, to maintain access to income-driven repayment options like IBR. Missing the deadline could lead to unaffordable standard payments for some of the 3.6 million Parent PLUS borrowers, potentially impacting consumer spending and the broader economy, albeit modestly.
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Parents holding federal student loans must consolidate now or risk losing access to income-driven repayment plans.
The One Big, Beautiful Bill Act" passed by Congress in July, calls for several significant changes to repayment plans, including sunsetting the Income Contingent, Income-Based Repayment and Pay as You Earn plans and replacing them with a brand-new repayment plan.
Borrowers with Parent PLUS loans—federal loans parents take out for a child's education—must have their consolidation fully processed and disbursed by June 30, 2026. Those who miss the deadline will permanently lose access to income-driven repayment plans.
That means most borrowers will need to start consolidating now, since the process takes four to six weeks, according to MOHELA, a federal student loan servicer.
Without access to an income-driven repayment plan, some of the 3.6 million Parent PLUS borrowers may not be able to afford their standard-plan payments.
Parent PLUS borrowers only have access to standard repayment plans. Previously, Parent PLUS borrowers could consolidate their loans and access the ICR plan, which lowered some borrowers' payments and forgave remaining debt after 25 years.
However, as part of the sunsetting process under the One Big, Beautiful Bill Act, any Parent PLUS borrower who takes out a new student loan or consolidates their loans after June 30 will lose access to the ICR plan.
After that date, Parent PLUS borrowers can't enter any income-driven repayment plan unless they fully consolidate their loans before June 30. The Department of Education expanded access to the IBR plan in 2025, allowing existing Parent PLUS borrowers who consolidate to use it.
Parent PLUS borrowers don't have to enter IBR now. They just need to consolidate before June 30 to keep it as an option.
While Parent PLUS borrowers don't have to enter the IBR plan now, this income-driven repayment plan generally offers the lowest monthly payments of any repayment plan. It also forgives loans after 20 or 25 years.
To access the IBR plan, Parent PLUS borrowers must do the following:
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