Analysis: Parents Who Borrowed for Children’s College Face Looming Deadline
On 4/9/26, the American Bankruptcy Institutes reports:
Time is running out for parents who took out college loans for their children and want to keep affordable repayment and debt-forgiveness options, the New York Times reported. Because of new rules on student loans, parents who borrowed federal parent PLUS loans and want to keep monthly payments low need to apply soon to merge the loans into a new loan — a step known as consolidation. That will keep them eligible for a plan that bases monthly payments on their income, as well as for loan forgiveness programs. While the formal deadline for consolidating parent PLUS loans is June 30, it’s much sooner in practice, to allow time to process applications and pay out the loans. The government, in its advice on a Federal Student Aid website, had “strongly” encouraged parents who must consolidate their loans to use income-driven repayment plans to apply by April 1. The ticking clock is one result of a major overhaul of the federal student loan program under the Republican tax and policy law passed last summer. The deadline comes amid a persistent period of turmoil for student loan borrowers. Just last week, the Department of Education said it would notify 7.5 million borrowers in the generous Biden-era SAVE repayment plan that they must choose a new plan in the coming months or be moved into a more expensive option. Republicans had mounted a legal challenge to the SAVE plan, and a federal court ruling on March 10 ultimately killed it.