Although big families are less common today, many Americans want more than one child. In fact, a recent Gallup poll found that the ideal family size included at least two children. But, families with multiple children face a unique challenge: affording college for each child.
Few families can pay for college for two or more children from their savings, so it’s no surprise that about a quarter of outstanding federal loans are parent student loans.
However, President Trump’s sweeping One Big Beautiful Bill (OBBB) made changes to the federal aid system, changing how parents will be able to borrow money for their children’s education. If you have children in college (or plan on attending college in the future), here’s what you need to know about the OBBB’s changes.
What Is the One Big Beautiful Bill?
The OBBB is President Trump’s signature bill. It made changes to a broad range of departments and affects several areas of the economy, but some of its most substantial changes are to federal financial aid.
The OBBB changed the eligibility requirements for Pell Grants, set new borrowing limits, and changed student loan repayment options. For parents with multiple children, the changes are particularly significant.
How Does the One Big Beautiful Bill Affect Parents with Several Children?
Under the previous rules, parents of undergraduate students can take out Parent PLUS Loans to cover up to 100% of their children’s cost of attendance, with no limit on how much they can borrow per year or over their lifetimes. Parents with multiple children could use Parent PLUS Loans for every one of their children.
Under the OBBB, there are new annual and aggregate borrowing limits. For loans disbursed on or after July 1, 2026, the new loan limit is $20,000 per year per child, with an aggregate limit of $65,000 per student.
The OBBB doesn’t set borrowing limits per household, so you can take out up to the annual and aggregate limit for each of your children. For example, if you have two children in college, you can borrow up to $40,000 per year ($20,000 per child) for their education.
How Does the One Big Beautiful Bill Affect Parent Student Loan Repayment?
Parent PLUS Loans tend to have higher interest rates than other federal student loans, so their main advantages were their federal repayment options and benefits. However, the OBBB affects the appeal of Parent PLUS Loans in the following ways:
1. Parent Borrowers Are No Longer Eligible for Income-Driven Repayment (IDR)
For parents with student loans for multiple children, their monthly payments can be quite high. Under the previous student loan rules, parents could consolidate their loans with a federal Direct Consolidation Loan and enroll in an IDR plan — income-contingent repayment (ICR) — and qualify for a much lower payment.
The OBBB eliminated that option, so parents will no longer qualify for ICR. Instead, the only repayment option will be the new standard repayment plan. The new plan bases your repayment term on your loan balance at the time you enter repayment; terms range from 10 years for loan balances under $25,000 to 25 years for loan balances of $100,000 or more.
If you have more than one child you take out student loans for, these changes mean you’ll likely have higher monthly payments.
2. Parent Borrowers Are No Longer Eligible for Public Service Loan Forgiveness (PSLF)
Previously, parents could qualify for PSLF if they met these requirements:
- They worked for an eligible non-profit or government agency full-time for at least 10 years
- They consolidated their loans with a Direct Consolidation Loan
- They enrolled in ICR
- They made 120 monthly payments under ICR while employed full-time by an eligible employer
The OBBB eliminates the ability for parents to enroll in ICR, so parents will no longer qualify for PSLF either.
[Important: If you have existing Parent PLUS Loans, you can still enroll in ICR and qualify for PSLF but you must consolidate your loans and enroll in ICR before July 1, 2026.]
3. Consolidation Will No Longer Be as Beneficial
Consolidating your loans was a way for parents to combine their existing Parent PLUS Loans into one, easier-to-manage account. And, consolidation gave them access to additional repayment options, such as ICR.
The OBBB ends the ICR loan option and other payment plans for parent borrowers. While parents will still be able to consolidate their loans with a Direct Consolidation Loan to streamline their payments, doing so won’t have the same benefits as it did previously.
Other Financing Options for Parents
As a parent with multiple children, the OBBB directly affects your ability to borrow money for your children’s education. As you plan for your children’s futures, explore these other financing options to complement Parent PLUS Loans:
- Scholarship and grants: Encourage your children to research and apply for scholarships and grants from non-profit organizations and for-profit organizations. The College Board’s Scholarship Search tool is a great way to find available gift aid.
- Maximize student undergraduate loans: Parent PLUS Loans have higher rates than other federal loans, and, after the OBBB, they’ll also have fewer repayment options. Undergraduate student loans, such as Direct Unsubsidized Loans, may be a better choice; these loans are in your children’s names, but they have lower rates and more repayment options.
- Private parent loans: Depending on your credit and finances, private parent student loans may be a smart alternative. You can usually borrow up to 100% of the total cost of attendance for each of your children. To view potential loan options without impacting your credit score, use ELFI’s quote tool.
