New Parent Loan Limit Could Derail College Plans
Starting with students entering college in Fall 2026, there's a major change to federal parent loans that every family needs to understand.
The federal government will cap parent PLUS loans at $200,000 for the lifetime of a student's college education.
Previously, parents could borrow unlimited amounts—leading some families into $300,000-$400,000 debt spirals with monthly payments of $4,000-$5,000.
At $200,000, you're looking at roughly $3,000 per month for 10 years. Can your family handle that payment?
Here's what parent loans typically look like for a family earning $80,000 with a 3.75 GPA student (assuming the student also takes federal student loans):
California State Universities (CSU):
4 years: $92,000
5 years: $115,000
University of California (UC):
4 years: $125,000
5 years: $156,000
Private Colleges (Biola, LMU, Chapman, Howard):
4 years: $148,000
5 years: $185,000
Very Selective Private (NYU, USC, Stanford, Columbia):
4 years: $208,000 (exceeds limit)
5 years: $260,000 (far exceeds limit)
Common Out-of-State Public (Arizona State, Oregon, Washington):
4 years: $180,000
5 years: $225,000
What Happens When You Hit the Cap?
Once you reach $200,000, the federal government stops offering low-interest parent PLUS loans. Your family will need to turn to private lenders with:
Higher interest rates
Stricter requirements
The need for co-signers (often parents)
Many parents don't think they're on track to borrow this much—but the numbers don't lie. Half of students take 5 years to graduate due to major changes, failed classes, or academic exploration. That fifth year can push you over the edge.
If your student is targeting highly selective private colleges, you need to have an honest conversation about affordability now—not in April when acceptance letters arrive.
The school's prestige won't matter if the debt becomes unmanageable.