Guides · paying for it
For twenty years, the quiet backstop of American college financing was that a parent could borrow the entire remaining bill from the federal government, every year, no ceiling. That ended on July 1, 2026. Parent PLUS is now capped at $20,000 a year and $65,000 total per student — and if your student starts college in fall 2027, the caps apply to you in full.
The two caps interact in a way that matters: borrowing the $20,000 annual maximum hits the $65,000 lifetime cap partway through year four ($20,000 + $20,000 + $20,000 leaves just $5,000 of room). So the real federal parent-borrowing capacity for a four-year degree is $65,000 — not $80,000, and not "whatever the gap is."
Put that against a real gap. Say the school's net price runs $30,000 a year beyond what your family can pay from income and savings — a common shape for out-of-state publics and mid-tier privates. Four years is a $120,000 gap. Under the old rules, PLUS would carry all of it. Under the new rules it carries $65,000 — which means $55,000 of that plan has no federal loan behind it. That money has to come from private loans on private terms (credit-underwritten, often variable, no federal protections), more savings, or a different school.
Your student's own federal loans don't close a gap like that either: dependent undergraduates can borrow $5,500 to $7,500 a year in Direct Loans — $31,000 total — figures the new law left in place. Verify current limits at studentaid.gov.
1. The affordability check moved up a year. When PLUS was unlimited, a too-expensive school was survivable — expensively, but survivable. Now a school whose four-year gap exceeds roughly $96,000 ($65,000 PLUS + $31,000 student Direct) isn't reachable with federal loans at all. That's a fact worth knowing in September of senior year, while the list is still being written — not in April, holding an offer.
2. Early Decision got riskier for stretched budgets. ED binds you to one school's price before you can compare offers — and now there's a hard ceiling on the federal borrowing that used to absorb a disappointing aid package. If the pre-read of a school's net price leaves a gap anywhere near the caps, binding to it is a bigger bet than it was for the class of 2026. (More on that trade in the Early Decision guide.)
3. "We'll figure it out" now has a number. The same law also rewrote repayment plans for parent borrowers — verify what repayment actually looks like at studentaid.gov before borrowing at all.
This math is already built into your plan. Every school in College Compass shows the gap beyond your comfort line, what fits inside the federal caps, and — in red — the amount that has no federal loan behind it. See your student's numbers →
This guide states the caps and their arithmetic — it is not borrowing advice, and no planning tool can tell you how much debt is wise for your family. The honest version of that answer usually starts lower than the caps, not at them. Rules, dates, and repayment terms are the Department of Education's to change; verify everything against studentaid.gov before signing anything.
Know the gap before the list is final.
Nine questions, five minutes: every school on your student's list gets its real price at your income, the gap beyond your budget, and exactly how much of it federal loans can and cannot carry. First three schools free.