Federal Direct Parent PLUS Loan
Federal Direct Parent PLUS Loan
Federal Direct Parent PLUS Loan
The One Big Beautiful Bill Act (H.R.1), signed into law on July 4, 2025, introduces significant changes to the federal Title IV student aid programs. Some of these changes impact the Federal Direct Parent PLUS Loans available to parents of undergraduate, dependent students. These updates will take effect on July 1, 2026.
Notice of Regulatory Status: The U.S. Department of Education has not yet issued the final regulations for the One Big Beautiful Bill Act. Consequently, the information and answers provided below reflect our best interpretation of the legislation and the preliminary outcomes of the Negotiated Rulemaking sessions. These details are subject to change once the official "Final Rules" are published. While a specific release date has not been set, the Department is expected to finalize these regulations by June 1, 2026. The Office of Student Financial Aid Services is actively monitoring the legislation and its implementation details. This page will be updated regularly as additional guidance becomes available from the U.S. Department of Education.
- Annual Limit: Determined by the formula of Cost of Attendance – Other Aid (i.e. grants, scholarships, other loans)
- Aggregate Limit: No limit
- Eligibility is based on student enrollment and a credit check of the parent applicant
- Annual Limit: $20,000 per student (combined from all parents)
- Aggregate Limit: $65,000 per student
- Legacy Provision: Students with any existing Direct Loan may continue borrowing for up to 3 years or for the remainder of their expected time to complete the program, within the published length of time to do so, whichever is less.
- New Borrowers: Must seek alternative funding if limits are exceeded
Families requiring financial support beyond the revised federal loan caps ($20,000/year for Parent PLUS) should review the following supplemental funding options:
- Scholarship Universe
Matches students with external scholarship opportunities - Private Education Loans
Apply for a private loan - Payment Plans
Sign up for a payment plan
Final regulations for the One Big Beautiful Bill Act have not yet been published by the U.S. Department of Education. The information below is based on our current interpretation of the statute and available information from the Negotiated Rulemaking process. Please be advised that these FAQs are subject to change pending the issuance of final federal rules which are expected by June 1, 2026.
A "Legacy Borrower" is a parent of a current NJIT student who has borrowed a Federal Direct Loan (i.e. Subsidized, Unsubsidized or Parent PLUS) for the 2025-2026 academic year before July 1, 2026. To qualify, the loan must have been disbursed before this date.
Parents are considered a Legacy Borrower if:
- The student borrowed a Federal Direct Subsidized or Unsubsidized Loan at NJIT, even if the parent did not borrow a Parent PLUS loan
- Parent borrowed a Federal Direct Parent PLUS Loan for the student
| Qualification | Legacy Status? |
|---|---|
| Student had a Sub/Unsub loan disbursed before July 1, 2026 | YES |
| Parent had a PLUS loan disbursed before July 1, 2026 | YES |
| First Federal Direct Loan of any kind is disbursed after July 1, 2026 | NO |
To continue borrowing under the current loan limits, you must be considered a legacy borrower. A legacy borrower may continue borrowing under the current limits for 3 years or until the student completes their program, whichever is shorter.
Yes, Parent PLUS borrowers can lose eligibility due to the following:
Continuous Enrollment Requirement
The student of a legacy borrower for the Parent PLUS Loan must be continuously enrolled. For example, legacy borrowers will lose eligibility to continue using the Parent PLUS Loan under the pre-July 1, 2026 rules if:
- Student takes a fall or spring semester off
- Student begins enrollment in a fall or spring semester and withdraws completely from that semester
Summer is generally excluded from the continuous enrollment requirement, so a borrower will not lose eligibility for not taking classes in the summer.
Three Years of Eligibility
Legacy borrowers can only retain eligibility for the Parent PLUS Loan for 3 academic years after July 1, 2026, or the remainder of the student's program of study, whichever is shorter.
Changing Majors
Legacy borrowers will not lose eligibility if the student changes majors to a different undergraduate degree program after July 1, 2026. However, changing majors may extend the student's time to complete their degree, exceeding the 3-year maximum allowed for legacy status. If that occurs, parents may lose access to the Federal Direct Parent PLUS Loan program under the pre-July 1, 2026 rules before the student graduates.
Students of legacy borrowers must be continuously enrolled. For example, legacy borrowers will lose legacy status if the student:
- Does not enroll in a fall or spring semester
- Begins enrollment in a fall or spring semester and withdraws completely from that semester
Summer is generally excluded from the continuous enrollment requirement, so a borrower will not lose eligibility for not taking classes in the summer.
A "year" for legacy purposes is an academic year, not a calendar year.
No. Legacy borrower rules require enrollment in the same degree program at the same institution. Transfer students do not qualify for legacy status.
Also, any Parent PLUS loans borrowed at the other institution will count toward the $65,000 lifetime limit under the new rules.
Example Calculation
- Lifetime Limit: $65,000
- Minus amount borrowed at previous schools: -$50,000
- Remaining eligibility at NJIT: $65,000 - $50,000 = $15,000
Note: If you have already borrowed $65,000 or more for this student at other institutions, you will have no remaining Federal Parent PLUS Loan eligibility at NJIT.
Undergraduate degree programs generally have a 4-year published program length. This means the program should be completed in 4 years. We will use this maximum time as the time allowed to complete the degree.
Example 1
Published Program Length: 4 years
The undergraduate student completes their first year at the end of the 2025-2026 academic year and is scheduled to return for their second year in 2026-2027. Parent borrowed Parent PLUS for the 2025-2026 year. Student has completed one year of the program and has 3 years remaining under the legacy rules.
| Academic Year | Period Enrolled | Legacy Status |
|---|---|---|
| 2025-2026 | Year 1 | N/A |
| 2026-2027 | Year 2 | Legacy eligible |
| 2027-2028 | Year 3 | Legacy eligible |
| 2028-2029 | Year 4 | Legacy eligible |
| 2029-2030 | Year 5 | Not eligible for legacy |
Example 2
Published Program Length: 4 years
The undergraduate student completes their second year at the end of the 2025-2026 academic year and is scheduled to return for their third year in 2026-2027. Parent borrowed Parent PLUS for the 2025-2026 year. Student has completed two years of the program and has 2 years remaining under the legacy rules.
| Academic Year | Period Enrolled | Legacy Status |
|---|---|---|
| 2024-2025 | Year 1 | N/A |
| 2025-2026 | Year 2 | N/A |
| 2026-2027 | Year 3 | Legacy eligible |
| 2027-2028 | Year 4 | Legacy eligible |
| 2028-2029 | Year 5 | Not eligible for legacy |
Example 3
Published Program Length: 4 years
The undergraduate student completes their third year at the end of the 2025-2026 academic year and is scheduled to return for their fourth year in 2026-2027. Parent borrowed Parent PLUS for the 2025-2026 year. Student has completed three years of the program and has 1 year remaining under the legacy rules.
| Academic Year | Period Enrolled | Legacy Status |
|---|---|---|
| 2023-2024 | Year 1 | N/A |
| 2024-2025 | Year 2 | N/A |
| 2025-2026 | Year 3 | N/A |
| 2026-2027 | Year 4 | Legacy eligible |
| 2027-2028 | Year 5 | Not eligible for legacy |
Example 4
Published Program Length: 4 years
The undergraduate student completes their fourth year at the end of the 2025-2026 academic year and is scheduled to return for their fifth year in 2026-2027. Parent has borrowed $80,000 for the Parent PLUS by the end of the 2025-2026 year. Student has completed four years of the program and has no remaining time under the legacy rules.
- Since the parent has already borrowed $80,000 and the new maximum limit is $65,000 under the new rules, parent is not eligible to borrow Parent PLUS anymore
- If the parent had borrowed $40,000 by the end of the 2025-2026 academic year, parent would have a remaining eligibility of $65,000 - $40,000 = $25,000. However, the maximum eligibility per academic year would be capped at $20,000
| Academic Year | Period Enrolled | Legacy Status |
|---|---|---|
| 2022-2023 | Year 1 | N/A |
| 2023-2024 | Year 2 | N/A |
| 2024-2025 | Year 3 | N/A |
| 2025-2026 | Year 4 | N/A |
| 2026-2027 | Year 5 | Not eligible for legacy |
As a new Parent PLUS borrower, the following annual and aggregate loan limits apply:
- Students may not receive more than $20,000 in a Parent PLUS loan in an award year (Fall, Spring, Summer).
- Students may not receive more than $65,000 aggregate for the total duration of the undergraduate degree program.
No. The $20,000 annual limit is based on the student, not the parent. The combined Parent PLUS loan amount for the student in an award year cannot exceed $20,000.
No. You do not meet the legacy borrower definition. Refer to the Legacy Borrower section.
We strongly encourage students to be on track to graduate in four years, as most undergraduate programs have a published length of four years. If you borrow $20,000 in the first three years, you would have remaining eligibility of $5,000 in the fourth year.
We encourage you to review your borrowing need and borrow less than $20,000 each year, as there is no need to borrow the full amount every year. Also, refer to the Additional Financing Options section.