If you work in higher education enrollment, you’ve heard about the July 1, 2026, implementation of the One Big Beautiful Bill Act (OBBBA) regarding federal student and PLUS loans. But there’s a more urgent deadline: April 1, 2026—and it affects your current parents and alumni right now.
Part 1: Immediate Action Required – the April 1 Consolidation Deadline:
Loan repayment terms are changing dramatically. Parents who want to preserve Income-Driven Repayment options must consolidate their Parent PLUS loans by June 30, 2026. But the Department of Education recommends starting the consolidation application by April 1, 2026 to ensure timely processing.
The payment difference is dramatic. On $150,000 in Parent PLUS debt:
- Miss the deadline: $1,217/month with no income-driven option
- Consolidate by June 30: Start at $570/month, potentially dropping to ~$266/month with forgiveness after 25 years
- There are tax implications regarding filing status. Families should consult tax advisors regarding their specific situation.
This is an immediate constituent relations issue. Your current parents and alumni need this information now—not in May or June. Parents in their 50s who may face $1,217 monthly payments into their 70s need to know they have options. The consolidation process takes 4-6 weeks and is free through the Federal Student Aid website. PayforED offers helpful information and simulation tools. (This writer has no financial interest in this firm.)
Part 2: Implications for Students and Institutions: The New Federal Student Loan Framework
For Undergraduate Families:
- Parent PLUS loans caps (unlimited since 1993): $20,000/year, $65,000/student maximum
- Student loans: Unchanged at $27,000 aggregate, maximum varies by year
- Combined family federal borrowing per student over four years: $92,000 maximum
For Graduate Education:
- Graduate PLUS loans: Eliminated entirely for new borrowers
- Traditional graduate students: $20,500/year, $100,000 lifetime
- Professional students (medicine, dentistry, law, veterinary): $50,000/year, $200,000 lifetime
- Unified cap across all federal loans: $257,500
Private Loan Reality:
- Approval rates: ~40% for private loans (vs. nearly universal approval Parent PLUS applicants)
- Interest rates: 11-12% (vs. 8.05% for new Parent PLUS borrowers)
- Example: $60,000 borrowed = ~$725/month for 10 years
The Fundamental Shift: From “What” to “How”
The conversation shifts from “what will you pay” to “how will you pay—including graduate school.”
Traditional approach: Four-year focus, Parent PLUS as unlimited backstop, graduate school as “future problem” with Graduate PLUS loans available.
OBBBA-era approach: Eight-year planning, Parent PLUS as limited resource, no Graduate PLUS availability, private loan underwriting and interest rates as potential enrollment barrier, significantly more family debt across entire journey.
One institution I’ve been in conversation with had 189 Parent PLUS borrowers representing approximately $4.3 million in loans and almost 10% of the undergraduate student body. About half (95) borrowed more than the new $20,000 annual limit taking effect July 1. Among those families, median Parent PLUS borrowing is approximately $38,000.
Apply these proportions to the incoming class of 550. With an expected Net Tuition Revenue/student (NTR/s) of $20,000, a class of that size would generate an aggregate NTR of $11,000,000. If the proportions hold true going forward, this institution will expect that 27 students (5% of 550) have been contributing about $1,026,000 of the class NTR through unlimited options for Parent PLUS lending. About half of that money will have to be found elsewhere going forward.
Five percent doesn’t sound like much until you do the math for your institution. For a college enrolling 550 new first years, that’s 27 students—perhaps choosing a less expensive option—in a single year. In the current enrollment environment, that’s not a rounding error. That could be a budget crisis.
PLUS borrowers are often middle-income families—too affluent for substantial need-based aid, not affluent enough to pay without borrowing. They’ve used Parent PLUS to bridge the gap. After July 1, that bridge narrows substantially.
Additionally, families at high-cost undergraduate institutions face a compounding effect when students pursue professional school. With undergraduate student loan debt already constraining the $257,500 lifetime cap and limited Parent PLUS options, families face difficult choices: take on high-interest private loans, reduce retirement savings, or select lower-cost undergraduate institutions that preserve borrowing capacity for medical or law school.
One More Thing – Legacy Provisions
Students with at least one federal loan disbursed before June 30, 2026 can continue borrowing under current rules for up to three years or program completion.
Time-sensitive opportunities:
- Sophomores/juniors: One Parent PLUS disbursement before July 1 preserves unlimited access
- Graduate school-bound students: Starting before July 1 may preserve Graduate PLUS access
- Caveat: Transfers and program changes may affect eligibility
Strategic Actions for Enrollment Leaders
Immediate Actions (Now-June 2026):
- Constituent Communication Campaign
How are you communicating the April 1 consolidation deadline to parents and alumni? This isn’t a passive information campaign—families missing the June 30 deadline face real financial harm. Consider:
- Direct email to all current parents with Parent PLUS loans
- Alumni communication to parents who borrowed for their children’s education
- Information sessions or webinars explaining consolidation benefits
- Institutional Data Analysis
Pull comprehensive reports on your current Parent PLUS borrowers:
- How many families borrowed more than $20,000 annually?
- What’s the distribution of borrowing amounts (median, mean, quartiles)?
- What percentage of your enrolled class do > $20,000 PLUS borrowers represent?
- What are the SAI ranges for these families—are they concentrated in specific income bands?
- Do you see patterns by academic program (pre-med, pre-law students)?
- How many have younger siblings who might consider your institution?
- Yield Strategy Recalibration
Model what happens to yield when Parent PLUS caps fundamentally change the financing equation after determining the profile of the Parent PLUS borrow in your current student body.
- Middle-income families ($80K-$150K) historically relying on Parent PLUS
- Families with multiple children planning sequential enrollment
- Private loan underwriting becoming a constraint (40% approval rates)
- Families making eight-year planning decisions for professional school-bound students.
Questions for Undergraduate Leaders:
Pricing and Affordability:
Can families realistically pay your net price when combined federal borrowing is capped at $92,000? For many institutions in the $60K-$75K range, families with $30,000 SAI who received modest merit aid were using Parent PLUS annually. Those families may now face a substantial annual financing gap.
Net Revenue Modeling:
What happens to net tuition revenue when 5% of families can no longer afford your institution without private loans—and possibly 60% of those families don’t qualify for private loans?
Institutional Aid Strategy:
Do you:
- Reallocate existing aid to offset reduced federal capacity?
- Increase discount rate to make net price achievable within federal caps? If so, how much and to whom?
- Develop new yield strategies for middle-income families?
- Create emergency aid funds for families caught in private loan approval challenges?
- Sit back and wait to see how it all plays out.
Market Positioning:
Can you position the institution as the “smart financial choice” that preserves graduate school borrowing capacity? For families with pre-med, pre-law, or other professional school-bound students, this could be your most compelling value proposition.
Implications for Institutions – Advantages and Headwinds
Graduate programs have grappled with this new framework since last summer. Many master’s programs catering to new college graduate or working professionals with families cost far more than the new graduate Loan and loan caps allow. The impact on undergraduate education is more subtle and will likely take a couple of years before the profession and the public wrap their minds around the implications.
Institutions with strategic advantages:
- Lower published prices (under $50,000 COA)
- Strong institutional aid budgets
- Programs with solid and provable ROI
- Financial literacy support capacity
Institutions with headwinds:
- High-price/high-discount models with a segment of families relying on unlimited Parent PLUS.
- Graduate programs where earnings don’t support private borrowing
- Limited institutional aid flexibility
- High percentage of students pursuing expensive graduate programs
The Bottom Line
OBBBA accelerates existing trends and shifts financing risk to institutions and families. For that institution with 95 families (5% of class) exceeding new limits? Those families still want excellent education. Will they seek it where they can afford it within federal limits—or navigate private loans with 40% approval rates and 11-12% interest?
But the most urgent action is April 1 consolidation communication. Families missing the June 30 deadline face hundreds more per month—thousands per year.
How are you communicating this to your parents and alumni?
J. Carey Thompson is the founder of CVET Enrollment Strategies, bringing 35+ years of senior enrollment leadership experience across admission, financial aid, career services, communications, athletics, and institutional research. CVET partners with private colleges and universities to develop comprehensive, evidence-based enrollment strategies. Learn more at cvetconsulting.com.