Fred Amrein recently had the pleasure of joining the Money Tree Investing Podcast to discuss one of the most significant shifts in college financing in a generation. It is the sweeping changes brought on by the “One Big Beautiful Bill” (OBBB) and what they mean for families planning to pay for higher education.
The conversation centered on how these new federal policies are fundamentally reshaping the way families must approach college affordability. Starting July 1, 2026, new borrowing caps will dramatically limit what students and parents can access through federal loan programs. Parent PLUS loans will be capped at $20,000 per year with a $65,000 lifetime limit. It has created what we at PayForEd call “the $92,000 Rule,” the maximum a typical family can now borrow federally for four years of undergraduate education. For students who attend schools and need to borrow more than $92,000 over the first four years, will have a funding gap. This gap will need to be filled with private loans, which carry stricter underwriting requirements and shorter repayment terms.
We also discussed the ripple effects on graduate school funding, the elimination of Grad PLUS loans for new borrowers, and how a parent cosigning loans for one child can directly impact their ability to finance education for siblings or support graduate school down the road.
For families with existing federal loans, there’s an urgent deadline: June 30, 2026 is the last opportunity to lock in legacy income-driven repayment options before they disappear for Parent PLUS borrowers.
The bottom line from our discussion is clear; college affordability can no longer be an afterthought. Families must model the full cost of borrowing before selecting a school, not after. The tools and advisor network at PayForED.com are designed to help families do exactly that.
