What Should Families Expect from New Changes to Federal Financial Aid in the One Big Beautiful Bill Act of 2025?

October 12, 2025

It is financial aid application season and as student's and families complete the FAFSA (Free Application for Federal Student Aid), you should be aware of changes resulting from the One Big Beautiful Bill Act of 2025 passed in July. There are two main changes that affect students applying to college this year.

• Changes to Parent PLUS Loans (more about these kinds of loans below): There is now a $20,000 per year limit on how much a parent can borrow to pay for a student's undergraduate education, and a $65,000 total limit for an undergraduate degree. It used to be that parents could borrow any amount per year up to the student's total cost of attendance to help pay for college.
• Lifetime Limit on All Federal Loans for Students: There is now a lifetime limit on how much student loans any student can receive, currently set at $257,500. The limit towards an undergraduate degree is $57,500. That means a student cannot borrow more than $57,500 for all years of college. This limit does not apply to parent PLUS loans.

What are parent PLUS loans you might ask? Parent PLUS loans, also known as direct PLUS loans (PLUS stands for Parent Loans for Undergraduate Students), are federal loans made out to parents of undergraduate students to help pay for the cost of college attendance.

These loans are not subsidized like some other federal loans are so they have the highest interest rates. They include a loan fee, and repayment starts immediately after disbursement unless a deferment is requested. Loan terms can be as long as 25 years. Until these recent changes parents could borrow any amount up to the total cost of attendance.

Parent PLUS loans first came on the scene in 1980 and they were designed to help middle- and upper-middle class families seeking access to cash to help pay for college. Over the years as the cost of college has astronomically increased, lower-income families have been increasingly offered Parent PLUS loans to help make up for the higher cost of college. Loans that many of these families can really not afford.

According to the Century Foundation, as of 2022, 3.7 million families owe about $104 billion dollars in Parent PLUS loans, with the the debt burden falling the most on low-income black families. Clearly something has got to give. In 2021 the Wall Street Journal had an investigative piece that implicated several universities, but particularly Baylor University, for pushing these loans on parents who really could not afford them.

Our approach has always been to make funding considerations foundational to the college search and application process and not an afterthought. It makes no sense for a student to be excited about getting into their dream college only to find out that the family has no idea how they will pay for it.

In the CFF College Fully Funded^® program, we have a tried and tested framework to help students get into college with full funding and avoid debt, including Parent PLUS loans. That means our students receive financial aid packages that cover all their costs beyond the expected family contribution so that families do not have to resort to Parent PLUS loans or worse still, private loans, unless they want to.

We are now enrolling students for our Summer 2026 session. If you have a high school junior or younger, or a prospective transfer student and are curious about how our program can help your family reach your college admissions and funding goals, I would love to start a conversation with you to see if our program could be a solution for your family. Our one-of-a-kind college admission coaching program focuses solely on helping students secure college acceptance with full funding, setting them up for a debt-free future.

I look forward to talking with you soon and discovering together what’s possible for your family.

To college fully funded,

Dr. Faith Okpotor Founder and CFF Head Coach National Center for Higher Education Access Award-winning academic and tenured professor

​