As of July 1, 2026, new Parent PLUS borrowers are capped at $20,000 per dependent student per year and $65,000 for that student’s entire undergraduate career. Before this change, Parent PLUS went all the way up to the school’s full certified cost of attendance.

For families at expensive schools, that program was the entire plan. It closed whatever the aid package didn’t, and it did so without much scrutiny. The problem you notice – $20,000 per year doesn’t translate to $65,000 if your child attends college for 4 or even 5 years… that’s a problem.

In partnership with Student Choice, we’re going to break down what borrowing for college looks like, and why you may want to consider an education line of credit.

Get started with Student Choice →

What The Cap Actually Leaves You With

Start with the math, because it’s stark once you write it down.

A dependent undergraduate can borrow $5,500 in their own name as a freshman, $6,500 as a sophomore, and $7,500 as a junior or senior — figures that haven’t moved in over a decade, with a $31,000 lifetime aggregate. 

Add the new Parent PLUS ceiling of $20,000 a year and $65,000 total.

And the aggregate matters more than the annual number, a family that leans on the full $20,000 in each of the first three years has $5,000 of Parent PLUS left for senior year.

How Do You Cover This Gap?

For many families, private student loans are the key alternative to covering this gap. Parent PLUS Loan rates are over 9%, plus they have a 4.228% origination fee. That is expensive. 

If you can get a private student loan for less than that, it can make a lot of sense to just take out a private student loan or an education line of credit.

You need to think through the entire way to pay for college. You might think the Parent PLUS Loan is smart upfront, but look at the gap it leaves you in the end, and that could be a challenge. That’s why we think that families should always shop Parent PLUS Loans against private loans to see if they can get a better deal.

See which credit unions you can join through Student Choice →

You don’t do it once. You do it every year.

Most private student loans are one-year loans. They’re certified for the academic year, disbursed by term, and finished. The next August, your student needs another one.

Get The Approval Once Instead of Four Times

This is the specific reason an education line of credit fits.

You apply one time and are approved for a limit that can cover the degree, then draw against it as each term’s bill comes due. Interest accrues only on what you’ve actually drawn.

For a cosigner, the meaningful change is the underwriting timeline. You are not filing a fresh, fully documented application every August and hoping your financial picture still clears. The approval is done. Draws remain subject to annual review and to your student meeting the school’s Satisfactory Academic Progress standard, but that is a lighter process than starting over four separate times.

Student Choice runs the largest network, with 223 credit unions offering education lines of credit. Each credit union sets its own underwriting, rates, and terms, so compare several rather than taking the first approval. The credit union products carry no origination fees (worth weighing against the 4.228% that comes off the top of every Parent PLUS disbursement) no prepayment penalties, no draw fees, and offer a 0.25% rate reduction for autopay.

Compare credit union education lines of credit →

Cosigner Release, and How To Actually Get It

Multi-year approval doesn’t mean you’re on the loan forever. Credit unions in the network offer cosigner release, which means you can request removal from the loan after a set number of on-time payments (typically 36-48 depending which credit union you select). 

Typically, full principal-and-interest payments are required, and the student must independently qualifying on their own credit and income.

What to do before you sign anything this month

Pull your own credit. Know your score and your DTI before an underwriter does. Under the old system you never had to care. Now you do.

Model all four years. Add up what you’d cosign across the degree, check it against your DTI and your retirement timeline, and see whether year four is plausible. If it isn’t, the plan changes now rather than in 2029.

Take the federal loan in your student’s name first. They carry income-driven repayment and loan forgiveness protections, and they require no cosigner.

Once you know what you’re going to need to pay, you can make a plan to ensure it happens!

Find your credit union and get approved for all four years →