July 1, 2026 has come and gone; however, student loans have not. Most students will be starting or returning to their educational institutions beginning in August and facing the reality that financial aid isn’t what it used to be. Institutions have been inundated by students who have unmet financial need and are scrambling to find financial resources to cover college costs.
I have written about the financial aid crisis and the fact that federal financial aid will not cover the costs that students are confronting. The standby Parent PLUS and Grad PLUS loans are now sharply limited. Parent PLUS loans are capped at $20,000 a year and $65,000 lifetime per dependent student for most new borrowers. Grad PLUS loans have been eliminated for new borrowers, and graduate borrowing faces new annual and aggregate limits. This leaves a gap that is forcing students and their families to scramble to find financing that either does not exist for them or is prohibitively costly and complicated. We should be sharing ways in which students can find the resources they need to pursue and complete their education.
A major portion of federal student loans is held by individuals 50 years of age or older, and they, too, have been significantly impacted by the crisis. They are still paying student loan payments for their own education or as borrowers of loans taken out for their children. The dollar amount for the over-50 group is staggering: more than $450 billion and growing. The results are causing this population to continue to work to repay these loans when they should be enjoying their retirement.
The system puts far more effort into originating loans than into helping people manage or resolve them.
If they work in the public or government sector they might qualify for Public Service Loan Forgiveness. While student loans are marketed to almost all students in school, far less attention is given to ways in which to manage or forgive them after graduation. Lenders spend millions to recruit borrowers for loans but not to help those borrowers have them forgiven. The same can be said about many other types of loans, of course. Credit cards, auto loans, personal loans, and mortgages all follow a similar pattern: heavy investment in getting people to borrow, far less support once the loan is on the books. Student loans stand out because the debt is largely non-dischargeable in bankruptcy, the available relief programs are complex and poorly explained, and the decision to borrow is often driven by emotion rather than pure financial calculation. And remember that Parent PLUS loans are made to parents, which means they are responsible for the repayment of these loans long after those for whom they took the loans completed their education. While millions are spent on getting these individuals to take a loan, little is done to help them repay or have these loans forgiven or payments reduced. These borrowers could also pursue income-driven repayment or Public Service Loan Forgiveness and, in some cases, have remaining balances cancelled after 10 years of qualifying payments if they knew how to apply for these opportunities.
In short, the system puts far more effort into originating loans than into helping people manage or resolve them. That imbalance leaves both current students and older borrowers carrying a heavier burden than necessary.