Last Saturday morning I was on the sideline of a summer soccer camp I’ve been coaching for years. It was the kind of June heat that makes you question every life decision you’ve ever made, and the kids on the field had about forty-five minutes left before water break. I was watching a group of rising juniors run a drill when one of the dads — a guy I’ve known for a few years, smart, methodical, the kind of parent who reads everything — walked over and said, almost apologetically, “Hey Chris. I’ve been doing some research on Parent PLUS loans and I think we’re in trouble.”
He wasn’t wrong. He’d just discovered that the federal borrowing rules they’d been counting on for the last year — the unlimited Parent PLUS loan structure that was supposed to cover whatever gap remained after scholarships and savings — had quietly been capped by Congress. Starting July 1, 2026. Which was, at that moment, less than two weeks away.
Here’s what I’ve learned in 25 years of doing this: the families who get into trouble are almost never the ones who didn’t care. They’re the ones who were working hard, planning ahead — but planning based on rules that had already changed under their feet.
This week’s update covers four of those rule changes. Some are new. Some have been building for a while. All of them matter, whether you have a junior, a sophomore, or a freshman sitting in your house right now.
At a Glance
- Parent PLUS loans capped at $20,000/year starting July 1 — unlimited borrowing era is over
- Harvard, Yale, Stanford, MIT, Penn, Cornell, Dartmouth, Brown, Caltech now require SAT or ACT
- US News 2026 rankings settled: Princeton, MIT, Harvard hold the top three spots
- TRIO college access programs face $50M funding redirect; FY27 aid proposals put subsidized loans at risk
“The families who get into trouble aren’t the ones who didn’t care. They’re the ones planning based on rules that already changed under their feet.”
Financial Aid & Scholarships
This is the story of the week. The One Big Beautiful Bill Act reshapes federal student borrowing in ways that take effect July 1, 2026. Here’s what changed:
- Parent PLUS Loans are now capped. $20,000 per year maximum. $65,000 lifetime limit per student. Previously, there was no cap — parents could borrow whatever remained after other aid to reach Cost of Attendance. That era is over.
- Federal Graduate PLUS Loans are phased out for new graduate students beginning July 1.
- A $257,500 lifetime borrowing limit now applies to all federal student loans (excluding Parent PLUS). Students pursuing medicine, law, or extended graduate programs will hit this ceiling.
- Parent PLUS repayment flexibility disappears for new loans: all Parent PLUS loans taken out on or after July 1 are eligible only for the Standard Repayment Plan. Income-driven options are gone for new borrowers.
There’s a transition provision: if a parent received a Parent PLUS disbursement before July 1 while the student was enrolled in a qualifying program, they may continue borrowing under the old rules for up to three academic years or until the student finishes their program — whichever comes first.
On the brighter side, the 2026–27 FAFSA launched September 24 — the earliest in three years. New features include real-time Student Aid Index (SAI) visibility the moment you submit, ITIN tax import from the IRS for families using Individual Tax Identification Numbers, and multi-student prefill for families with more than one child on FAFSA. These are meaningful quality-of-life improvements worth taking advantage of.
What This Means
For parents: the conversation about which schools your student can actually afford just got more urgent. If you were counting on Parent PLUS to cover gaps at a $55,000–$65,000/year school, run the numbers again. For students: merit aid is now more important than ever — not as a bonus, but as a financial necessity. This is exactly why building an application around your authentic strengths — and finding schools where you’re a genuine fit — isn’t just good admissions strategy. It’s good financial planning.
Admissions Policy Changes
The pandemic-era experiment with test-optional admissions is effectively over at America’s most selective universities. For the 2026–27 admissions cycle, Harvard, Yale, Dartmouth, Brown, Cornell, MIT, Caltech, Stanford, and Penn all require standardized test scores. Princeton remains test-optional for one more cycle.
Yale has adopted a test-flexible approach — requiring submission of SAT, ACT, AP, or IB scores. Harvard has been unambiguous: the SAT or ACT is required, with very limited exceptions for documented access barriers.
It’s worth being precise here. Over 90% of ranked four-year colleges and universities in the U.S. remain test-optional for 2026–27. This shift is concentrated at the very tip of the selectivity pyramid. But that tip tends to set the tone. Don’t be surprised if more schools follow over the next two to three years.
What This Means
For students: if you have a score above a school’s 50th percentile, submit it — regardless of whether the school is technically test-optional. If you don’t have a competitive score and you’re targeting elite schools, the calculus has changed. You need to either invest in serious test prep or realistically reassess your list. For parents: this is a conversation to have now, not in January of senior year. “Test-optional” was never a free pass — and at the top tier, it no longer exists at all.
“Test-optional was never a free pass. At the top tier, it no longer exists at all. The question isn’t whether to take the test. It’s whether you’re chasing the right schools.”
College Rankings & Data
The 2026 US News Best Colleges rankings, released last September, reflect an unusually quiet year. Princeton, MIT, and Harvard hold the top three spots among National Universities — and movement throughout the rankings was minimal. Stability, for once, is the headline.
Behind the scenes, US News made some methodological adjustments: graduation and retention calculations now require a minimum cohort of 25 students (up from 20), spending per student is measured by credit hours rather than enrollment designations, and SAT/ACT scores were removed as a factor for some smaller regional categories where fewer than 10 schools reported scores.
What This Means
I’ll say what I say every time rankings come out: the number next to a school’s name tells you almost nothing about whether it’s the right school for your student. What tells you something? Graduation rates. Career outcomes. Average debt at graduation. Whether your student is going to thrive there — academically, socially, financially. Use rankings as one data point among many, not as a finish line.
Legal & Legislative Developments
Three years after the Supreme Court’s Students for Fair Admissions ruling ended race-conscious admissions, the higher education landscape is still adjusting. NACAC is working with EducationCounsel to help colleges better document and communicate the factors shaping their enrollment decisions — a transparency framework designed to articulate why institutions admit who they admit, without race as a formal consideration.
More immediately concerning: the Department of Education has redirected approximately $50 million in TRIO funding — programs like Upward Bound and Talent Search that have historically supported low-income, first-generation, and underserved students — toward state-level priorities and administration-defined objectives. Separately, a House FY27 spending proposal would eliminate subsidized student loans and the Federal Supplemental Educational Opportunity Grant (FSEOG), while also reducing Federal Work-Study funding.
These are proposals, not law. But they signal the direction of federal higher education policy in a way families should pay attention to.
What This Means
For first-generation students and lower-income families: programs that have historically helped you navigate this process are under pressure. Start now. Don’t wait for programs that may not look the same in a year. For all families: the financial aid landscape is changing faster than most people realize. Conservative financial planning — knowing your real number before you commit to any school — has never been more important.
What to Do This Week
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Run your Parent PLUS numbers. If you were planning to borrow more than $20,000/year to cover college costs, your plan needs revision. Do this before committing to any school’s acceptance.
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Students: register for the SAT or ACT. If you’re a rising junior or senior targeting selective schools, a strong test score is no longer optional at the top tier. Start prep now.
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Complete the 2026–27 FAFSA early. The form is live. New features let you see your SAI in real time. Filing early gives you maximum options at schools with limited aid funds.
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Revisit your college list with financial fit in mind. Merit aid at schools where your student genuinely stands out has never been more valuable. Are you targeting the right schools for the right reasons?
Not sure what any of this means for your student?
That’s what I’m here for. Let’s talk through your specific situation — college list, testing strategy, financial aid picture — and build a plan that actually works.
Get in TouchSee you next week —
Christopher Parsons
College Planning Center
Carpe diem.
