New Parent PLUS loan limits could make paying for college harder for families

New limits on federal Parent PLUS loans could make it harder for some families to pay for their children's college education.

Changes to the federal Parent PLUS Loan program took effect July 1, capping how much parents can borrow at $20,000 per year and $65,000 per student in total.

As a result, many families may need to explore other ways to cover college costs, including institutional or private loans, scholarships and grants.

WJZ spoke with a wealth management advisor about what parents affected by the changes should consider.

With college costs continuing to rise, he recommends that families give community colleges greater consideration as a way to save money.

"One of the really smart decisions we're seeing a lot of clients make is that they can start out with a community college for the first few years and then transfer to a four-year college to finish. Now, while this might not provide the conventional college experience, it could cut the cost of their tuition by greater than 50%," said Gray Shannahan of Palmieri & Shannahan.

Students who borrowed through the Parent PLUS program before July 1 are not immediately subject to the new limits. They may continue borrowing under the previous rules for up to three years, provided they remain continuously enrolled in the same program of study at the same school.

There are also changes to Parent PLUS repayment options.

Parents who take out loans after July 1 are limited to a new tiered standard repayment plan, which offers fixed monthly payments over a period of 10 to 25 years.