How Student Loans Became Part Of Estate Planning

FOR GENERATIONS, THE FEDERAL GOVERNMENT served as the lender of last resort for families paying for higher education, and often the lender of first resort, too. Parents could borrow the full cost of a child’ s undergraduate degree through Parent PLUS loans. Graduate and professional students could borrow up to the full cost of attendance through the Grad PLUS program. However high the sticker price climbed, Washington would lend against it. That era ended on July 1, 2026. Under the loan provisions of the One Big Beautiful Bill Act, signed into law on July 4, 2025, the federal government now imposes hard ceilings on education borrowing for new loans. For affluent families, this is less a financing problem than a planning one. The money that used to come from a federal loan now has to come from somewhere else, and for families with taxable estates, the decision now involves the family’ s estate plan.