In July Congress passed Trump's Big Beautiful Bill, which has a big impact on federal college loans — low-interest-rate loans that millions rely on to afford degrees.
This impacts a lot of single parents.
While Republicans say this will force universities to lower their tuition and fees, experts warn this will force many families to take out private student loans with their higher interest rates and lower protections.
Today about 6% of undergraduate students take out private loans, and the average annual private loan amount borrowed by undergraduates was $14,200, according to The College Board.
Whether you’re a single mother returning to school or co-signing a loan for your child, private student loans can be a useful but complex tool with significant risk.
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2026 Federal Student Loan Changes for Single Moms
Here's a summary of the BBB changes to federal student loans:
| Group | Before 2025 (Pre-BBB) | After July 1, 2026 (Under BBB) |
|---|---|---|
| Single Moms Co-signing | Could help their children by co-signing Parent PLUS loans (no cap, full cost allowed) | Parent PLUS capped at $20,000/year, $65,000 lifetime per child; likely need private loans |
| Independent Undergrad Students (includes many single moms) | Eligible for up to $12,500/year, $57,500 lifetime in federal loans | No changes |
| Parents (All) | Could borrow unlimited Parent PLUS loans regardless of income or credit | Capped at $65,000 lifetime; no access to income-driven repayment options |
| Grad Students (General) | Could combine $20,500/year unsubsidized + unlimited Grad PLUS for full tuition coverage | Federal aid capped at $100,000 total or $200,000 for law, dental and medical degrees |
Private student loans have always been a worse deal that federal student loans — though they have a role in financing a degree. Aside from higher interest rates, the biggest issue is the higher lending limit — so students and their co-signers (usually parents!) get stuck with loan totals that are far more than a first-year salary after earning a degree.
43 single mom grants and scholarships
| Factor | Federal Student Loans (Undergrad) | Private Student Loans |
|---|---|---|
| Eligibility | Must complete FAFSA | Based on credit score, income, and often requires co-signer |
| Loan Types | Direct Subsidized and Unsubsidized loans | Varies by lender (Sallie Mae, Discover, SoFi, etc.) |
| Interest Rates (2024–25) | Fixed: 6.53% for undergrad loans | Variable: 5% – 17%+ Fixed: 4% – 14%+ |
| Loan Limits | $5,500 – $7,500/year (dependent students); lifetime cap $31,000 | Varies by lender, often up to cost of attendance |
| Subsidized Interest | Yes (government pays while in school for subsidized loans) | No (interest accrues immediately) |
| Repayment Start | 6-month grace period after leaving school | Varies: may begin immediately, interest-only, or deferred |
| Repayment Plans | Multiple options, including income-driven repayment (IDR) | Limited flexibility; usually fixed monthly payments |
| Forgiveness Options | Eligible for Public Service Loan Forgiveness and IDR forgiveness | None |
| Deferment / Forbearance | Available in hardship or during grad school | Varies; some lenders offer hardship options |
| Co-Signer Required? | No | Often yes, especially for students without strong credit/income |
| Credit Check Required? | No (except for Parent PLUS Loans) | Yes |
| Refinancing Available? | Only via private lenders (loses federal protections) | Yes, if credit improves |
| Pros | Lower rates for many; flexible repayment; federal protections | May borrow more; sometimes lower rates for top credit borrowers |
| Cons | Lower borrowing limits; capped aid; interest still accrues | Higher rates; no forgiveness; less flexible terms |
If You’re Going Back to School
Federal student aid should always be your first stop. Complete the FAFSA (Free Application for Federal Student Aid) to qualify for government grants, work-study programs, and federal loans that offer better rates and more protections than private loans.
But when federal aid and scholarships fall short, private student loans may fill the gap. Students returning to school often face a heavy academic workload, including essays, assignments, and projects. For those needing help managing these tasks, services like do my paper can provide professional assistance, allowing you to focus on your studies and career planning. The BBB changes mean that you can still access up to $12,500/year and $57,500 lifetime limit in federal loans for undergraduate education.
For graduate school federal aid will now be capped at $100,000 total (or $200,000 for certain degrees). Private loans may be your only option.
Going back to school at 30 or 40: Is it worth it for single moms?
What to consider:
- Credit requirements: Private lenders base interest rates on your credit score and income. As a single mom, especially if your income is low or you're rebuilding your credit, you may face higher interest rates—or may need a co-signer yourself.
- Repayment flexibility: Federal loans offer income-driven repayment plans and deferment options. Many private student loans require repayment immediately, including while you are in school.
- Long-term debt: If you’re returning to school to boost your income, weigh the cost of loans against potential earnings. Consider community colleges or certificate programs that provide solid career paths at a lower cost.
If You’re Co-Signing for Your Child
As of July 2, 2026, parents will no longer be able to unlimited funds—but instead face a $65,000 cap per child.
Co-signing a private loan can feel like the only option. But it’s a serious financial commitment that comes with a lot more risk than a federal loan.
Co-signing means:
- Shared responsibility: If your child misses a payment or defaults, you’re on the hook. It impacts your credit just as much as theirs.
- Affects your credit profile: Even if payments are current, the loan appears on your credit report and may affect your ability to qualify for a mortgage, auto loan, or other credit in the future.
- Co-signer release is not guaranteed: Some lenders offer co-signer release after a certain number of on-time payments, but it’s not automatic—and your child must apply for it.
Before agreeing to co-sign, have an honest conversation with your kid about responsibility, repayment, and contingency plans if they struggle financially after graduation. Consider getting your agreement in writing.
This post has all the details from experts about assessing whether you can or should afford a college degree (for yourself or your kid): Should you be required to pay for your kids' college?
Should single moms take a private student loan?
I feel strongly that it is a mistake to take a “sky's the limit!” approach to financing an education. While in decades past, it may have made sense to go into considerable debt at a prestigious university or for a medical or law degree, today physicians and attorneys often struggle to earn enough to justify their student debt.
A good rule of thumb is to only take as much total student debt as equal to your expected first year salary after graduation. So, if you are in school to earn an accounting degree, and average first-year salaries are about $50,000 in your area, your total student debt upon graduation should not exceed $50,000.
If private loans are part of this equation, check out our trusted partners:
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