How can I change the name of players above their heads

It is hard to do that now use a plugin called nick namer.
EDIT: link https://www.spigotmc.org/resources/nicknamer-integrated-api.5341/

 

As for 1.8 and up the displayname method does no longer changes the name of the player.It does change it in chat only.

 

You could do it using packets. What you have to do is trick the client into thinking that it is another "player" that joins the game!
To do this:
1. New player joins
2. PacketPlayOutPlayerInfo remove player to all other clients
3. Change the listname of that player
4. PacketPlayOutPlayerInfo add player to all other clients

 

Then just support the multilineapi. It changes the nametag and supports multiple lines. https://www.spigotmc.org/resources/multilineapi.33473/

 

You can add all players into a Team and set the nameTagVisibility option to never.

 

You could use PacketPlayOutNamedEntitySpawnEvent
And spawn an entity with the same entityId as the player.