Healthcare leaders and organizations expressed concern that a bill that would cut medical students’ access to student loans and limit loan forgiveness programs could worsen the physician shortage and reduce the number of residents working in underserved communities, The New York Times reported June 9.
“We ask that carveouts be provided for medical school education in recognition of the unique role that physicians play in society and in alignment with the heavy educational burden that they undertake to care for those most in need,” James Madara, MD, CEO of the AMA, said in a May 20 letter sent to lawmakers.
Here are seven things to know:
1. The “One Big Beautiful Bill Act” — which passed the House May 22 and is with the Senate, as of June 10 — proposes sweeping cuts to Medicaid and other healthcare programs. The bill includes a proposal to eliminate the Grad PLUS loan program for graduate students, including medical students. It would also cap federal loans for graduate and professional students to $150,000, as well as limit eligibility for the Public Service Loan Forgiveness program by no longer allowing loan repayment made during medical residency to count toward forgiveness. If passed, the cuts would start for new borrowers in the 2026 to 2027 academic year and for existing borrowers in 2029 to 2030.
2. U.S. medical students graduated with an average debt of $206,924 in 2023, according to data from the Association of American Medical Colleges. That year, more than 70% of medical school students graduated with significant levels of educational debt, the AMA said.
3. Supporters of the bill say the changes would push medical schools to lower tuition costs and limit taxpayer exposure. However, teaching hospitals and medical schools strongly oppose the provisions, warning it could worsen the physician shortage.
4. The student loan provisions would limit how many students could afford to attend medical school, leaving lower income students to scramble for funding streams. Supporters of the bill told the Times that there are no provisions that prevent colleges from providing additional financial aid and private student loans are still available. However, a number of medical schools told the Times that providing extra support is not an option. Osteopathic medicine schools enroll almost one-third of future physicians, but are not attached to universities with foundations. And academic medical centers have lost millions in research grants, leading to severe financial strain.
“We urge you to maintain subsidized and GRAD Plus loans, allow parents to have better borrowing terms to help fund their children’s higher education, and not cap the amount that an individual can borrow to pay for medical school,” Dr. Madara said.
5. The AMA is also urging lawmakers to adjust provisions that would make residents ineligible for the Public Service Loan Forgiveness program, in which over 88% of medical student graduates said they intend to participate. Future primary care physicians are more likely to use this program and are incentivized by it to work in underserved communities. But if residents cannot get loan forgiveness, fewer physicians would end up working in underserved and rural areas, and fewer might choose primary care to begin with.
“Moreover, nonphysician practitioners, including nurse practitioners and physician assistants, are currently able to count their training time toward loan forgiveness under PSLF,” the AMA said. “Proposing to exclude physicians from the same eligibility raises concerns about fairness especially given that physicians often enter residency with significantly more education and training than NPPs and, as they progress through their residency, ultimately take on larger workloads and more complicated tasks than their NPP counterparts. Instead, all resident physicians should have access to PSLF during their training years since regardless of whether they are working in a public, private, or nonprofit setting, they are working for low wages to better public health.”
6. The AMA did applaud provisions under the Repayment Assistance Plan that would allow borrowers who make full- and on-time payments to avoid interest accrual.
7. The proposed budget eliminates funding for graduate medical education at 59 children’s hospitals, where more than half of all pediatricians and pediatric specialists are trained. This could lead to worsening shortages for this specialty, according to the Times.
