Healthcare groups are warning that caps on federal loan limits for medical students passed under the One Big Beautiful Bill Act could worsen the nation’s physician shortage.
The legislation eliminates the federal Grad PLUS loan program and places a $200,000 lifetime cap on federal loans for medical students starting in 2026. The changes have drawn concern from medical schools, healthcare leaders and policy advocates, who say it could reduce access to medical education and push students away from lower-paying specialties.
The timing is critical, as the U.S. faces a projected shortage of up to 86,000 physicians by 2036. Here is a closer look at how the cost of medical education, student debt and specialty choice intersect.
Average debt load
1. Medical students who graduated in 2024 left with an average debt of $212,341, according to data from the Association of American Medical Colleges. That figure includes tuition and living expenses, the latter often covered through Grad PLUS loans, which are being phased out.
2. About 71% of medical students graduated with debt last year, and more than half owed at least $200,000 — the new cap on federal borrowing under the new law. That means a growing number of students may need to turn to private loans to cover remaining costs.
3. Average debt levels vary by institution, ranging from more than $317,000 at some schools to just over $100,000 at others. A full breakdown of the schools where graduates incur the most and least debt can be found here.
OBBB ends key loan program, imposes new limits
4. The law eliminates the Grad PLUS program starting in the 2026-27 academic year for new borrowers. That program allowed students to borrow up to the full cost of attendance, including rent, food and other living expenses.
5. Medical students will be limited to $200,000 in federal loans. Supporters argue the cap will encourage schools to rein in tuition. But the AAMC warns it could deter students from low-income, rural and non-traditional backgrounds from pursuing a career in medicine.
Supporters of the law say the system needed change
6. Republican lawmakers backing the law say medical education has become too costly and that federal loan policy has enabled tuition inflation. The One Big Beautiful Bill Act’s sponsors estimate the loan changes will save around $35 billion by 2034 and reduce taxpayer exposure to unpaid graduate debt.
7. Proponents have said removing unlimited federal loans could pressure schools to reduce tuition or increase scholarships, though critics argue this outcome is not guaranteed. In the meantime, many students may be forced to turn to private loans, which typically carry higher interest rates and fewer borrower protections.
Affect on specialty decisions
8. Medical leaders have said any added financial strain may push students toward higher-paying specialties and away from fields such as pediatrics, obstetrics/gynecology, internal medicine and family medicine.
“What bothers me most is when someone tells me, ‘This is what I want to do, but I can’t afford to do it,'” Erik Summers, MD, chief medical officer of the Medical University of South Carolina in Charleston, told Becker’s in June. “That’s heartbreaking. First, we’re losing their passion. And second, they may end up in a specialty they don’t love, which isn’t good for them or for their patients.”
What’s ahead
9. Medical schools are expected to evaluate new institutional support programs, including scholarships or in-house loan funds, to help students adapt. The AAMC, which opposed the changes, said it will monitor how the new law affects enrollment trends, diversity efforts and residency decisions.
“The AAMC is deeply concerned that eliminating the Grad PLUS loan program and capping federal loans will create significant financial barriers for medical students — especially those from low-income, rural and non-traditional backgrounds,” Kristen Earle, director of student financial services at the AAMC, said in a statement to Becker’s. “Nearly 40% of students have relied on Grad PLUS to finance their education and losing that access may force many to take on private loans that have fewer borrower protections and stricter credit requirements, which could deter prospective students from entering the field.
“In a time of a significant projected physician shortage, we should be making medical education more accessible, not less,” Ms. Earle said.
