Major Impacts of the “Big Beautiful Bill Act” on Future Medical Students (Fall 2026 and Beyond)

Nate Swanson
Jul 6
32 min read

TL;DR - for if you just want to know what's up

Graduate PLUS loans eliminated: Future medical students lose access to unlimited federal loans beyond unsubsidized Stafford limits starting July 2026.
Strict new loan caps: Borrowing is capped at ~$50,000 per year and ~$200,000 total, forcing students to seek private loans or other funding for remaining costs.
PSLF remains available: Public Service Loan Forgiveness still applies after 10 years of nonprofit/public service, including residency years.
Repayment plans streamlined: New borrowers must choose between a fixed standard plan or the 30-year income-driven Repayment Assistance Plan (RAP).
Deferment and forbearance tightened: Economic hardship deferment is eliminated, but residents can pause loans interest-free for up to 4 years.
Forgiveness tax liability returns: Non-PSLF loan forgiveness after 30 years will again be taxed as income starting in 2026.
Access to medical school impacted: Students from lower-income backgrounds may struggle more to fund medical school, risking greater reliance on private debt and affecting workforce diversity.

How the “Big Beautiful Bill Act” Is Shaking Up Medical Student Loans – And What It Means for Future Doctors

On July 3, 2025, Congress narrowly passed the sweeping “One Big Beautiful Bill Act,” a massive budget package touted by supporters as a win for taxpayers and accountability. Buried within its 870 pages is a dramatic overhaul of student loan programs – changes that will directly hit U.S. medical students and pre-med hopefuls. With medical school already the most expensive professional education in the country (over 70% of med students graduate with debt averaging $212,000+), these new loan caps and rules have sparked alarm across the medical community. Critics – including major physician groups – warn that the act will make medical school less attainable, push students towards risky private loans, and even worsen the nation’s growing doctor shortage. This report examines how the current system works, what the Big Beautiful Bill Act changes, and what reforms are truly needed to fix the physician pipeline.

The Status Quo: Crushing Debt and a Broken Pipeline

For decades, the cost of becoming a doctor in the U.S. has soared. Medical students must complete four years of medical school (often with six-figure tuition), then 3–7 years of residency training at modest stipends before they can practice independently. It’s an arduous path requiring over 10,000 hours of clinical training, and it doesn’t come cheap. In 2024, the median four-year cost of attendance (tuition plus living expenses) for an in-state public medical school was $286,000, and a whopping $391,000 at a private medical school. Unsurprisingly, most students must borrow heavily: more than 7 in 10 med students graduate with debt, with a median education debt around $205,000 (Class of 2024). Many shoulder even more – debts of $300,000+ are not uncommon for those attending higher-cost programs or with undergraduate loans on top.

How do students finance these staggering sums? Until now, the federal student loan system has been the lifeline. Medical students rely on two main federal loan types:

Direct Unsubsidized (“Stafford”) Loans: These have annual caps (currently about $42,700 per year for med students) and a lifetime graduate limit of $138,500. They accrue interest during school (no subsidies for grad students since 2012) and carry a fixed interest rate (around 7% in recent years). Med students typically max out these unsubsidized loans first.
Direct Graduate PLUS Loans: Known simply as Grad PLUS, these federal loans fill the gap between the Unsubsidized cap and the full cost of attendance. Grad PLUS has no fixed dollar limit – students can borrow up to 100% of their school’s certified cost of attendance (including living expenses). The only requirements are a basic credit check (no adverse credit history) and the willingness to pay a higher interest rate (about 1% above the Unsubsidized rate). Grad PLUS essentially acts as a “safety valve,” ensuring that no accepted med student is prevented from enrolling purely by lack of funds – at least as long as they’re willing to take on the debt.

Together, these federal loans mean that virtually any medical student can finance their education, regardless of personal wealth. This broad access to loans has been a double-edged sword. On one hand, it enables talented students from middle and lower-income backgrounds to pursue medicine. (Indeed, between one-quarter and one-third of medical students came from families in the top 5% income bracket, underscoring an existing socio-economic skew – but the majority do not come from extreme wealth, so loans remain critical for them.) On the other hand, it leaves new doctors saddled with enormous debt burdens that can influence their career choices and personal lives for years.

Managing the debt has thus become an integral part of a medical trainee’s life. During residency – when new MDs might earn $60,000 a year working 80-hour weeks – most cannot afford hefty loan payments. Fortunately, income-driven repayment (IDR) plans offered relief. In recent years, the PAYE/REPAYE plans and most recently the Biden administration’s SAVE plan allowed borrowers to make payments pegged to their income – often $0 to a few hundred dollars a month for residents – and forgave any interest that those low payments didn’t cover. For example, under the new SAVE plan (effective 2024), a single resident earning $60,000 would pay around $227/month, and if that doesn’t cover all the interest, the unpaid interest is wiped out each month. This prevents balances from ballooning during training. After 20–25 years on IDR (or 10 years if using Public Service Loan Forgiveness, discussed below), any remaining balance is forgiven.

Public Service Loan Forgiveness (PSLF) has been especially pivotal for medical professionals. PSLF forgives all remaining federal loan debt after 120 qualifying payments (10 years) for those who work full-time in nonprofit or government jobs. Crucially, because most teaching hospitals and academic medical centers are nonprofit, the years spent in residency and fellowship count toward PSLF under current rules. This means a newly minted doctor who spends e.g. 4 years in residency at a nonprofit hospital and then works 6 years as an attending physician at a nonprofit hospital or clinic can achieve forgiveness. In practice, many physicians who pursue lower-paying specialties (pediatrics, family medicine, academic medicine, veterans’ health, etc.) have banked on PSLF to wipe out their remaining debt a decade out of school. In a 2024 AAMC survey, 63% of graduating medical students said they plan to enter a loan forgiveness program, and of those, 88% intended to pursue PSLF. The PSLF safety net has allowed some doctors to choose vital but less lucrative fields without fear of debt ruin. “PSLF is not just a policy – it’s a lifeline that makes service-driven medicine possible,” says Dr. Leana Nápoles, a new pediatrician who chose to work in an underserved clinic knowing her loans would be forgiven after 10 years.

Despite these programs, the current system has serious flaws. Medical tuition has outpaced inflation for decades (growing 81% from 2000 to 2021, after adjusting for inflation). Students from less privileged backgrounds still face enormous financial stress. Many start families later or forego certain specialties due to debt. The U.S. physician workforce also lacks diversity partly due to financial barriers – even with loans available, the prospect of $200K+ debt can dissuade capable students from low-income or underrepresented communities from applying to med school. And while IDR and PSLF help with repayment, they don’t address the root problem of sky-high cost – they merely manage its symptoms by shifting the burden onto the federal government (in the case of eventual forgiveness) or onto the individual for longer periods.

In short, by mid-2025, the medical education pipeline was already under strain: high costs, high debt, complex repayment plans, and a looming doctor shortage. It’s against this backdrop that the One Big Beautiful Bill Act arrived – and immediately sparked controversy.

What the “Big Beautiful Bill Act” Does: Loan Caps, Gone Grad PLUS, and New Rules

The One Big Beautiful Bill Act of 2025 (OBBBA) – nicknamed by supporters as “big and beautiful” – is a budget reconciliation bill that enacts sweeping changes across numerous sectors. Tucked in its education section are major reforms to student lending that fundamentally alter how future students (including medical and other graduate students) can borrow and repay. If you’re a medical student or planning to become one, here are the key changes you need to know:

1. Federal Loan Caps for Graduate/Professional Students – and the End of Grad PLUS: The new law eliminates the Grad PLUS loan program entirely for loans disbursed after July 1, 2026. No longer will graduate students have a blank check up to the cost of attendance. In its place, the law imposes tighter borrowing limits on federal loans:
- Annual limit: Graduate/professional students can only borrow up to the national median cost of their program per year in federal unsubsidized loans. In practical terms, if the median annual cost of attendance for medical school is (for example) around $60,000, a student at a pricier school charging $80,000/year would not be able to cover that full amount with federal loans – they would hit the annual cap at ~$60K and have to find the rest elsewhere.
- Aggregate limit: Perhaps more critically, there is now an overall cap on total federal loans for graduate/professional education. For medical students, the House version set this cap at $150,000, while the Senate’s version raised it to $200,000. The final law is expected to adopt the higher ~$200K cap for medical and law students (and around $150K for other grad programs). This cap is inclusive of Unsubsidized loans – since Grad PLUS is gone, Unsubsidized loans are now the only game in town federally. Notably, there’s an additional ~$50,000 allowance for prior undergraduate borrowing. So a student who already has $50K in undergrad loans could borrow up to ~$150K more for med school, whereas someone with no undergrad debt could potentially borrow the full $200K for med school. In any case, the days of graduating with $300K+ all in federal loans are over – future med students will be cut off at around $200K of federal borrowing.
What happens if med school costs more than these caps? Simply put, students will have to seek other financing. That could mean private student loans, which often require a creditworthy co-signer and charge higher interest (private loan rates for grad students currently can range from 5% up to 16% depending on credit). Unlike federal loans, private loans offer no income-driven repayment or forgiveness options. Getting approved can be especially hard for those without a parent or relative able to co-sign – a hurdle that many med students from first-generation or lower-income families will struggle to clear. “The consequence is that it’s the low-income students who are going to suffer the most,” warns David Bergman of the American Association of Colleges of Osteopathic Medicine. “They may not have great credit or a co-signer, so they may not be able to get the loans [they need]. Or they may get higher-rate loans that put them further in debt.”For some aspiring doctors, this cap could be an absolute barrier. “Limiting federal student loan borrowing would make medical school not an option. Period,” says Shae-Marie Stafford-Trujillo, a 23-year-old preparing to apply to med school who has no family safety net and is already carrying undergraduate debt. She’s exactly the kind of high-potential, economically diverse candidate medical schools have been trying to recruit – but if federal loans won’t cover tuition, she doesn’t see a path forward. Stories like hers underscore a real risk: talented students from middle-class or poor backgrounds could be shut out of medicine or forced to take perilous private debt, while those from wealthy families (who can cover costs above $200K) continue unhindered. This threatens to reverse recent, modest gains in socioeconomic diversity among medical students.Even students who do manage to secure private loans or other funding will face higher costs. Federal Grad PLUS loans, while often criticized for enabling large debts, had certain advantages: fixed interest rates (~7–8%), generous deferment options, and built-in protections like Public Service Loan Forgiveness. Losing access to that “one lender of last resort” is a profound change. Dr. Aidan Hintze, who just graduated med school with the help of Grad PLUS loans, worries how future students will cope. “Grad PLUS opened up the opportunity for my wife to stay home [with our kids] while I studied,” he says. “I don’t want medicine to become one of those careers you can only do if you have wealthy parents.” His case is instructive: to make ends meet during medical school at Penn State, Aidan and his family relied on federal loans not just for tuition but also for living costs, essentially substituting for a second income. Under the new regime, students in his situation might hit the borrowing cap before finishing their degree, forcing difficult choices.

It’s worth noting the law has transition provisions: students who have taken out federal loans before July 1, 2026 can generally continue borrowing under the old rules for the remainder of their program (up to a limit of 3 additional years). So, current first- and second-year med students will likely be grandfathered in to finish their degrees with Grad PLUS if needed. But anyone starting med school in Fall 2026 or later will be fully under the new limits.

2. End of Subsidized Loans for Undergraduates: Although this change hits undergrads more than med students, it’s noteworthy: the law eliminates subsidized Stafford loans for undergraduates starting in 2026. Currently, undergrads with financial need receive subsidized loans that don’t accrue interest until after school. Under the new rules, all loans will be unsubsidized. This means future medical students may enter med school with even more undergraduate debt (and interest already accumulated on it). The undergraduate borrowing cap is also set at $50,000. While these specifics are beyond our main focus, the net effect is a pipeline issue: pre-med students from low-income families will face higher debt burden even before they don the white coat, potentially dissuading some from pursuing costly medical training.
3. Fewer Repayment Options – New “Repayment Assistance Plan” (RAP): The Big Beautiful Bill doesn’t just cap how much you can borrow – it also overhauls how you pay it back. It consolidates the jumble of existing income-driven repayment plans into one new plan (and one standard plan) for loans borrowed starting July 1, 2026. Gone will be the current PAYE, REPAYE, and even the generous new SAVE plan for new borrowers. Instead, borrowers will choose between:
- A Standard Plan with fixed payments to pay off the loan in a set time (likely 10 years for smaller loans, up to 25 years for larger – details suggest the standard term could extend up to 25 years for professional school debt).
- A single income-based plan called the Repayment Assistance Plan (RAP).
The Repayment Assistance Plan (RAP) is effectively the only income-driven option going forward. How does RAP differ from today’s IDR plans like SAVE? In some ways it is less generous, in other ways somewhat more pragmatic:
- No true $0 payments: Under current plans, very low-income borrowers (like a resident physician supporting a family) might have $0 monthly payments because income below 225% of poverty level is exempt. Under RAP, every borrower must pay a minimum of $10 per month. Even someone with no income at all would be required to make a token $10 payment. This symbolically ensures “everyone pays something,” but it also means no more full payment deferment for hardship – a notable change for trainees who might otherwise qualify for $0 payments.
- Different income formula: RAP doesn’t use the “discretionary income above 225% of poverty” formula. Instead, it employs a progressive percentage of total income. For example:
  - If income is very low (≤ $10,000), RAP simply sets the payment at $10/month (the minimum).
  - For incomes above that, a sliding scale from 1% up to 10% of income is applied. A rough breakdown might be 1% of income at $10K, scaling up gradually to 10% for high incomes. According to one analysis, a single person making $30,000 would pay about 3% of income (~$75/month) under RAP – whereas under SAVE they might pay $0 because $30K is near the poverty exemption level. On the other hand, a resident making $60,000 might fall in a 5% bracket and pay ~$250/month under RAP (if single), compared to ~$227 under SAVE – fairly similar. For higher incomes (attending physicians), RAP actually caps out at 10% of total income; by contrast, SAVE effectively charges 10% of discretionary income above ~225% poverty, which works out to slightly more than 10% of total income for high earners. Thus, RAP would make very low earners pay more than before, but could let high earners pay slightly less as a fraction of income.
- Longer path to forgiveness: Under current rules, federal loans are forgiven after 20 years of payments for undergrad loans or 25 years for grad loans (on IDR plans). The new RAP plan lengthens this: a 30-year repayment term (360 payments) for forgiveness on all graduate school debt. In short, new medical graduates will be looking at three decades of payments before any remaining balance is forgiven (unless they achieve PSLF). That’s essentially an entire career span – meaning many doctors may fully repay their loans before hitting 30 years, especially with RAP requiring higher contributions as income grows. The longer timeline is clearly aimed at reducing government cost by ensuring most borrowers pay more of their debt.
- Interest won’t explode (and some principal reduction help): One positive carryover: RAP will prevent interest from accruing beyond what the borrower pays. If your calculated RAP payment doesn’t cover all the interest for that month, the remaining interest is forgiven – so your balance won’t increase, as long as you’re in good standing in the plan. This is similar to the SAVE plan’s interest subsidy and is crucial for low-payment borrowers (like residents) to avoid “running in place” on a growing balance. Additionally, RAP promises that if a payment is so low that it doesn’t reduce the principal at least by $50 in a month, the government will chip in the difference toward principal. In essence, they want to guarantee that every month you are knocking something off the principal, however small. For example, suppose you owe so much and earn so little that your $100 RAP payment would otherwise go entirely to interest – under RAP, that full interest gets forgiven and then the plan says, “hey, $100 would have reduced your principal by less than $50 (in fact $0 in this case), so we’ll treat it as if you paid $50 toward principal.” This way, your principal will steadily decline over time even during low-earning years. This is a novel feature not present in current IDR plans.
- Fewer choices & less flexibility: Borrowers with new loans won’t have multiple IDR plans to choose from – it’s RAP or nothing (aside from standard fixed payments). While one can switch from the standard plan to RAP at any time, once on RAP you generally can’t leave it for a different plan unless you refinance or take out new loans. The rationale is to prevent gaming the system by toggling plans. The bottom line is future doctors will have a more structured, potentially less forgiving repayment regimen: no $0 deferments, and carrying debt for up to 30 years if they want forgiveness.
For many medical residents and early-career physicians, these changes to repayment may not immediately sound catastrophic – after all, RAP still allows for relatively low payments during training and prevents interest buildup. In fact, as an attending making a high six-figure salary, you’d likely prefer RAP’s 10% income cap over the old formula, meaning you’d pay slightly less per month at top income levels. The real drawback is the longer haul to forgiveness (30 years). For those not pursuing PSLF, it means essentially planning to pay the loans over most of their working life. And for those considering PSLF, the next change is far more alarming…
4. No More PSLF Credit for Residency/Fellowship: Perhaps the most contentious change for the medical community is a provision that “time spent in medical or dental internship/residency training will no longer count as qualifying employment for Public Service Loan Forgiveness” for new borrowers. In plainer terms, future residents won’t be able to count those years towards the 10-year PSLF requirement. Under current rules, a typical physician might have 3–7 years of payments during residency/fellowship (often very low payments on IDR) count toward PSLF, then need only ~3–7 more years as an attending in a nonprofit hospital to reach the 10-year mark. Now, those training years would be excluded – the PSLF “clock” would start only after you finish residency. A new doctor would have to work a full 10 additional years in qualifying non-profit employment after residency to get forgiveness. For someone who does a 5-year surgical residency and a 1-year fellowship, that’s 6 years of training + 10 years of attending = 16 years post-graduation to be rid of loans through PSLF.This change has provoked an outcry from medical associations. The American Medical Association blasted the idea, saying it “would make medical school unaffordable for a majority of students” and directly worsen the physician shortage by disincentivizing service in needy areas. Why would this have such impact? Consider that nearly 90% of indebted medical graduates who intend to pursue forgiveness have their eyes on PSLF – they fully expect those low-paid training years to count. If they know they’ll instead face a full decade of payments as an attending, the calculus of working in, say, a non-profit rural clinic versus taking a higher-paying private practice job might tilt. The AMA warns: “If time as a resident does not count toward loan forgiveness, fewer physicians will be incentivized to work for qualifying employers, which will diminish access to care in rural and underserved communities.” In other words, a primary care physician might think twice about joining a community health center (a nonprofit) if they know they still have 10 long years of loan payments ahead; some may opt for a lucrative suburban practice instead, even if it’s for-profit, just to tackle their debt faster.Lawmakers seem aware that this PSLF change is a hard pill to swallow – the House version of the bill included a concession: allowing medical residents to pause loan repayment interest-free for up to 4 years during training. Essentially, residents would be able to defer payments without interest accruing (a benefit somewhat moot under RAP since interest would be forgiven anyway, but it could save them the $10/month minimum). However, the Senate’s draft did not include this interest-free deferment, and it’s unclear if the final reconciled bill retained the House’s more forgiving stance. Even if it did, that only prevents balances from growing during residency; it does nothing to reduce the total number of payments needed for forgiveness. Current residents and students with existing loans will be grandfathered and still have their training count (the PSLF change applies to loans borrowed after mid-2026), but incoming classes will face a new reality.

Taken together, these provisions amount to an unprecedented student loan overhaul for future borrowers. Speaker Mike Johnson, celebrating House passage of the bill, hailed it as part of a conservative vision to rein in higher ed costs and “transform the sector.” Indeed, if fully enacted, the landscape by 2026 will be drastically different: Medical students may only be able to borrow (at most) about half to two-thirds of their total costs from the government, they’ll lose the unlimited safety net of Grad PLUS, they’ll have to navigate a single new repayment plan with a 30-year horizon, and they can no longer bank on a quick PSLF exit after residency.

The proponents of these changes argue that colleges and professional schools have been riding a gravy train of federal loan dollars – effectively tuition hikes enabled by easy credit. Cutting off the open spigot of Grad PLUS, they claim, will force schools to rein in tuition so that students can afford the education within those loan limits. “There should be some ratio between earning potential and what [education] costs,” said Senator Bill Cassidy (R-La.), a physician-lawmaker who championed the reform. In theory, if students can only pay $150K–$200K via loans, perhaps med schools will be pressured to lower their prices or provide more institutional aid.

But medical educators and economists are skeptical. AAMC data suggests that unlimited Grad PLUS wasn’t the driver of tuition inflation – in fact, the average growth rate of med school tuition slowed in the four years after Grad PLUS was introduced in 2006 (versus the prior four years), and in recent years tuition increases have actually been below inflation while other costs (housing, food) rose faster. The cost of training a physician is inherently high (expensive facilities, low faculty-student ratios, etc.), and most med schools operate on thin margins or subsidies. “I’m skeptical that capping loans will force medical schools to immediately lower tuition,” said Dr. Jason Goldman of the American College of Physicians. Over 21 years, med school tuition rose 81% (inflation-adjusted), and Goldman notes “the reality is it’s very expensive to train a physician… everything it takes to graduate is expensive.” Schools can’t magically slash those costs overnight. More likely, in the short term, students will just have to scramble for non-federal funding, and some may forgo or delay medical education as a result. Even Senator Roger Marshall (R-Kan.), who supported the caps, inadvertently illustrated the generational disconnect: “Anyone who is paying more than $100,000 to go to school is making a huge mistake,” he said – a statement that might have been true in the 1980s when he attended med school for about $4,700 tuition per year (≈$13,300 in today’s dollars), but rings hollow when today’s in-state tuition averages $40,000–$60,000 per year. What was once a “huge mistake” is now the norm, and students have little control over it.

Med Student Rebellion: “You’re Making It Harder to Become a Doctor!”

The reaction from medical students, academic leaders, and physician groups to these student loan provisions has been overwhelmingly negative. Dozens of physician organizations (AAMC, AMA, AACOM, specialty societies, and more) publicly opposed the changes. They penned letters to Congress and mobilized advocacy campaigns, arguing that the Big Beautiful Bill’s approach would “undermine the future physician workforce”, worsen doctor shortages, and put medical education out of reach for those without deep pockets.

Some of the loudest voices have been medical students and trainees themselves – the people whose futures are directly at stake. They’ve flooded social media and forums with personal stories about debt. They’ve shown up at campus meetings holding “Urgent Call to Action” flyers (like the Baylor students pictured above) to encourage their classmates to write Congress. “Every aspiring physician deserves a fair chance at a medical education – no matter their economic background,” emphasized AAMC President Dr. David Skorton in a joint statement with other academic leaders. “Eliminating or restricting these critical programs would ultimately make it harder for patients in communities nationwide to get the care they need.”

The American Medical Association didn’t mince words either. In a June 2025 letter, the AMA warned that if the House bill’s loan provisions become law as-is, it would “make medical school unaffordable for a majority of students—even those who might be the most highly qualified applicants.” This, they stress, comes “at a time when our nation needs more physicians, [so] Congress should be taking action to lessen the barriers for new physicians, not increasing the financial burden of their education.” The AMA’s Immediate Past President, Dr. Bruce Scott, noted that over 86,000 physician shortfall is projected by 2036, and that “the student-loan changes now under consideration in Congress could reduce the pipeline of future physicians” by deterring qualified people from pursuing medicine.

It’s not just rhetoric – there are concrete concerns behind these warnings:

Diversity and Accessibility: Medical schools have strived in recent years to diversify their classes – not just racially, but socioeconomically – to produce a physician workforce more representative of the population. If hefty loan caps and PSLF restrictions force lower-income students out, progress will reverse. “The cost of a medical education should never pose a barrier to a career in medicine,” the AMA has stated, calling for policies that ease the financial burden rather than increase it. They point to programs like the National Health Service Corps (NHSC), which offers scholarships and loan repayment in exchange for service in underserved areas, as the kind of positive incentive that should be expanded – not broad-brush cuts to loan access.
Specialty Choice and Primary Care: Even today, heavy debt steers many graduates away from primary care fields (family medicine, pediatrics, general internal medicine) toward higher-paying specialties. Programs like PSLF somewhat balanced that by providing an eventual escape hatch from the debt if one chose a lower-paid, service-oriented career. Remove that early-career forgiveness, and more physicians might chase the dollar – meaning fewer primary care doctors and fewer willing to work in rural or inner-city clinics, where salaries tend to be lower. “Denying PSLF eligibility to residents will harm patient care in those areas in greatest need,” the AMA wrote bluntly. They worry about a domino effect: fewer new doctors going into communities already underserved.
Brain Drain and Research: Medical academia and research could also feel a pinch. Many MD/PhD trainees or aspiring physician-scientists already take on extra years of training for relatively low pay; loan changes might push them into more lucrative private-sector roles instead of academic medicine or biomedical research. (The bill doesn’t directly address this, but loss of PSLF years and longer repayment could be discouraging for those who might otherwise endure years of low-paying research fellowships.)
Medical School Finances: Interestingly, universities themselves have concerns. Graduate tuition is a major revenue source, and if fewer students can attend because they can’t finance it, schools could see budget hits. Inside Higher Ed reported that eliminating Grad PLUS and capping loans could mean fewer enrollments, which “would be a hit to universities’ bottom lines”, especially those heavily reliant on graduate tuition. Wealthy private universities with large endowments might cope (some might expand their own loan-forgiveness or scholarship programs), but public and less-rich schools could struggle to fill classes or may have to cut costs (potentially impacting education quality).

While Republican lawmakers backing the bill insist these measures will curtail college costs and protect borrowers from excessive debt, consumer advocates and medical leaders see the opposite. They predict it will “exacerbate the student debt crisis and drive students to private loans” – hardly a solution from the borrower’s perspective. The discord was evident in Congress itself: not all lawmakers with medical backgrounds were on board. When POLITICO asked several physician-turned-congressmen about the bill’s impact on medical education, many declined to comment; those who did, like Senator Marshall, displayed a lack of sympathy about modern debt loads. Meanwhile, other members introduced alternative bills to address healthcare workforce needs without such punitive measures – for instance, a bipartisan proposal by Senators Roger Wicker (R-Miss.) and Jacky Rosen (D-Nev.) to offer loan repayment to specialists practicing in rural areas. The existence of those proposals implicitly acknowledges that the Big Beautiful Bill Act does nothing to directly solve physician shortages, and may in fact aggravate them.

So why include these higher-ed changes at all in a budget bill largely focused on tax cuts and spending reductions? Observers point to a political philosophy: many conservatives believe the federal student loan program itself fuels tuition hikes and personal debt, so they aim to shrink it. Cutting Grad PLUS and IDR generosity is a way to reduce federal spending on loan subsidies/forgiveness (though notably, the bill’s massive tax cuts will add an estimated $3.3 trillionto the national debt over 10 years, far dwarfing any savings from student loans). It’s also a statement of personal responsibility – a view that “making everyone pay something” and not giving too easy a path to forgiveness will instill fiscal discipline. However, critics call this approach misguided and harmful in the context of medical education. The cost of becoming a doctor isn’t a frivolous expense one can trim with budgeting; it’s a structural issue tied to how we train physicians and fund healthcare. “They’re treating medical education like it’s an expensive lunch you just shouldn’t buy, instead of a crucial investment in our health system,” says one fourth-year med student, commenting on social media.

Will It Worsen the Doctor Shortage?

Behind all the debate looms a larger concern for the public: America’s doctor shortage. Numerous studies have sounded alarm bells that the U.S. is on track to face a severe shortfall of physicians in coming years, especially in primary care and rural areas. The AAMC (Association of American Medical Colleges) projects a shortage of up to 86,000 physicians by 2036 if current trends continue. This includes tens of thousands fewer primary care doctors than needed, as well as shortages in certain specialties just as an aging population drives up demand. Already, patients in some regions struggle to find a primary care provider or face months-long waits to see specialists.

There are multiple drivers of this shortage:

A wave of physician retirements is looming (nearly half of U.S. physicians are over 55 years old, and many will retire within the next decade).
Population growth and aging – a 55% increase in Americans over age 75 by 2036 means far greater need for care of chronic and complex conditions.
Limited training capacity – Medicare, the chief funder of residency training slots, has capped support for resident physician positions for decades, resulting in bottlenecks where U.S. med school graduates – despite increasing in number – can’t all find residency positions in desired fields. (Congress only recently authorized funding for a modest 1,000 new residency slots spread over several years, barely denting the need.)

Given this situation, any policy that reduces the inflow of new doctors or steers them away from needed areas is cause for concern. Physician groups have been blunt: the Big Beautiful Bill Act’s loan provisions will likely make the doctor shortage worse. Let’s break down how:

Fewer Aspiring Doctors (Especially from Underserved Backgrounds): By raising the financial barriers to attend medical school, the law could shrink the applicant pool or deter accepted students from enrolling. Historically, tough finances have deterred some qualified individuals from medicine – for example, a decade ago, some medical school matriculants chose shorter/cheaper paths like physician assistant programs when faced with enormous debt for an MD. If only the wealthy or those willing to risk high-cost private loans can manage med school now, we may simply produce fewer doctors. The AMA has warned of “erecting new financial barriers” that could make many top applicants – who might have become excellent physicians – decide it’s not feasible. This especially affects those from rural or urban underserved communities who might have been more likely to return to practice in those communities. If they never become doctors, that potential service is lost.
Primary Care and Rural Practice Discouraged: The shortage is most acute in primary care fields and in rural areas. These are precisely the careers that often rely on programs like PSLF or NHSC loan repayment to be financially tenable. By not counting residency for PSLF, a new primary care doc at a nonprofit clinic has to wait a full 10 years (instead of, say, 3-5 years if residency had counted) to get free of their loans. That makes the PSLF benefit far less attractive. Some will conclude it’s not worth it – especially since under the new RAP plan they’ll already be paying a significant chunk of their income (up to 10%) during those 10 attending years. Many might find they’ve paid off a lot of their balance by then anyway, reducing the “forgiveness” amount. Essentially, the incentive value of PSLF drops, and with it, one of the draws for doctors to work at nonprofits, VA hospitals, academic centers, or rural clinics. “You’d essentially have to work an extra 3–7 years for the same benefit,” notes Nate Swanson of White Coat Hub, “so some may decide just to go private and try to pay it off faster on their own.” Rural areas and lower-income urban areas – which often depend on attracting mission-driven young doctors – could feel the impact if those physicians instead chase higher paying jobs in well-served locations.
Residency Bottleneck Not Addressed: One irony is that the bill does nothing to increase the number of residency training slots, which is the real choke point for producing more physicians. We could graduate more med students, but without more residency positions, they can’t become licensed doctors. Many experts argue that the solution to the physician shortage must include expanding Graduate Medical Education (GME) funding to train more residents. In fact, a bipartisan Resident Physician Shortage Reduction Act was introduced in 2025 to add 14,000 Medicare-supported residency positions over seven years. That bill, supported by the AAMC and AMA, directly targets the shortage by boosting capacity to train new doctors. In contrast, the Big Beautiful Bill Act, by focusing on loan cuts, might actually reduce the number of med school graduates (a step backward) while doing nothing about residency slots. Policymakers are essentially tightening the faucet on how many enter medical school without enlarging the pipe at the other end.
Geographic Maldistribution: By making medical education more dependent on personal wealth or credit, the bill may skew the demographics of who becomes a doctor. We could see even more physicians coming from affluent suburban/urban backgrounds (who can afford med school), and fewer from rural or disadvantaged backgrounds. This matters because doctors tend to serve populations similar to their background – e.g., those from rural areas are more likely to practice in rural areas. Losing those voices in medicine can exacerbate maldistribution of doctors. As one rural hospital advocate said, “The entire nation is dealing with a physician shortage, and rural communities…have been particularly affected. Congress can help provide a solution.” However, restricting loans is likely the opposite of the solution those communities need.
Delayed Career Transitions: Some analysts note an interesting possible side effect: If future doctors know they must make 10 years of payments as an attending for PSLF, they might opt for longer residency training (specialties with 5-7 year residencies, or doing extra fellowships) simply because those years wouldn’t count anyway – essentially “hiding out” in training (with interest-free deferment if that holds) and then doing 10 years after. This is speculative, but any distortion in training lengths or career entry could impact physician supply in the short run.

In sum, the consensus among healthcare experts is that the Big Beautiful Bill Act’s approach to student loans is at best a blunt instrument, and at worst a step backward in building the physician workforce America needs. It may achieve a political goal of curbing federal loan disbursements, but it risks trading one crisis (student debt) for an even deeper crisis (doctor shortages and reduced access to care).

As Dr. Skorton of AAMC put it, “Ultimately [these changes] would make it harder for patients… to get the care they need.” Access to a physician is not just an abstract policy issue – it’s about whether a sick child can find a pediatrician, or a diabetic grandmother in a small town can see an endocrinologist. If fewer physicians are trained, or if they cluster in wealthy areas to earn enough to pay off debt, those patients will bear the brunt.

What Needs to Change to Fix the Problem?

It’s easy to criticize a policy – the harder question is, what should be done instead? Few would deny that the status quo of skyrocketing med school costs and crushing student debt is unsustainable. Even before this bill, calls were growing for reforms to alleviate the burden on medical trainees and encourage more doctors in needed fields. With the Big Beautiful Bill Act poised to become law (President Trump’s signature is expected imminently), the medical and higher education community is looking at next steps. Here are some changes and solutions experts argue are needed to truly address medical student debt and physician shortages:

1. Invest in Funding Medical Education (Not Cut It): A common refrain is that public investment in medical education should increase, not decrease. Training doctors is expensive, but their services are a public good – especially in primary care and underserved areas. The AMA and AAMC advocate for boosting scholarships and grant programs that reduce the need for loans. For example, the National Health Service Corps (NHSC) offers scholarships that cover tuition for medical students who commit to working in a health shortage area after residency. Expanding programs like the NHSC could directly tackle both debt and shortages by essentially paying for med school for those willing to serve where they’re needed. Likewise, some states have begun offering free or reduced tuition at public medical schools if graduates commit to practicing in-state or in rural areas for a number of years. These targeted investments can yield new physicians in high-need fields without burdening them with debt.

Several top medical schools (NYU, Columbia, Kaiser Permanente’s new school, etc.) have even used philanthropy to implement tuition-free or debt-free initiatives for students. While not every institution can do this, it points to a model: the less debt students have to take on upfront, the more freedom they have in career choice. Instead of pulling federal loans, a better approach might be a national scholarship or grant program for medical students, perhaps in exchange for service. This could be funded through healthcare budgets or by redirecting some of the money saved (in theory) by these loan cuts.

2. Address the Cost Drivers in Medical Education: Why is medical school so expensive to begin with? Partly because of the intensive resources required (labs, simulations, low student-faculty ratios, hospital training costs) and partly because of limited state funding and reliance on tuition. Congress could explore incentivizing states to invest more in their medical schools or funding teaching hospitals to reduce the need to charge high tuition. For example, increased funding for academic hospitals or direct subsidies for medical school operations might allow schools to lower tuition without compromising quality. Another concept is imposing accountability on schools for student outcomes (the Big Beautiful Bill does include an “earnings accountability” rule tying program eligibility to graduates’ incomes). If applied sensibly, that could pressure schools not to enroll students who won’t be able to repay debt. However, most med graduates do earn enough eventually; the bigger issue is timing and distribution of those earnings.

3. Expand Residency Training Slots: This is critical. We need more residency positions so that we can train more physicians, especially in shortage specialties. Bills like the Resident Physician Shortage Reduction Act of 2025 (which would add 14,000 Medicare-funded slots) are a good start. Funding GME expansion will require federal investment, but it directly increases the supply of practicing doctors long-term. Many physician groups were dismayed that while Congress was revamping student loans supposedly to address workforce issues, they ignored the bottleneck of GME. Any serious solution to physician shortages must include lifting the residency cap and supporting hospitals in training more doctors. It is worth noting that training a resident also costs money (salaries, supervision, etc.), which is why Medicare support exists – but given the payback in terms of future care capacity, most experts deem it an essential investment.

4. Restore or Retain Incentives like PSLF (especially for training years): If the goal is to encourage doctors to go into public service, then maintaining PSLF for residency is important. The training years are when salaries are low and the financial pinch is felt; having those count toward forgiveness has been a huge incentive for people to stay in academia, research, or nonprofit medicine. Policymakers could reconsider this specific provision – even if loan caps remain, allowing PSLF to continue functioning as it has would cost relatively little (residents’ payments are small, so the “freebie” of counting them toward 10 years doesn’t forgive a ton of extra money, but it psychologically and practically helps). Some Senators might yet push an amendment to remove the PSLF residency exclusion, especially if evidence shows it would deter doctors from rural/underserved areas (which even some Republicans care deeply about). Keeping PSLF intact (or even expanding it) is a direct way to incentivize physicians to serve where they’re needed without the moral hazard of blanket debt cancellation – it’s earned through service.

5. Provide Relief from Interest and More Flexible Repayment: One positive in the new law is interest relief under RAP, but the 30-year term is harsh. Perhaps a compromise could shorten the forgiveness timeline to the current 25 years for grad loans – this would acknowledge that 30 years (almost an entire career from med school graduation to one’s late 50s) is too long to carry debt. Alternatively, some have proposed a tiered forgiveness (e.g., forgive half the remaining debt at 15 years, rest at 30) to give mid-career relief. Additionally, if PSLF is being narrowed, one could expand other programs like income-based repayment forgiveness to kick in sooner for those in lower-paying fields. Another idea floated: capping interest rates on federal loans for certain in-demand professions. Grad PLUS loans currently have high interest (over 7.5%); capping all med school loans at the 5% range, for instance, would lower total repayment amounts and make debt less scary, without forgiving principal outright. In fact, some argue the government should return to providing subsidized loans for med students or interest waivers during residency, to prevent debt growth. The House’s 4-year interest deferment for residents was along these lines – a concept many in the medical community would support (it’s effectively what SAVE/RAP now do by forgiving interest, so codifying that as a guarantee is helpful).

6. Enhance Loan Repayment Programs for Shortage Specialties/Areas: Beyond PSLF, targeted programs can draw doctors where they’re most needed. The bill that Senators Wicker and Rosen introduced (separate from OBBBA) to repay loans for specialists practicing in rural communities is a great example. Expanding federal or state loan repayment programs for primary care physicians, psychiatrists, OB/GYNs, and other shortage specialties in underserved areas could alleviate those shortages. These programs typically forgive or pay off a set amount of loans for each year of service in a high-need area. By making such programs more robust, Congress can directly reduce physicians’ debt andplace more doctors in communities that lack care. It’s essentially using a scalpel instead of a sledgehammer – incentivizing desired outcomes rather than indiscriminately capping resources.

7. Monitor and Adjust Tuition: If one of the goals of the Big Beautiful Bill Act was to pressure medical schools to lower tuition, policymakers should actively monitor how schools respond. If tuition does not decrease (or worse, continues climbing) and students are simply turning to riskier private loans, then the approach has failed. In that case, Congress might need to revisit with more direct measures. Those could include regulating tuition increases (for institutions receiving federal funds) or increasing transparency (requiring schools to report how they’re reducing costs). Some House Republicans had considered a “risk-sharing” proposal where colleges would pay a penalty if graduates didn’t repay loans – that was dropped from the final bill, but it indicates appetite for holding schools accountable. Perhaps for medical schools, tying federal research funding or other support to keeping tuition in check could be explored. However, any such measures must be careful not to undermine school finances that support teaching and hospitals.

8. Support Financial Literacy and Advising: On an individual level, helping students make smart financial choices is key. Med schools should ramp up financial aid counseling under the new system: e.g., guiding students on budgeting within the loan caps, finding scholarship opportunities, or considering the service commitment programs available. Residency programs too might need to counsel new physicians on navigating RAP vs refinancing vs PSLF under the new rules. The AAMC and AMA might step up efforts to educate trainees – something they already do, but which becomes crucial as rules shift. Well-informed borrowers can avoid some pitfalls (like excessive private loans) if they plan early.

In essence, fixing the doctor shortage and the medical student debt crisis requires a multi-pronged, investment-focused approach. The Big Beautiful Bill Act took a very different tack – one of disinvestment and constraint. It may reduce federal loan outlays in the short term, but at what cost? If fewer doctors are trained or more drop out due to financial strain, that’s a loss for society far greater than the dollars saved. Policymakers will need to reconcile the tension between fiscal goals and healthcare needs. As the dust settles, perhaps some amendments or follow-up legislation can blunt the negative impacts (for example, a technical corrections bill that restores PSLF for residents, or separate funding bills to expand scholarships).

Conclusion: A Crossroads for Medical Education

The passage of the One Big Beautiful Bill Act marks a turning point for how America finances higher education – and nowhere is the impact more acute than in medicine. In the coming years, we will see whether the bold predictions of the bill’s architects come true (will medical schools slash tuition? will students miraculously need less debt?) or whether the warnings of critics are borne out (fewer doctors from less privileged backgrounds, more unfilled residency slots, patients waiting longer for care).

One thing is certain: medical students and those who dream of becoming doctors are now facing more uncertainty and financial risk than at any time in recent memory. A profession that already demanded years of sacrifice now may demand even greater economic sacrifice or family backing. The current cohort of pre-meds and medical students is watching anxiously. “I’ve wanted to be a doctor since I was a kid,” one student wrote in a letter to Congress, “but I also want to have a family and not be in debt until I’m 60. Please don’t close the door on people like me.”

The door isn’t closed, but it just got harder to push open. Those who do make it through will carry a heavier load. As these changes roll out, all eyes will be on metrics like medical school application rates, diversity of classes, and residency fill rates in the coming years. Any downturn will prompt a rethink.

For now, medical students and organizations are gearing up to adapt and advocate. They’re urging incoming students to “go in with eyes open” – to plan finances carefully under the new rules, seek out scholarships, and consider the implications of loan choices on their careers. They’re also lobbying lawmakers, hoping that by highlighting the potential harm to healthcare access, they can convince Congress to revise some of the most damaging provisions. The fight isn’t over – if anything, it’s entering a new phase of implementation and possible adjustment.

Ultimately, the nation must decide how much it values the next generation of healers. Will we make becoming a doctor an attainable goal for the bright student with humble origins and a passion for service? Or will we inadvertently make the white coat a privilege reserved mainly for the wealthy? The Big Beautiful Bill Act has sketched one vision of that future – a harsher, leaner vision. It will be up to future lawmakers, medical leaders, and society to shape a better one, where the best and brightest can don the white coat without mortgaging their future, and where patients in every community can find the doctors they need. The stakes – for medical students and for America’s health – could not be higher.