One Big Beautiful Bill Act: What Med Students Need to Know About New Student Loan Changes

Background: A New Law Targeting Med Students' Student Loans

In May 2025, the U.S. House of Representatives passed H.R. 1, humorously nicknamed the “One Big Beautiful Bill Act.” This sweeping legislation covers many budget and policy areas, including major changes to student loans. The bill aims to overhaul how students borrow and repay federal loans, effectively undoing some of the recent Biden-era student loan policies. Medical students – who often graduate with six-figure debt – have a lot at stake in this debate. The bill’s provisions could reshape everything from how much you can borrow for med school to what your monthly payments look like in residency and beyond.

As of now, H.R. 1 has only passed the House and would need Senate approval (and presidential sign-off) to become law. It’s not a done deal yet, but it’s important to understand what’s on the table. Let’s break down how the “One Big Beautiful Bill Act” might affect medical students’ federal student loans, with a brief nod to private loans. We’ll explore what happens if it passes as-is, if it’s modified, or if it never becomes law, and give you some tips to navigate each scenario.

Federal Student Loans Today vs. Under H.R. 1

Today’s system (2024-25): Medical students typically finance school with federal Direct Unsubsidized (“Stafford”) loans and Direct Grad PLUS loans. There’s technically no cap on Grad PLUS – you can borrow up to the full cost of attendance (tuition + living) each year, which often means $200,000+ over four years of med school. In repayment, most new doctors use income-driven repayment (IDR) plans like the new SAVE plan (Saving on a Valuable Education). The SAVE plan (a Biden administration update to IDR) lets you make low payments based on income, forgives any remaining balance after 20–25 years, and doesn’t let interest pile up if your payment doesn’t cover it. (Under SAVE, payments are $0 for many low-income borrowers, and unpaid interest is forgiven each month.) Programs like Public Service Loan Forgiveness (PSLF) can erase federal loans after 10 years of nonprofit or government work – and yes, residency/fellowship years at a nonprofit hospital count toward those 10 years under current rules.

Under H.R. 1: Starting in July 2026, the federal loan landscape would change dramatically for new borrowers. Key changes include:

• No more subsidized loans for undergrads, and no more Grad PLUS loans for grads/professionals. The bill ends the Grad PLUS program entirely for any grad/pro student after July 1, 2026. For undergrads, it also eliminates subsidized Stafford loans (which currently don’t accrue interest in school). In other words, all federal loans would be unsubsidized, and grad students would lose the “credit card with no limit” that PLUS loans represented.

• Tighter borrowing limits for federal loans. Instead of PLUS loans covering whatever your school charges, H.R. 1 imposes new caps on how much you can borrow:

  1. Annual limit: You could borrow up to the median cost of your program each year in unsubsidized loans. For med students, that means if your med school’s annual cost of attendance is above the national median, federal loans might not fully cover it.

  2. Aggregate limit: There’s a new overall cap on total grad/professional unsubsidized loans – roughly $150,000 for a professional student (like an MD or DO). (This is in addition to a $50,000 cap for undergrad borrowing. So if you borrowed $50k for undergrad, you could get up to $150k more for med school, totaling ~$200k.) $150k is a lot – but many med students currently borrow well above this. For perspective, the average med school debt for recent grads is around $200k+, and at private schools total costs can approach $300k. Under the bill, any funding above the federal cap would have to come from elsewhere (savings, family, scholarships, or private loans).

• New repayment options (and an end to current IDR plans). The bill would repeal the existing income-driven plans like SAVE, PAYE, and ICR for new borrowers, and replace them with only two choices for loans disbursed after July 1, 2026:

  1. A Standard Repayment Plan (but with a twist – more on this below).

  2. A single income-based plan called the Repayment Assistance Plan (RAP).

• In short, current IDR plans would be phased out. Borrowers who already have loans before 2026 could potentially stay on existing plans for those older loans, but going forward, new med school loans would use either the standard 10–25 year payment or the new RAP. The SAVE plan’s more generous terms would not be offered to new borrowers if H.R. 1 becomes law.

We’ll dive deeper into the borrowing limits and the new repayment system below, and then discuss scenarios (pass, amend, fail). First, let’s unpack what these changes really mean for a med student’s financial journey.

Borrowing Limits and Loan Types: Goodbye Grad PLUS?

One of the biggest shifts would be how much you can borrow in federal loans for medical school. Currently, Direct Grad PLUS loans fill the gap when Stafford loans aren’t enough – they’ve been a safety valve, albeit with higher interest. H.R. 1 would shut off that valve:

• Grad PLUS eliminated: The bill outright terminates new Grad PLUS loans to grad/professional students after July 1, 2026. This means med students entering school in Fall 2026 or later would not be able to take Grad PLUS loans for those years. Parent PLUS loans for undergrads would also be restricted (parents could only borrow PLUS up to the cost of attendance after the student maxes out unsubsidized loans).

• Higher unsubsidized loan caps: To compensate (somewhat), the bill raises the limits on unsubsidized Stafford loans. Right now, grad students can only get ~$20,500 per year in unsubsidized Stafford (med students have a slightly higher annual cap, around $42k, and a total cap of $138,500 for Stafford). Under H.R. 1, those limits would change:

  • Annual Unsub limit: You could borrow up to the median annual cost of your program in unsubsidized loans. For example, if the median cost of attendance for U.S. med schools is (say) $60,000/year, that might be the annual unsub cap for med students. Some schools cost more than that (especially once living expenses are added), so this could still leave a gap.

  • Aggregate Unsub cap: The total you can borrow in unsubsidized loans for grad/pro school would be capped. The formula is a bit complex, but for a medical student it boils down to $150,000 (assuming you had no prior grad loans). If you also had undergrad loans, you have an additional $50,000 cap for those. Practically, a med student who borrowed max for undergrad could end up with ~$200k total federal loan limit (50k undergrad + 150k med). But many med students might hit that $150k grad cap before finishing their program, especially at higher-cost institutions.

Bottom line: Future med students might not be able to rely on federal loans for the entire cost of attendance if it exceeds the median or the $150k aggregate cap. Private loans could come into play more (we’ll discuss those in a later section), which raises concerns since private loans lack the flexible repayment and forgiveness options of federal loans.

For current med students or those matriculating before the cutoff, there is some relief: H.R. 1 includes transition rules. If you’re already enrolled and have taken out federal loans by June 30, 2026, you can continue borrowing under the old rules for the remainder of your expected program time (up to 3 more years). This means a first-year med student in 2025 would likely be able to finish their degree with Grad PLUS loans as needed. But anyone starting in mid-2026 or later would be under the new regime.

How it affects a med student’s budget: Let’s say your med school costs $80,000 per year (tuition, fees, living). Under current rules, you might borrow $42k Stafford + ~$38k Grad PLUS annually to cover that. Under H.R. 1, if the median cost is $60k, you’d get $60k in unsubsidized loans, and then you’re short $20k that federal loans won’t cover. Over four years, you might hit the $150k aggregate cap by midway through third year. You’d need to find other funding for the remainder, which could be private loans or other sources. This requires more planning and possibly securing a co-signer or good credit for private loans – something that hasn’t been a concern with Grad PLUS (which never required good credit beyond no adverse history).

In summary, the bill reins in federal lending, likely to prevent over-borrowing and contain costs. But for medical students facing high tuition, it could mean juggling additional financing sources. It also means interest savings on subsidized loans would disappear (though med students haven’t had subsidized loans since grad subsidies were eliminated in 2012). The loss of Grad PLUS is the biggie – that’s why understanding private loan implications will be important (more on that later).

Repayment Plans Overhaul: From SAVE to RAP

Perhaps even more consequential for med students is how you’ll repay loans after graduation. H.R. 1 would drastically change income-driven repayment. It does two main things:

1. Ends the current IDR plans (like SAVE, PAYE, REPAYE) for new borrowers.

2. Introduces a new Income-Based plan called the Repayment Assistance Plan (RAP), alongside a revamped “standard” plan.

   
   

Let’s break down the differences between the current SAVE plan (as representative of Biden-era IDR) and the proposed RAP plan, since many med students use IDR during training and early career.

The SAVE Plan (Current IDR) – a refresher

• Income threshold: SAVE doesn’t count income up to 225% of the federal poverty level. For a single person, that’s about $32,800 (using 2024 poverty figures); for a family of four, around $67,500. Income above that is considered “discretionary” for calculating payments.

• Payment percentage: SAVE requires 10% of discretionary income for graduate-school loans (and 5% for undergraduate loans). If you have both undergrad and grad loans, it’s a weighted average (most med students only have grad loans, so effectively 10% of discretionary income). Example: A resident earning $60,000 with no dependents has discretionary income of roughly $60k – $32.8k ≈ $27.2k. 10% of that is ~$2,720 per year, or about $227/month. Many residents, however, earn less or have dependents, so their payments could be much lower – even $0 in some cases – under SAVE.

• Interest accumulation: SAVE includes an interest subsidy that prevents unpaid interest from accruing. If your calculated payment doesn’t cover all the interest due that month, the leftover interest is forgiven – so your balance won’t grow provided you make your payments. This is huge for residents whose low payments wouldn’t normally cover interest on a big loan – it keeps the loan balance from ballooning.

• Forgiveness timeline: Under current IDR rules (including SAVE), any remaining balance is forgiven after 20 years (undergraduate loans) or 25 years (graduate loans) of repayment. So for med school loans, you’re looking at 25 years on an IDR plan for forgiveness (unless you go for PSLF which is 10 years). There was also a new SAVE feature that would forgive smaller original balances more quickly (e.g. loans ≤$12k forgiven after 10 years), but virtually all med students exceed that threshold, so 25 years is the relevant timeline.

• PSLF considerations: Under SAVE/other IDRs, if you work in a nonprofit or public sector (including most residency programs), you can pursue Public Service Loan Forgiveness, which forgives the remaining balance after 120 qualifying payments (10 years). All IDR payments count toward PSLF. Notably, time in residency or fellowship does count as long as you’re employed by a qualifying employer (e.g. a nonprofit hospital or government facility).

In short, SAVE dramatically lowered payments for most borrowers (especially those with lower incomes relative to debt) and stopped interest growth. This plan (fully implemented in 2024) was considered very borrower-friendly – indeed, millions of borrowers enrolled, including many med students consolidating and switching to SAVE for its benefits.

Now, H.R. 1 wants to replace this with RAP for new loans. So, what does RAP look like?

The Proposed RAP Plan – key features

• No $0 payments – minimum contribution: Under RAP, every borrower must pay at least $10 per month. There’s no $0 payment tier, regardless of how low your income is. (By comparison, under SAVE a borrower with very low income might have $0 payments because of the 225% poverty exemption. Under RAP, even someone with no income would pay $10/month once in repayment.)

• Adjusted income formula: Instead of the discretionary income formula, RAP uses a progressive percentage of your total income, with a deduction for dependents:

  • If your income is very low (≤$10,000), RAP sets a base payment of $120/year (which becomes $10/month).

  • From $10k up to $100k, RAP applies a sliding scale. For example:

    • ~$10k–$20k income: 1% of your income.

    • $20k–$30k: 2% of income.

    • $30k–$40k: 3% of income.

    • ...and so on, increasing by 1% for each $10k band...

    • $90k–$100k: 9% of income.

    • Above $100k: 10% of income.

• There’s also a dependent deduction: subtract $50/month for each child dependent before calculating the payment. (Spousal income is included if you file taxes jointly, but if you’re married filing separately, they exclude your spouse’s income – similar to current IDR rules.)Example: You’re a single resident making $60,000. Under RAP, your base percentage is 5% (because $50k–$60k income = 5% bracket). So annual payment = 5% of $60k = $3,000, i.e. $250/month. If you have one child, you’d subtract $50, making it $200/month. Comparison: Under SAVE, that same resident ($60k, single) was paying ~$227/month by our earlier calc. So in this case RAP is somewhat in the same ballpark (slightly higher for single, slightly lower if you have a dependent). But for lower incomes, RAP might actually charge more than SAVE – e.g. a $30k income single pays ~$75/mo under RAP (3% of $30k) whereas under SAVE they might pay ~$0–$20 (since much of that income is under 225% poverty). On the other hand, higher incomes will find RAP can be cheaper than old IDR – it caps out at 10% of total income, whereas SAVE was effectively 10% of discretionary (which is a bit more than 10% of total if you have a high income).

• Interest and principal incentives: The RAP plan borrows a page from SAVE when it comes to interest:

  • Interest won’t snowball: If your monthly payment isn’t enough to cover all the interest, the remaining interest is forgiven (not charged to you) for that month. This is very similar to SAVE’s interest benefit – your loan balance won’t grow due to unpaid interest as long as you make the required payment.

  • Guaranteed progress on principal: RAP adds a new twist: if your payment is so low that you’re barely chipping away at the principal, the government will match a portion of your payment toward principal. Specifically, if your payment would reduce your principal by less than $50 in a month, they will credit you up to $50 toward principal reduction. In essence, each month you will knock off at least $50 from your balance (even if your income-based payment alone wouldn’t have). This feature ensures that every borrower is reducing their debt over time – no perpetual stagnation.

• Example: Suppose you owe $200,000 at 7% interest. That’s about $1,167 in interest per month. If you’re in training on RAP and your calculated payment is only $100/month, normally interest would far exceed that and you’d never touch principal. Under RAP, that $100 pays interest first, $1,067 interest is unpaid and gets forgiven, and you paid $0 toward principal. Now the plan says: since you paid on time, they will still reduce your principal by up to $50. So effectively, even though you only paid $100 (which went to interest), your balance drops by $50 that month. Your balance won’t go up, and it will actually tick down slowly until your income grows. This is better for the borrower than older plans where balances could grow or stay level in negative amortization.

• Forgiveness timeline: RAP requires making 360 payments (30 years) for forgiveness of any remaining balance. This is a longer timeline than the current 20–25 years on SAVE for grad loans. Essentially, all new loans would have a 30-year IDR forgiveness clock under RAP (there’s no shorter term for undergrad vs grad – it’s one size fits all). After 30 years of qualifying payments, any leftover balance is cancelled, just like current IDR plans cancel at 20/25 years. The definition of “qualifying payments” is also stricter in one sense: only payments made under RAP or payments that are at least as large as the 10-year standard amount count toward that 360 tally. (This means if someone somehow made extremely low payments under another plan, those wouldn’t count unless they were at least equal to a 10-year plan payment – but this mainly affects weird scenarios, since new borrowers won’t have other plans available.)

• Switching plans: The bill would default new borrowers into the Standard plan unless they opt for RAP. You can switch from Standard to RAP at any time. However, once you’re on RAP, you generally can’t switch back to Standard unless you take out a new loan (the idea is to prevent jumping in and out to game the system).

That’s a lot of detail. The key takeaways for a med student are:

• Payments under RAP might be higher when you have very low income (because of the $10 minimum and only a small deduction for dependents), but could be lower once your income rises compared to what PAYE/SAVE would have demanded. It’s a more gradual ramp-up. Many residents/fellows could see similar monthly amounts in RAP vs SAVE, on the order of a few hundred dollars, but attending physicians with high salaries would actually pay less of their income under RAP (capped at 10% of total income) vs SAVE (which would effectively take 10% of income above $32k, which is slightly more than 10% of total for high earners). This means a high-earning specialist might not reach forgiveness at all because they’ll pay off the loan faster – which is arguably what the authors intend (borrowers who can afford to will fully repay).

• No interest growth is a common feature – both SAVE and RAP spare you from accruing interest if you’re in good standing. RAP even guarantees some principal reduction, which could help keep very long-term borrowers on track to finish by 30 years.

• Longer forgiveness horizon (30 years) – that’s a big drawback if you were counting on 25-year or 20-year forgiveness. Med school debt would now firmly be a 30-year game unless you pay it off sooner. However, many physicians in higher-income fields might not need forgiveness by 30 years because they’ll have cleared the balance earlier given the payment requirements.

• PSLF and residency: Here’s a critical difference. The bill sneaks in a change to Public Service Loan Forgivenessthat specifically affects doctors in training. It would no longer count medical or dental internship/residency as qualifying “public service” for PSLF for new borrowers (those who hadn’t taken loans by mid-2025). In plain English: if you start med school after this law passes and eventually enter repayment, your residency years would not count toward PSLF forgiveness anymore. You’d still be able to get PSLF as a doctor by working for non-profit hospitals, but your 3–7 years of residency/fellowship wouldn’t count toward the 10-year requirement. You’d essentially have to work an additional 10 years as an attending in qualifying employment to get PSLF. This is a stark change from now, where many physicians finish training with, say, 4 years of credit and need just 6 more years in a nonprofit to forgive the rest. Under the proposal, new doctors would start their PSLF clock afterresidency. (This wouldn’t affect anyone who already has federal loans prior to mid-2025 – they’d be grandfathered in and could still count their training years.)

Given all these nuances, let’s summarize the SAVE vs. RAP differences in a comparison table, focusing on what matters to med students:

Comparison of Current SAVE Plan vs. Proposed RAP Plan (for Graduate/Med School Loans)

Feature	SAVE Plan (Current)	RAP Plan (Proposed)
Eligibility	Available for all federal Direct loans (REPAYE/SAVE open to new borrowers)	Only available for loans disbursed on/after July 1, 2026 (new borrowers)
Income Protected	225% of poverty level (big allowance for living expenses)	No explicit poverty exemption; instead uses low percentage for low incomes (1% of income at $10–20k, etc.) and minimum $10 payment
Monthly Payment Calculation	10% of discretionary income (income minus 225% poverty). Effectively ~5–10% of total income, depending on income and family size. Payments can be $0 if income is very low.	Progressive % of total income (1% up to 10% as income rises), minus $50 per child dependent. Effectively 10% of gross income at upper end. $10 minimum monthly payment always.
Example: $60k income, single	Discretionary = $27k; 10% of that = $227/month.	Falls in 5% bracket; 5% of $60k = $250/month. (No poverty deduction, just straight %)
Example: $60k, married w/2 kids (spouse no income)	Discretionary = $60k – $55k = $5k; 10% = $42/month (because larger poverty threshold for family of 4).	5% of $60k = $250; minus $50×2 kids = $150; $150/month. (Spouse’s lack of income doesn’t reduce AGI, since AGI is $60k either way; filing separately could exclude spouse income if they had any.)
Interest Accrual	No interest accrual on unpaid interest – government forgives any monthly interest your payment doesn’t cover. Loan balance won’t grow.	No interest accrual on unpaid interest – same approach: unpaid interest is forgiven each month. Balance won’t grow.
Extra Principal Reduction	None explicitly (balance just stays the same if payment < interest)	Yes: If your payment is very low, government ensures at least $50 goes to principal each month by covering the difference. Helps gradually chip away at balance.
Repayment Term for Forgiveness	25 years for grad loans (20 if you somehow only had undergrad loans). After that, any remaining balance forgiven.	30 years (360 payments) for all borrowers. After that, remaining balance forgiven.
PSLF (Public Service Loan Forgiveness)	Counts qualifying employment (nonprofit/government) during repayment. Residency and fellowship at a nonprofit hospital count toward the 10 years.	Also counts qualifying employment, but H.R.1 would exclude medical residency/fellowship from counting for new borrowers. (Would need 10 years post-residency to get PSLF forgiveness.)

Table notes: Both plans require you to recertify income annually. Under SAVE (current law), if married filing separately, your payment is based only on your income (spouse’s income excluded); under RAP, the language suggests a similar treatment (spouse’s income counted only if joint return).

As you can see, RAP is less generous in some ways (30-year term, no true $0 payments, smaller family deductions), but it still retains many borrower protections (interest forgiveness, eventual loan forgiveness, and even the new principal subsidy). The aim appears to be to ensure everyone “contributes something” and eventually pays off their loans if they can, while avoiding runaway balances.

For medical students, one worry is the longer horizon for forgiveness – 30 years is basically an entire career of carrying student debt, unless you aggressively pay it off sooner or qualify for PSLF. Many physicians might pay off in 15–20 years anyway once attending salaries kick in, but those in lower-paying specialties or with intermittent work breaks might have counted on the 25-year mark; under RAP they’d wait an extra 5 years (and remember, that’s if PSLF isn’t an option or is used).

Another significant change is PSLF not counting residency for future cohorts – that could influence career decisions (e.g., pushing new doctors toward private practice or higher-paying jobs since the PSLF incentive for academic/VA/community health jobs is weakened). It’s essentially closing what some see as a “loophole” where highly indebted medical trainees get credit toward forgiveness during training years when their incomes are low and payments minimal – but for students, that “loophole” was a lifeline and a big part of financial planning.

Standard Repayment Changes: Longer Terms for Big Balances

What about the “Standard” repayment option mentioned earlier? Currently, the standard plan for federal loans is a fixed monthly payment over 10 years (for consolidation loans or very high debt, extended plans up to 25-30 years are available, but not the default). H.R. 1 reimagines the Standard plan for new loans on a sliding scale based on your loan balance:

Under the bill’s standard plan for post-2026 loans, your repayment term would automatically adjust to your total loan principal at the time you enter repayment:

• If you owe <$25,000 total: 10-year repayment term (as today).

• If $25k to <$50k: 15-year term.

• If $50k to <$100k: 20-year term.

• If $100k or more: 25-year term.

This means for most med school graduates (who typically owe >$100k), the “standard” plan would actually be a 25-year fixed payment schedule instead of the 10-year plan we think of today. The idea is to prevent monthly payments from being untenably high by stretching them out. Under current rules, big borrowers have to actively opt in to extended or graduated plans, but the default is still 10 years (which no one with $200k debt can realistically afford early on). Post-2026, if you take no action, you’d automatically be given a 25-year plan if you owe $100k+. You could still choose RAP instead at the start, but if you don’t choose, they’ll lengthen your term by default.

How would this 25-year standard look? If you owed $200,000 at ~7% interest, a 25-year fixed payment is roughly $1,400/month (versus ~$2,300/month on a 10-year plan). Much more manageable for a new attending, though still high for a resident (who likely wouldn’t choose this plan anyway). With the 25-year term, you’d fully pay off the loan by the end (no forgiveness needed, because it’s like a mortgage schedule).

Importantly, this standard plan has no forgiveness at the end – it’s a fixed term. If you want forgiveness, you’d opt for RAP. The bill essentially sets up a scenario for new med grads: either commit to paying off your loans in full over 25 years (if you can afford to do so), or use RAP for a potentially reduced payment that could extend to 30 years with some forgiveness at the end.

For someone who ends up in a high-paying specialty, the 25-year fixed plan might be attractive to avoid accruing more interest over 30 years. For someone in primary care or working part-time, RAP’s income-based approach might be safer. You could start on the standard plan and switch to RAP if needed (you’re allowed to switch from standard to RAP anytime). But once on RAP, you generally can’t revert to standard unless you incur new loans, as mentioned.

In summary, the “standard” plan isn’t so standard anymore – it’s tailored to debt size. For med students with large debt, it effectively becomes a 25-year plan by default. That’s actually a recognition of reality (most borrowers with huge debts aren’t paying them in 10 years without PSLF). But it does lock in a longer commitment if you go that route.

The Private Loan Angle

With federal loan caps and stricter terms, you might wonder: Will private student loans become more common for med students? Possibly. Here’s how private loans fit into this picture:

• Filling the gap: If federal loans won’t cover the full cost of med school because of the new caps (e.g., you hit the $150k limit but still need funds for M4 year), a private student loan could be the stopgap. Private loans can typically cover up to the cost of attendance as well, and some lenders specifically target medical/dental students with products that defer payments during training.

• Interest rates: Currently, Grad PLUS loans have relatively high fixed interest rates (often around 7%+). Private loans for creditworthy borrowers (especially with a co-signer) might offer competitive or lower rates, sometimes variable. If a med student or their family has excellent credit, they might secure a rate that’s a bit lower than PLUS. However, private rates can vary widely, and in a high interest environment they may not be much better. Plus, not everyone has a willing co-signer or strong credit history.

• No forgiveness or income-based safety net: The biggest drawback of private loans is that they don’t come with income-driven repayment, forgiveness options, or PSLF eligibility. You have to repay them in full, typically on a fixed schedule (though some lenders allow limited forbearance or extended plans, nothing as generous as federal IDR). For a med student, taking say $50k in private loans means once repayment starts, those might have a 5-15 year term with a relatively high fixed payment – regardless of whether you’re a resident or attending. There’s no scaling to your income. This lack of flexibility is why many students have stuck to federal loans despite higher interest, because the federal system’s protections (like PAYE/SAVE and PSLF) were invaluable.

• Refinancing trade-offs: Some physicians, once they have a solid income and no need for PSLF, refinance their federal loans into private loans to get a lower interest rate. If RAP becomes the only IDR and PSLF is harder to get (due to the residency exclusion), more doctors might consider refinancing after training. However, refinancing federal loans into private is generally advisable only if you’re confident you won’t need those federal benefits. Under H.R. 1, new borrowers won’t have as many federal perks (PSLF is less attainable, IDR is still there but forgiveness is 30 years out). A high-earning attending might decide to refinance to get, say, a 4-5% rate instead of sticking with the federal 7% rate and a 30-year horizon. On the other hand, the RAP plan does offer interest forgiveness and a safety net if income drops – private loans won’t forgive interest or principal at all.

• Could private loans become more attractive? Possibly, yes. If you know you’ll have to pay your loans in full anyway (e.g., you’re planning to go into private practice, so PSLF isn’t in your plan, and you don’t expect to stretch payments for 30 years), then getting a lower interest rate is smart. Some med students might strategically take a private loan for any amount above the $150k federal cap, or even consider using private loans instead of Grad PLUS if the terms are better. Caution: you’re swapping flexibility for possibly lower cost. It becomes a personal calculation: do you value the option of IDR and forgiveness more, or a lower interest/shorter term more?

In any case, if H.R. 1 passes and you’re a prospective med student, you’ll want to research private loan options early, perhaps get a co-signer lined up, and compare lenders. Always maximize the federal unsubsidized loans first (they still usually have fixed lower interest than PLUS and no credit requirement), then consider private for the remainder if needed. And remember, private loans often require payments to start right after graduation (though some offer residency deferment).

In short, private loans might go from a last-resort to a necessary piece of the puzzle for some students if federal aid is curtailed. Just go in with eyes open about the lack of forgiveness and need to repay them no matter what.

Three Scenarios: Pass, Modify, or Fail

Because this legislation is not final, let’s consider three possible outcomes and what each would mean:

1. If H.R. 1 Passes the Senate Unchanged (Becomes Law)

If the bill sails through the Senate as written (and assuming it’s signed into law), the changes we’ve outlined will happen on the timelines specified. For medical students, that means:

• Borrowing limits kick in for the 2026-27 school year. No new Grad PLUS loans beyond June 2026. You’d need to plan your med school financing to stay within the federal unsubsidized caps (median cost per year and ~$150k total) or arrange alternative funding for any shortfall.

• Current students would be grandfathered under transition rules to finish their program with current loan options (up to 3 years grace). If you’re graduating by 2028-29, you might avoid the brunt of the borrowing limit issue. But if you’re starting in 2026 or later, you’re fully under new rules.

• New repayment system from July 2026 onward: All your loans disbursed after that date fall under the new Standard vs. RAP framework. No enrolling in SAVE or PAYE – those won’t be options for those loans. If you have older loans from undergrad or earlier, you might have them on old plans, but any new med school debt will use RAP or the 25-year fixed plan.

• Prepare for RAP or 25-year fixed payments: As a resident or fellow in, say, 2030, you would likely be on RAP making at least $10/month, probably a few hundred a month depending on your stipend. Interest won’t grow, which is good. When you become an attending, you’ll either continue on RAP (capped at 10% of income) or you might aggressively pay down your loans faster (since the system somewhat expects higher earners to do so). Financially, you might actually have less to forgive after 30 years than you would have after 25 under SAVE, because RAP will have forced more principal reduction along the way (via the $50 rule and higher contributions once you earn more).

• PSLF strategy changes: If you’re a new med student under this law and you dream of loan forgiveness, PSLF is still technically available but much less of a sure thing. You’d finish training with $150k (or more, with private loans) in debt, then you’d have to work 10 full years in nonprofit healthcare after training to wipe any remainder. Many physicians in that scenario will actually pay off a large chunk of their debt in those 10 attending years anyway (especially since RAP requires up to 10% of income). So PSLF might not provide as huge a benefit by the time you get there – or you might decide it’s not worth being locked into nonprofit jobs for a decade solely for PSLF, and instead focus on paying the loans off sooner. Tip: If PSLF is still your goal, you’d want to consolidate and start making qualifying payments as early as possible and perhaps consider longer residency programs as just “time not counted.” But you’d really evaluate if PSLF is achievable or if you should plan to handle the debt without it.

• Higher education plans: Some students might try to front-load borrowing before the cutoff. For example, if you were planning a gap year or a dual degree, you might consider starting med school earlier to lock in current loan rules. Current MS1s (in 2025) may breathe a sigh of relief that they got in under the wire. We could see a surge of borrowing in 2025-26 as people try to use PLUS while it’s available. However, that’s a narrow window and not everyone has that flexibility.

• Financial counseling becomes crucial: Med schools and loan servicers will need to guide students through the new system. Expect your financial aid office to update their budgeting advice: e.g., “Please be aware of the $150k federal loan cap – plan accordingly for years 3-4” and “Private loans vs. RAP: what to consider.” Residents will need to know about the $10 minimum and why their payment isn’t $0 even if their income is low. This scenario is a big adjustment period around 2026-2027 as everyone shifts to the new normal.

In essence, if H.R. 1 becomes law unaltered, medical students will face more restrictive federal loan availability but will still have a safety net in loan repayment (via RAP) – just a longer road. Borrowing may become a bit more expensive/complicated (needing private loans), and repaying might become more structured (everyone paying at least something for 30 years unless they clear the debt sooner). Future doctors would carry loans longer on average.

2. If the Bill Passes with Amendments (Changes Likely)

It’s quite possible the Senate will not agree to everything in H.R. 1 exactly as written. In negotiations, some provisions could be softened or removed. For instance, lawmakers might compromise by adjusting the student loan section to be less drastic. What could that look like?

• The Senate might raise or remove the loan caps if they hear from graduate/professional schools about funding shortfalls. For example, they could keep Grad PLUS but impose some limits, rather than eliminate it. Or they might set the aggregate cap higher than $150k for professional degrees, acknowledging that med and dental education costs more. An amendment could say, for instance, “Okay, we’ll limit Grad PLUS to, say, $100k per year or $200k total” instead of zero. (This is speculative, but caps could be negotiable.)

• They could modify the Repayment Assistance Plan. Perhaps they’d keep the framework but tweak the numbers – e.g., protect a bit more income (say 175% of poverty instead of none) or shorten the forgiveness to 25 years to align with current grad IDR forgiveness. They might also remove the controversial PSLF residency exclusion, allowing training to count as it does now (since that provision might discourage people from needed fields or rural hospitals, which some Senators might oppose). There could also be political pressure to keep some version of the SAVE plan for existing borrowers or to not fully scrap Biden’s IDR improvements. Maybe they’ll allow SAVE to continue for those already on it, but close it to new borrowers – which is effectively what H.R. 1 does by date, but they might explicitly grandfather people. The current bill is already grandfathering in the sense of not yanking current borrowers off their plans, but it does force ICR folks into IBR, etc., which could be smoothed out.

• Perhaps the timeline could be adjusted. Instead of implementing everything by July 2026, amendments could phase changes in more slowly or start them later to give students and schools more time to adapt.

• If there’s bipartisan negotiation, some elements might be preserved: for example, the interest subsidy and principal match in RAP are actually generous to borrowers (and could be kept as a positive), whereas the elimination of PSLF for residents might be dropped if that’s seen as too punitive.

So, scenario 2 (amended passage) means some changes happen, but not as severely. Med students might still see a new IDR plan, but maybe it’s a 25-year forgiveness plan or keeps $0 payments for the poorest – who knows. Or the loan limits might not clamp down quite so hard. We’d have to see the details of any amended bill, but you would prepare for some changes but perhaps not lose as much flexibility as H.R. 1 initially proposed.

For planning: you’d still want to be cautious about borrowing (in case PLUS is limited you’d cap yourself anyway), and you’d still keep informed on what the new repayment rules turn out to be. But maybe you’d luck out with a compromise plan that, say, keeps PSLF intact or doesn’t extend the timeline to 30 years.

In any case, if the Senate amends the bill, there will be a process of reconciling with the House, etc., so final details could drag on. Medical students would be well-advised to stay in close contact with their financial aid offices and loan servicers during this period. Watch for official updates – e.g., Federal Student Aid might issue guidance if a new law passes with modifications to IDR.

3. If the Bill Fails Entirely (No Changes)

There’s a real chance that this legislation, at least the student loan portions, do not become law. Perhaps the Senate rejects it or it’s vetoed. If the student loan reforms in H.R. 1 die, then status quo prevails:

• Grad PLUS loans continue. You can borrow what you need for med school through the federal programs just as before. No aggregate caps beyond the current ones (which are high enough not to constrain med students in practice, since PLUS is unlimited to cost).

• The SAVE plan (or whatever IDR exists by then) would remain available. Biden’s SAVE plan – assuming legal challenges are resolved – would fully roll out, giving new med grads very low payments and 20–25 year forgiveness with no interest growth. Other plans like PAYE, IBR, PSLF, etc., would continue under their current rules. Essentially, the loan system for borrowers would remain as it was in 2024.

• For you, that means borrowing and repaying on current terms: you could take out all federal loans, use IDR during residency to keep payments affordable (possibly $0 or near $0), have interest subsidized under SAVE so your balance doesn’t explode, and aim for PSLF after 10 years if you go that route (with residency counted, meaning many physicians get forgiveness shortly into their attending phase if they stayed in nonprofit medicine). Or if you go private practice, you have the flexibility to refinance or keep on an IDR plan – basically, you have lots of options.

• Med students’ borrowing capacity stays high, which is a relief in terms of financing school (no scrambling for private loans), but of course high borrowing can mean high debt – which underscores why the whole discussion started. But at least you’d have the choice and the safety nets as currently designed.

• One caveat: even if H.R. 1 fails, student loan policy could still change through other means. For example, regulatory changes or smaller bills could still modify IDR plans or PSLF in the future. But nothing as sweeping as H.R. 1’s proposal would occur at this time. You’d continue to watch general policy trends (the fact that such a bill passed the House means there is momentum to reform IDR and Grad PLUS, so those ideas might resurface).

In this scenario, as a medical student you should continue using the tools available: maximize federal loans if needed (but borrow wisely), enroll in SAVE or other IDR for manageable payments, and pursue forgiveness programs if they align with your career.

In summary: No change means “keep calm and carry on” – but also note that the presence of H.R. 1 indicates some lawmakers want changes. Even if this attempt fails, be mentally prepared that future legislation might revisit graduate lending and repayment. It’s wise to not overextend debt even if you technically can, because policies can shift with elections.

Tips for Medical Students Moving Forward

No matter which scenario plays out, here are some actionable tips to navigate your student loans as a current or future medical student:

1. Stay Informed on Policy Changes: This cannot be overstated. Make it a habit to follow updates from reliable sources (Federal Student Aid announcements, AAMC Financial Aid office communications, White Coat investor blogs, etc.). If H.R. 1 or any similar bill progresses, read the summaries and understand the timelines. The rules could change by the time you graduate or start residency, so know what environment you’ll be repaying in. (For example, if RAP is coming, you’ll want to know how to enroll and what your payment might be.)

2. Maximize Federal Loans Before Deadlines: If it looks likely that Grad PLUS will be eliminated after a certain date and you have access to it now, make strategic use of it. This doesn’t mean borrow more than you need, but don’t unnecessarily use private loans or personal funds for things that federal loans could cover under better terms. E.g., if you’re in the Class of 2027 and laws might change for 2026-27, try to use the federal loans while available for your remaining semesters. This also might mean starting your program before changes kick in if you were on the fence about timing (though that’s a big life decision to rush, so only if it was already an option).

3. Budget and Plan for Shortfalls: If new limits do come into play, calculate the potential gap between cost of attendance and what federal loans cover. Begin exploring scholarships, grants, part-time work, or family support that could reduce your need to borrow. If you anticipate needing private loans, compare lenders early. Look at interest rates, deferment options during residency, and repayment terms. Having a strong co-signer (like a parent) might secure a better rate. It’s wise to borrow the minimum necessary from private sources due to their rigidity.

4. Adapt Your Repayment Strategy: Once you know what system you’ll be repaying under, adjust accordingly.

   • If the SAVE plan remains and you have high debt, you might aim for PSLF and keep payments low during training.

   • If RAP comes into effect, note that your payments in residency might be slightly higher than they would’ve been under SAVE (at least $10, likely more), so budget for that. The good news: interest won’t accumulate in either case, but under RAP you’ll also see your principal starting to inch down, which is psychologically nice.

   • Recalculate your projected loan payoff under the new rules. For instance, use the Loan Simulator on studentaid.gov (once updated for RAP if it happens) to see “If I’m an attending making X in 2030, what will I pay and for how long under RAP vs if I refinanced vs if I did PSLF?” These scenarios help guide decisions like when to refinance or how much to pay above the minimum.

5. Keep PSLF in perspective: If you’re an aspiring academic or public service physician, PSLF is a key program. If the law changes to exclude residency, you’ll need to plan for a longer PSLF timeline. That might influence your specialty or job choice if forgiveness is a big financial goal. Document your qualifying employment carefully (even if residency might not count for new folks, other jobs will). If H.R. 1 fails and nothing changes, continue to take advantage of PSLF as usual (make those 120 payments count!). If PSLF rules do tighten, you might consider alternative strategies like aggressive repayment or seeking loan repayment assistance programs through employers or state programs as a supplement.

6. Consider Loan Forgiveness vs. Repayment Trade-offs: For many med students, the debate is “Should I go for PSLF/forgiveness or just pay off my loans?” Changes in policy might tilt the balance. If forgiveness becomes harder (30 years or PSLF excluding training), more doctors may decide to refinance and pay off as quickly as possible once they have the means. Run the numbers for your situation. Action: Upon finishing residency, compare the total amount you’d pay on RAP for 30 years versus how much interest/principal you’d pay if you threw, say, an extra $1,000 a month at your loans to finish in 10-15 years. Your career plans and lifestyle goals will factor in – there’s no one-size-fits-all. But always know your options.

7. Seek Advice and Resources: Don’t do this alone. Use your school’s financial aid officers – they are there to help you interpret these policies for your case. Attend webinars or info sessions about loan repayment (AAMC FIRST program, for example, provides sessions for med students on loan strategies). If you’re in residency, your GME office or student loan ombudsperson can help. There are also reputable financial planners who specialize in physician finances – consider a consultation especially if big changes pass. Peer support counts too: talk to recent grads or those in repayment to learn how they are handling loans under the new rules.

8. Keep an Eye on Private Loan Refinancing: If you have a mix of federal and private loans (or end up having to take private loans due to caps), watch interest rate trends. When you’re an attending and if rates drop, refinancing could save money. However, do not refinance federal loans into private if there’s any chance you need IDR or PSLF – once privatized, they can’t go back. With H.R. 1’s RAP plan, the calculus might change for some – e.g., a surgeon with a high income might say “I’ll just refinance to a 10-year private loan at a lower rate and pay it off, rather than stick with 10% of income for potentially 15-20 years on RAP.” That could make sense in some cases. Just be sure you’re not forfeiting a benefit you might need (like hardship forbearance or forgiveness if you switch to a lower-paying career unexpectedly).

9. Live Like a Resident (within reason): This classic advice holds true under any regime. The less you borrow, the less you owe – so try to minimize expenses in school. And when in training, if your required payment is low (under SAVE or RAP), consider paying a bit more if you can afford to. Every extra dollar to principal will save interest in the long run. Under RAP, extra payments will shorten the effective 30-year term (since there’s no prepayment penalty). Under SAVE, extra payments won’t reduce your forgiveness time but will lower your balance (though some might argue to just invest extra money given low required payments – personal finance decisions vary). The point is: don’t borrow or spend with the assumption that forgiveness will wipe it all away easily. With policy changes, it’s safer to assume you’ll be responsible for the bulk of your debt and plan accordingly.

10. Advocate if Needed: If you strongly feel that certain changes (like the PSLF residency exclusion) are harmful, you can use your voice. Join organized medicine groups (like the AMA, or specialty societies) that lobby on these issues. There was significant public comment and pushback around these student loan provisions. As a med student or physician-in-training, your perspective is valuable. While you can’t single-handedly change laws, collectively students and professionals can influence legislators’ decisions, especially when they highlight impacts on the healthcare workforce (e.g., how strict loan policies might deter doctors from serving in rural or nonprofit settings). This is more of a long-term tip, but it’s empowering to engage in the policy process.

By following these steps, you’ll be better positioned no matter what happens: you’ll avoid unnecessary debt, be ready for repayment, and adapt to new rules without panic. Remember, you’re training for a long-term career, and student loans, while significant, are a temporary phase of that journey. With careful management, you can keep them under control.

Conclusion

The “One Big Beautiful Bill Act” carries big implications for how future doctors finance their education and repay loans. It’s a developing story that all medical students should watch. The good news: even in the new proposed system, there are protections against runaway debt and options to make payments manageable (interest subsidies, income-based caps, etc.). The challenge: students may need to be more resourceful with funding and patient with longer repayment horizons.

As you progress in your medical career, staying financially savvy is part of your professional well-being. Keep educating yourself (just like you stay up-to-date on clinical guidelines, do the same for loan policies!). Talk with your financial aid office or mentors about these topics – you’re definitely not the only one concerned about loan repayment. By planning ahead and adapting to policy changes, you can ensure that student debt is a controlled part of your life, not a derailment.

We’ll continue to monitor what happens with H.R. 1 and any other student loan reforms. White Coat Hub is here to help you navigate these changes, so stay tuned for updates. In the meantime, focus on your studies and training – a well-managed loan strategy will support you in reaching that end goal of becoming a physician, without undue financial stress. Good luck, and remember that knowledge is power… especially when it comes to your finances!

Works Cited

1. U.S. House of Representatives. H.R. 1 – One Big Beautiful Bill Act. 118th Congress (2025).

2. U.S. Department of Education. “Saving on a Valuable Education (SAVE) Plan.” Federal Student Aid, 2024.

3. Congressional Budget Office. “Cost Estimate for H.R. 1.” May 2025.

4. American Association of Medical Colleges (AAMC). “Education Debt Manager for Matriculating and Graduating Medical Students.” 2024.

5. U.S. Department of Education. “Income-Driven Repayment Plans.” Federal Student Aid.

6. Public Service Loan Forgiveness (PSLF) Program Regulations. U.S. Dept. of Education.

7. National Student Loan Data System (NSLDS). Summary of Federal Student Loan Portfolio, 2025.