A new study from Harvard Pilgrim Health Care Institute reveals that upcoming federal loan caps could pose significant financial challenges for medical students, particularly those from low-income backgrounds, threatening workforce diversity and exacerbating physician shortages.
Researchers from the Harvard Pilgrim Health Care Institute have released a groundbreaking study revealing the potential ramifications of new federal loan restrictions under the 2025 One Big Beautiful Bill Act (OBBBA) on medical students. The study, published today in the journal JAMA, provides a comprehensive national estimate of affected medical students.
With the United States leading the world in medical school expenses, federal loans have become essential for students to complete their education. The study warns that rising tuition costs combined with OBBBA loan restrictions could force students to turn to private lenders with higher interest rates. These financial burdens may dissuade students from pursuing essential but lower-paid specialties like primary care or deter them from entering medicine altogether, particularly impacting those from underrepresented backgrounds.
“The average cost of attending medical school has greatly increased in just over a decade,” lead author Tarun Ramesh, a research fellow at Harvard Pilgrim Health Care Institute, said in a news release. “Federal loan restrictions could leave many medical students, especially those from low-income backgrounds, without affordable options to complete their training.”
The study analyzed data from the National Postsecondary Student Aid Survey, focusing on federal loan usage, annual borrowing and total debt among medical students. Key findings include:
- A 38% increase in the average annual cost of medical school attendance from 2008 to 2020.
- A sharp rise in the use of Graduate PLUS Loans—enabling students to borrow up to their total cost of attendance—which will be eliminated under the OBBBA, from 13% in 2008 to 47% in 2020.
- In 2020, 40% of medical students borrowed more than $50,000 in a single year, and 14% had lifetime federal debt over $200,000, both of which would be capped by the OBBBA.
- Low-income and out-of-state students were most susceptible to exceeding both annual and lifetime loan caps.
“Graduate PLUS Loans have been a financial lifeline for nearly half of all medical students,” added senior author Hao Yu, a Harvard Medical School associate professor of population medicine at the Harvard Pilgrim Health Care Institute. “Eliminating this program will create substantial financial barriers for students and most likely reduce diversity in the physician workforce.”
The researchers hope that their findings of the potential real-world impact of the OBBBA’s restrictions on lower-interest federal student loans will encourage policymakers and medical schools to consider how the new law may affect medical education and physician workforce diversity. They urge stakeholders to explore targeted measures, such as loan-forgiveness initiatives or tuition-reduction programs, to mitigate the barriers posed by these new federal limitations.