Loan Caps Threaten Future Doctors Amid Shortages
New federal limits on medical school borrowing spark fears of a worsening physician crisis.
Aspiring physicians like Michaela Bonner, a Norfolk-based EMT, are facing significant financial hurdles as recent legislation caps federal loan amounts for graduate studies, potentially jeopardizing dreams of entering the medical field.
Financial Roadblocks for Medical Students
A new federal law, enacted as part of a signature tax and spending package, imposes annual limits on unsubsidized federal loans for medical school. Students can now borrow a maximum of $50,000 annually, with a lifetime cap of $200,000. This change is already causing alarm among students like Bonner, who has been working demanding 12-hour shifts for four years while completing college prerequisites.
The legislation also marks a significant shift in the student loan landscape. Starting July 1, 2026, current repayment plans for federal loans will be halted, and Grad PLUS loans, which cover the total cost of attendance, will be terminated. Existing borrowers are grandfathered into current programs.
“I get told, ‘Well, we really need you. We have a physician shortage, and you’ve done all this work leading up to this point,’ and that’s true as well, and it’s not that I want to quit,” Bonner stated in a recent interview. “But there are no systems in place that I can rely on to support me now that I can’t take out the full cost of living through loans.”
—Michaela Bonner, EMT
Exacerbating Existing Physician Shortages
The average annual cost for medical school in the 2024-25 academic year ranged from $42,000 to $72,000, depending on institution type and residency status, according to the Association of American Medical Colleges. The new loan caps could force students into private loans with higher interest rates or deter them from pursuing medical careers altogether.
This comes at a critical time, as national physician shortages are projected to intensify. The deficit could exceed 100,000 physicians by 2034, up from a previous estimate of 64,000 at the end of 2024, according to McKenzie Richards, a health care policy fellow at the Cicero Institute.
Some congressional Republicans argue that students should bear more of the financial responsibility for higher education, while others believe these caps will pressure universities to reduce tuition costs. However, critics contend that the restrictions will disproportionately harm students from lower-income backgrounds and worsen the physician deficit.
States Seek Solutions Amid Federal Changes
In response to physician shortages, many states have implemented various policy solutions. Since 2023, at least nine states have streamlined licensing for internationally trained doctors. States are also participating in interstate compacts to allow nurses and physician assistants to practice across state lines. Additionally, over 20 states have enacted legislation concerning student loan forgiveness, such as Georgia’s expanded loan program for rural physicians and Idaho’s Rural Nursing Loan Repayment Program.
Richards emphasized the need for proactive state-level policies. “We know what’s going to be happening coming down the line in just five years, so I think policies that states can adopt to get out of this are really important to be looking at now,” she told Stateline.
Shannon Jimenez, dean of the Arkansas College of Osteopathic Medicine, expressed concern that the loan caps will push students away from primary care and into lucrative specialties to manage debt. She noted that this could particularly impact underserved areas with existing “maldistribution of physicians.”
“Many schools like us try to attract those students, because they’re more likely to go into primary care and serve in underserved areas. So it’s going to tie our hands in a lot of ways.”
—Shannon Jimenez, Dean, Arkansas College of Osteopathic Medicine
Institutions like Jimenez‘s face significant operating costs, making tuition reduction unlikely. “We still function in a somewhat market-driven economy and have to compete with other schools around us, so our cost is based mostly on what we have to pay our faculty, and that’s not going to go down,” she explained.
Bonner, who currently has $20,000 in existing loans and has paid for the rest of her undergraduate studies out-of-pocket, fears the financial strain of medical school. “Medical school scheduling doesn’t allow for working, so you have to take out loans for living expenses,” she said.
The financial uncertainty could deter many from pursuing advanced degrees. “A lot of people, I feel, would be panicked if you had worked for eight to 10 years of your life and found out that all the systems that you were banking on in a really academically challenging space are disappearing,” Bonner added.
“I don’t see a path forward for certain, but I’m fighting to make one,” she concluded.
