Loan plan in Republican bill could worsen doctor shortage, experts warn

Doctors’ associations, medical schools and student advocates warn that a proposal in the Republican-led budget bill being considered by Congress restricts graduate federal student loans and could worsen a national shortage of doctors.

The new Republican proposal would limit federal student loans for “professional programs” – such as medical school – to $150,000, eliminate a federal graduate loan program and put limits on loan forgiveness.

Medical students rely heavily on federal student loans to finance lengthy and expensive educations, particularly since 2006, when Congress broadly lifted caps on borrowing limits to allow for the full cost of tuition and living expenses.

“Our organization is very concerned about this,” said Dave Bergman, a spokesperson for the American Association of Colleges of Osteopathic Medicine (AACOM). He said about four in five students who attend osteopathic medical schools, which grant the doctor of osteopathy or “DO” designation, use Grad Plus loans and many depend on student loan forgiveness.

The changes are part of the 1,100-page Republican-led reconciliation bill dubbed the One Big Beautiful Bill Act that Donald Trump sees as core to his second term in office. The legislation passed the House last week and is now being considered by the US Senate.

“When there is a stated goal from these policymakers to increase the physician workforce, to increase the number of primary care physicians and expand access in rural and underserved areas – these policies just don’t align with those priorities,” said Bergman. “It’s a really bad workforce decision.”

The Association of American Medical Colleges estimates the US will face a shortage of between 37,800 and 124,000 physicians by 2034, with specialties such as primary care, psychiatry and geriatrics especially affected.

Advocates warn the curtailing or eliminating federal student loan programs could drive low-income students away from pursuing medicine as a career, make loans harder to repay, or push students into the arms of expensive private lenders, advocates told the Guardian.

In turn, these changes could also worsen the flight of doctors from lower paid specialties, especially family medicine, primary care and pediatrics, which tend to have lower match rates than higher paid specialties such as cardiology, experts said.

“I, along with many others, worry that these changes will make medical school unaffordable, turn loan repayment into a pipe dream for residents, and worsen physician shortages – especially in primary care and underserved areas,” wrote recent medical school graduate Kaley Parchinski in a Stat editorial.

An analysis by the Urban Institute, which studied the proposal when it was first introduced by Republican North Carolina representative Virginia Foxx in 2024, found the limits could affect more than 60% of students pursuing medicine and other health professions.

“At a time when our country urgently needs more doctors – especially in underserved areas – this bill would create new financial and logistical barriers that disproportionately harm low-income students,” said Dr Shannon Udovic-Constant, president of the California Medical Association, in a statement.

The limits on graduate education would join limits on student loans seeking four-year degrees in a way that critics warn could make completing college more difficult for low-income students.

Sara Partridge of the Center for American Progress said the changes risk “creating or exacerbating [shortages] in essential and medical and healthcare fields, and reducing pathways to high-paying, in-demand career fields for students in underrepresented backgrounds”.

The federal government has guaranteed student loans as a form of financial aid since 1965, part of a program called the Federal Family Education Loan program. These loans are a major payor for American medical schools, whose tuition costs have increased dramatically in cost since the mid-20th century, in line with other forms of higher education.

Because of the long training requirements for doctors, aspiring physicians often graduate with large debt burdens, and how to decrease that burden has been a subject of bipartisan debate. The median indebtedness of a medical student who carried loans was $205,000 in 2023 according to the AAMC – or more than $50,000 short of the limit placed by congressional Republicans.

House Republicans argue that uncapped student loan access has driven up the cost for expensive professional degrees, and that limiting federal loans would help drive down the cost of tuition. Dually, Republicans have argued that if students need more financing they can go to the private market.

“It is extremely costly to get a medical degree,” said Sara Robertson, spokesperson for Republicans on the House committee on education and workforce, which drove the proposal. “Reforms in the bill will help put downward pressure on prices at medical schools so that future medical students can pay lower tuition costs, thereby making medical school more accessible to individuals from all backgrounds.”

Robertson argued that, although the bill would limit how students can earn credits toward loan forgiveness during residency, it would allow them to defer interest and that private student loans would become available.

“For borrowers who do need to borrow more than the bill’s loan limits, private student loans – particularly for medical students – will be widely available and often have interest rates,” said Robertson.

However, because of relatively high earnings, medical students are also among some of the least likely students to default – limiting government risk. An average of 8.15% of all student loan debt is in default at any time, according to the Education Data Initiative, while just over 1% of osteopathic medical students miss loan payments, according to AACOM.

Further, economists who have studied the issue – including those whose work Republicans have cited – warned there could be unintended consequences to altering these programs.

“The private loan market looks very different than it did in the years before Grad Plus,” in 2006, said Lesley Turner, an economist and associate professor at the University of Chicago Harris School of Public Policy.

Turner and her co-authors wrote a paper which found that graduate loans, unlike loans for four-year degrees, likely raise the cost of graduate tuition. Robertson cited the paper to Axios.

Turner said the Republican bill proposes a far lower limit for federal student loans than in 2006, the time before the Grad Plus program was created. Aggregate loan limits adjusted for inflation and for health-related programs, such as medical degrees, were “almost $300,000 … so almost double the limit the House proposed.”

“This isn’t going back to where we were in 2006, this is going back to that and then cutting it in half,” Turner said. “It’s not clear that the private student loan market would fill in that gap.”

Turner’s co-author, labor economist Jeff Denning at the University of Notre Dame, said he had “mixed feelings” about the proposal.

“Uncapped borrowing is probably not a great policy,” said Denning, “but capping it might have these unintended consequences particularly for high tuition programs including medicine.”