Boston, MA — Researchers from the Harvard Pilgrim Health Care Institute have produced the first national estimate of how many medical students would be affected by new federal loan restrictions imposed by the 2025 One Big Beautiful Bill Act (OBBBA). Their findings suggest the reforms are likely to place substantial financial barriers on aspiring physicians, potentially reducing workforce diversity and worsening existing physician shortages.
The study, "Federal Loans Among US Medical Students, 2008-2020," was published on November 26 in JAMA.
With the U.S. leading the world in medical school costs, students increasingly depend on federal loans to finance their education. This new study cautions that the combination of rising tuition and OBBBA loan restrictions may force medical students toward private lenders with higher interest rates, discourage them from choosing lower-paid but essential specialties such as primary care, or deter them from entering medicine altogether, disproportionately impacting underrepresented students.
"The average cost of attending medical school has greatly increased in just over a decade," said Tarun Ramesh, research fellow at Harvard Pilgrim Health Care Institute and lead author of the study. "Federal loan restrictions could leave many medical students, especially those from low-income backgrounds, without affordable options to complete their training."
Using national data from the National Postsecondary Student Aid Survey, the researchers analyzed federal loan usage, annual borrowing, and total debt among medical student—examining differences by characteristics such as age, sex, income, state of residence, and awareness of loan forgiveness programs. Key findings include:
- A 38% increase in the average annual cost of medical school attendance between 2008 and 2020.
- A sharp rise in the use of Graduate PLUS Loans—which allowed medical students to borrow up to their total cost of attendance but 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 exceeding $200,000—both thresholds that would be capped by the OBBBA.
Low-income and out-of-state students were most likely to exceed both annual and lifetime loan caps. "Graduate PLUS Loans have been a financial lifeline for nearly half of all medical students," said Hao Yu, Harvard Medical School associate professor of population medicine at the Harvard Pilgrim Health Care Institute, and senior author of the study. "Eliminating this program will create substantial financial barriers for students and most likely reduce diversity in the physician workforce."
The research team hopes that highlighting the likely real-world impact of the OBBBA's restrictions on lower-interest federal student loans will prompt policymakers and medical schools to consider the new law's implications for medical education and physician workforce diversity. They urge exploration of targeted solutions such as loan forgiveness or tuition reduction programs to offset the barriers the new federal restrictions may create.
About the Harvard Pilgrim Health Care Institute's Department of Population Medicine
The Harvard Pilgrim Health Care Institute's
