For many clinicians, medicine is more than a profession; it’s a purpose. Our 2025 joint research with LocumTenens.com found that nine out of ten physicians feel “called” to the profession. Some had a personal experience with healthcare — either positive or negative — that compelled them to pursue a medical career. Others had a mentor or teacher who pushed them down the path, while others simply saw it as a way to serve humanity and felt it was their purpose to do so.
Fulfilling that noble purpose is not always as simple as it should be, and one of the biggest hurdles occurs before would-be clinicians even get started. The cost of pursuing a medical education can be a significant deterrent to pursuing the calling, with the average cost of one year of medical school being $59,720. At that price, it’s not surprising to learn that three in four practicing physicians borrowed money to pay for medical school.
As Regional Vice President of Recruitment for Jackson Physician Search, I talk to residents and early-career physicians every day about their job search priorities, and compensation understandably tops their lists. The average medical school graduate leaves school carrying more than $200k in debt, so they are seeking opportunities that will help them pay off their loans as quickly as possible.
New limits on federal student loan borrowing under the One Big Beautiful Bill Act (OBBBA), along with evolving rules for Public Service Loan Forgiveness (PSLF), could reshape how future clinicians finance their education and how current providers manage debt. Here’s a high-level look at the policy shifts, what they mean for you, and how they may impact the profession as a whole.
What’s Changing: New Borrowing Caps Under OBBBA
The OBBBA, signed into law in mid-2025, includes sweeping reforms to federal student loans that take effect primarily in July 2026. At the center of these reforms are new caps on federal borrowing for graduate and professional education. The American Medical Association offers a detailed summary, with highlights below:
- Annual and lifetime loan limits are being introduced. Graduate students can generally borrow up to $20,500 per year and $100,000 over their lifetimes in federal loans.
- For students in designated “professional” degree programs, the caps rise to $50,000 per year and $200,000 total. This category explicitly includes medicine, dentistry, pharmacy, law, and a limited set of other degrees, but notably excludes nursing.
- A lifetime borrowing ceiling of about $257,500 applies to all federal student loans taken out across undergraduate and graduate study.
- The Grad PLUS loan program, which has historically allowed medical and similar students to borrow up to the full cost of attendance, will be eliminated for new borrowers after July 1, 2026.
The stated intent of these reforms is to drive down the cost of education, a worthy goal, but the Association of American Medical Colleges (AAMC) cites data that cast doubt on the likelihood of this outcome. With the average cost of medical school already above these caps, these reforms could force students to absorb the difference through private loans or personal resources. They could also cause lower-income students to reconsider attendance altogether.
Professional Degree Classification: A New Battleground
A particularly controversial element of the new policy is how degrees are classified. Currently, federal guidance defines a narrow set of fields as “professional” for the higher borrowing caps. While MD and DO programs are included, fields such as nursing (including advanced practice), physician assistant studies, physical therapy, and other high-demand clinical degrees are excluded from this list.
An article for NPR sheds light on why this classification matters:
- Excluded programs default to the lower $20,500 annual/$100,000 lifetime cap, regardless of actual cost.
- Emerging evidence and analyses from advocacy groups suggest this could make advanced nursing education and other clinical graduate programs financially inaccessible for many trainees, exacerbating workforce shortages already felt in primary care and rural settings.
Professional organizations — including the American Association of Nurse Anesthesiology and the American Association of Colleges of Nursing — are actively pushing back, arguing that licensure-required graduate education in these fields should qualify for the higher caps.
Public Service Loan Forgiveness: Rule Changes and Uncertainty
Alongside borrowing limits, federal regulators are revising rules for the Public Service Loan Forgiveness program (PSLF). The PSLF program has long offered loan cancellation after 10 years of qualifying payments for clinicians working in nonprofit or public service settings. According to the AAMC, 63% of medical school graduates plan to pursue loan-forgiveness opportunities, and 88% of those were specifically interested in PSLF.
A new rule change seeks to reevaluate which employers and types of service count toward PSLF. The rule in question — currently facing legal challenges — would bar forgiveness for individuals working for organizations engaging in activities deemed “illegal” under broad federal definitions. Critics argue these provisions could severely limit PSLF options for some health care providers, likely causing trainees to reconsider working in lower-paying specialties and/or underserved communities. A statement from the American Academy of Family Physicians emphasizes the importance of PSLF options for physicians choosing lower-paying specialties, such as family practice.
What This Means for Physicians, APPs, and Trainees
The implications vary depending on your career stage:
For Trainees
- You may face lower federal loan caps than predecessors, especially if you’re entering a field the government does not classify as “professional.”
- Consider strategic financial planning earlier in your training to bridge gaps between tuition/living costs and federal loan limits, including scholarships, service-linked programs, or alternative funding.
- Monitor whether your program’s classification changes during rulemaking — it could materially affect your borrowing ability.
For Current Providers with Debt
- Existing loans generally remain on previous terms, but future refinancing or new loans (e.g., for additional degrees) will be subject to the new caps.
- If you’re enrolled in PSLF or an income-based repayment plan, stay updated on regulatory guidance and ensure your employment and repayment plans align with evolving criteria.
- When job searching, prioritize employers offering recruitment incentives for loan forgiveness.
- Engage with professional organizations advocating for clinicians; these policy debates will shape workforce pipelines.
For the Profession at Large
- Policy-driven access to education influences who enters medicine, nursing, and advanced practice. Restrictive loan caps could skew the workforce toward higher-income backgrounds, contradicting diversity and equity goals.
- Workforce shortages in primary care, rural health, and underserved communities may be exacerbated if prospective students reassess their career choices due to financing constraints.
- Healthcare organizations may need to increase and/or reallocate recruitment incentives toward loan forgiveness, especially if they are at risk of losing their PSLF eligibility.
When Purpose Meets Practicality
Medicine is indeed a calling, but even those with a higher purpose must face the practicality of financing a medical education. The federal government has long offered both subsidized and unsubsidized loans to help minimize the financial obstacles associated with pursuing higher education, making it attainable for students regardless of their backgrounds or income levels.
Federal funding for student loans remains available, but the recent changes could significantly affect the clinician workforce. While the stated intent of these changes — reducing tuition — may be good, the impact, at least in the short term, could discourage students without means from pursuing medical degrees, decrease options for loan relief, and ultimately worsen the shortage of providers.
Despite these additional hurdles, clinicians and trainees must not be deterred. Stay focused on the higher purpose of your calling while staying informed, planning ahead financially, and engaging in ongoing advocacy. Remain engaged and use your voice as the debate surrounding these changes continues to unfold.
If you are a resident seeking your first opportunity or a physician seeking a change, reach out to the physician recruitment team at Jackson Physician Search today, or search for physician jobs online now.
Sources & Further Reading
- Average Cost of Medical School (Education Data Initiative)
- Average Medical School Debt (Education Data Initiative)
- Federal student loans and the One Big Beautiful Bill Act (American Medical Association)
- Proposed changes to federal student loans could worsen doctor shortage (Association of American Medical Colleges)
- New limits on school loans could narrow physician and nurse pipeline, educators warn (NPR)
- Proposed Student Loan Caps Put Nurse Anesthesia Education and Patient Care at Risk (American Association of Nurse Anesthesiology)
- AACN advocacy on nursing degree classification (American Association of Colleges of Nursing)
- Restoring Public Service Loan Forgiveness to Its Original Purpose (Department of Education)
- Student Loan Caps Could Strain Clinician Workforce (Becker’s Hospital Review)
About Tonya Hamlin
With over 20 years of experience in the healthcare industry, Tonya Hamlin has a relentless passion for connecting physicians and advanced practice providers with health systems and medical groups. Prior to joining Jackson Physician Search, Tonya served as a physician recruiter for an integrated delivery system. Her unique vantage point allows her to identify the best candidates and offer valuable market insights to her clients, ensuring strategic decisions that drive results. As Regional Vice President of Recruiting for Jackson Physician Search’s Dallas Division, she excels in understanding the distinct needs of each client and delivering customized recruitment strategies.
