Republicans' loan plan presents new obstacles for low-income students

A series of changes to long-running federal student loan programs tucked into the Republican tax plan has doctors panicked and struggling to find GOP allies.
The Senate education committee's portion of President Donald Trump's 'big, beautiful' bill includes a new cap on how much people can borrow for medical school and other professional programs that is well below the sticker price most students are facing. Lawmakers are also proposing to nix a class of federal loans graduate students use to cover housing and other non-tuition expenses.
For low-income and first-generation college students with aspirations of becoming physicians, these plans, if enacted, could squash their dreams, according to medical college leaders. As the full Senate irons out the bill and Trump rattles school finances with funding freezes, doctors' groups are asking Congress to preserve the more generous loan options or risk a sharp drop in who's studying medicine — a profession that's already facing a shortage.
While part of the stress on poorer students comes from the ever-increasing cost of higher education, the bill would likely push more of them toward private loans that require a co-signer, which are out of reach for many, and come with steeper interest rates.
'A lot of our medical schools, mine included, have a lot of first-generation college students. When they come into medical education, more times than not, they don't have co-signers,' said John L. Hummer, president of Burrell College of Osteopathic Medicine, a school with campuses in New Mexico and Florida for which 81 percent of students depend on the federal Grad PLUS program Republicans are looking to eliminate.
The Senate education tax bill establishes a $200,000 ceiling on federal student loans for professional degrees, like medicine. But the median cost of attending four years of medical school for the class of 2025 is $286,454 for public institutions and $390,848 for private schools, according to the Association of American Medical Colleges.
It's a range that exceeds the costs many doctors now serving in Congress paid when they earned their degrees. Many did not respond to inquiries from POLITICO about how the One Big Beautiful Bill Act would affect medical school enrollment — and those that did were not sympathetic about student debt.
'You're looking at a person, a first-generation college student, who went to medical school, and didn't borrow money,' Sen. Roger Marshall (R-Kan.), who sits on the Senate HELP Committee, said. 'I worked my tail off. Anyone who is paying more than $100,000 to go to school is making a huge mistake.'
Marshall graduated from the University of Kansas School of Medicine in 1987, when the average in-state tuition for a public medical school nationally was around $4,696. That sum in today's dollars is about $13,300 — far less than what the Kansas program costs in 2025.
Members of the medical community believe limits on federal loans or steering students to borrow from private lenders will exacerbate a long-running national physician shortage the Association of American Medical Colleges projects could be as high as 86,000 doctors by 2036.
David Bergman, senior vice president of government relations and health affairs at the American Association of Colleges of Osteopathic Medicine, said students at medical schools his group represents have said it's been difficult to access private loans. Some lenders, like PNC Bank, hold student debt for which about 90 percent of private loans have a co-signer, while others had interest rates as high as 16 percent — nearly twice that of a Grad PLUS loan.
'The consequence of all this, of course, is that it's the low-income students who are going to suffer the most,' Bergman said. 'They may not have great credit, so then they may not be able to get the loans. Or they may get higher rate loans that put them further in debt.'
One former Trump administration official shares this concern.
'I do worry about the assumption that the private sector is going to step in,' said Diane Jones, a former Education Department official from Trump's first term. 'Maybe they would, but I'm not sure they would step in to make loans available to low-income students.'
Even some people in the lending business are skeptical the industry's bigger players will change their rules around co-signers.
'It just takes a lot more energy because it's riskier. Period. Banks aren't in the business of doing riskier products,' said Ken Ruggiero, co-founder and CEO of Ascent, a private loan company that will lend to applicants without a co-signer. 'They are in the business of talking to a person who has a very good income and credit score and letting the student sign the agreement.'
The House version of the bill would also shut down Grad PLUS and put a cap on lending to graduate students for professional programs, putting pressure on the Senate to change course.
But HELP Committee Chair Sen. Bill Cassidy (R-La.) said there needs to be more accountability for the high tuition prices writ large that aren't exclusive to medical schools.
'There should be some ratio between earning potential and what it costs,' Cassidy said. 'I met with neurosurgeons and cosmetologists and they had the same discussion about the cost of education.'
Jason Goldman, president of the American College of Physicians, which represents internal medicine doctors, related specialists and medical students, is skeptical that capping loan amounts would force medical schools to immediately lower tuition. Over the span of 21 years, medical school tuition has gone up 81 percent, outpacing inflation, according to AAMC.
'The reality is it's very expensive to train a physician — the amount of hours that go into lectures, labs, professors and housing and everything it takes to graduate is expensive,' Goldman said.
He fears that some students may be dissuaded from becoming primary care doctors, a specialty where shortages are profound, especially in rural areas.
Some in Congress have pushed Education Secretary Linda McMahon to address proposed limits to federal lending for student borrowers pursuing health care-related degrees. During a House Appropriations Committee hearing in May, Rep. Lois Frankel (D-Fla.) asked McMahon to take a look at aid programs that help students complete their degrees.
'We do know we have a shortage of nurses and doctors,' McMahon said. 'I think there are a lot of programs we can look at to train nurse technicians to get them into the marketplace faster.'
Other Congress members have proposed student loan changes outside of the One Big Beautiful Bill Act to address health care shortages.
Sens. Roger Wicker (R-Miss.) and Jackie Rosen (D-Nev.) introduced legislation in April that would create a student loan repayment program for specialists within medical professions who practice in rural areas. They also introduced the Specialty Physicians Advancing Rural Care Act in previous legislative sessions citing a dearth of providers in rural communities.
'The entire nation is dealing with a physician shortage, and rural communities in Mississippi have been particularly affected,' Wicker said in a statement. 'Congress can help provide a solution.'
Jones, the official from Trump's first term, also worries that some students may have to forgo medical school because they won't be able to secure financial assistance.
She attended medical school in the 1980s when the loan program she was using was suspended, ultimately leading her to drop out because she could no longer afford the program.
'I didn't have a parent who could co-sign for a private loan, and I didn't have access to any other resources,' she said. 'I personally lost the opportunity to pursue the career that I wanted, that I had earned the right to pursue.'

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