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Politico
8 hours ago
- Business
- Politico
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.'
Boston Globe
09-06-2025
- Health
- Boston Globe
Trump budget's caps on grad school loans could worsen doctor shortage
Four years of medical education costs $286,454 at a public school, on average, and $390,848 at a private one, according to the Association of American Medical Colleges. Medical school graduates leave with an average debt of $212,341, the association found. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The price of a four-year program in osteopathic medicine is $297,881 at a public school, on average, and $371,403 at a private school, according to the American Association of Colleges of Osteopathic Medicine. The average indebtedness of their graduates is $259,196. Advertisement The proposed loan caps 'will either push students and families into the private loan market, where they take on more risk and have less consumer protection, or simply push people out of higher education altogether,' said Aissa Canchola Bañez, policy director at the Student Borrower Protection Center, a nonprofit advocacy group. Private student loans are also not eligible for Public Service Loan Forgiveness programs, which many students rely on to manage their debt. Students from low-income families may have difficulty qualifying for private loans. Advertisement In a letter to congressional leaders, the American Medical Association asked lawmakers to carve out exceptions in the law for medical education, saying that the current bill would deter good candidates from applying to medical school, discourage physicians from working in underserved areas, and make medical school unaffordable for all but the very wealthy. Critics said it could also drive more doctors away from lower-paying primary care fields, an area of acute need, and into more lucrative specialties. Conservatives have argued for decades that the availability of federal student loans allowed tuition costs to balloon — a proposition rejected by the Association of American Medical Colleges, which instead blames the rising cost of living. Studies examining the relationship between loans and tuition have varied in their conclusions. Sara Robertson, press secretary for Republicans on the House Education and Workforce Committee, said the proposed loan limits 'will drive down the cost of medical school and thus reduce the need for students to borrow in the first place.' She said private lenders would offer students lower interest rates than the government's Grad PLUS program would. The private market, though, has shrunk markedly since the Great Recession, according to Lesley Turner, an associate professor of public policy at the University of Chicago and an author of an unpublished paper that linked loans to rising tuition. In an email, Turner said it wasn't clear that 'the same level of nonfederal funding would be available today.' Because of inflation, she noted, the $150,000 limit for medical students is 'substantially reducing the amount these students can borrow, even compared to the status quo before the Grad PLUS program.' The program was started in 2006. Advertisement Robertson said schools could also help close the gap. 'Nothing in the bill prevents colleges from providing additional financial aid to low-income students pursuing medical school,' she said. That is not an option for schools of osteopathic medicine, most of which are private and not attached to universities with foundations, and which currently enroll almost one-third of the nation's future doctors, said David Bergman, senior vice president of government relations and health affairs for the American Association of Colleges of Osteopathic Medicine. And many academic medical centers, which have lost millions of dollars in research grants abruptly pulled by the Trump administration, are facing severe financial strain. A vast majority of medical students rely on loans, not just those from low-income backgrounds, Bergman noted. Ending federal involvement in administering and subsidizing student loans was one of the goals laid out in Project 2025, the Heritage Foundation's conservative blueprint for overhauling the government. It argued that leaving student loans to private lenders and ending federal loan forgiveness programs would 'allow for market prices and signals to influence educational borrowing.' Trump's policy bill would allow medical residents to defer not only their loan payments but also the interest on those payments, a provision that many medical professionals have supported. But the legislation would prohibit residents from counting those low-paid years of training as public service, limiting their eligibility for a popular loan forgiveness program that encourages young doctors to work in underserved areas. As a result, 'access to much-needed medical care for patients in rural and underserved communities will be diminished,' the American Medical Association's CEO, Dr. James Madara, wrote in the letter to House Speaker Mike Johnson, Republican of Louisiana, and House Democratic leader Representative Hakeem Jeffries of New York. Advertisement The changes will disproportionately affect low-income students with backgrounds that are underrepresented in medicine, who may face more difficulty obtaining private loans, said Dr. Virginia Caine, president of the National Medical Association, which represents Black physicians and which advocates for health equity. In turn, she said, it will limit those students' ability to return to serve in their communities. By 2037, the United States is expected to face a shortage of 187,130 physicians, including 87,150 primary care physicians such as internists and pediatricians who play a pivotal role in the early detection and management of chronic disease, according to the federal Health Resources and Services Administration. (There are currently 933,788 professionally active physicians.) About 75 million Americans live in areas where it is difficult to get access to primary care. The ratio of primary care providers is projected to decline to 76.8 per 100,000 people by 2037, from 81.6 per 100,000 in 2022. This article originally appeared in
Axios
21-05-2025
- Business
- Axios
Tax bill would cut availability of med school loans amid doctor shortage
A little-discussed provision on student loan policies in President Trump's massive budget bill would restrict borrowing for medical school and possibly exacerbate the country's physician shortage. Why it matters: The U.S. is already projected to face a deficit of 187,130 physicians by 2037, with shortages particularly acute in specialties like vascular and thoracic surgery. What they're saying:"We've got a tsunami of challenges already to deal with," said David Bergman, a senior vice president at the American Association of Colleges of Osteopathic Medicine (AACOM). "It just will be exacerbated by a lack of access to reasonably priced student loans." State of play: The GOP-led reconciliation bill moving through Congress would eliminate a federal loan program for graduate students called Grad PLUS. Loans would become unavailable for new borrowers starting in the 2026-2027 school year and for existing borrowers in the 2029-2030 term. The program allows graduate students — including those in medical and other health professions — to cover their full tuition and living expenses through the federal government. It helps make up costs after students exhaust the direct loans available to them. More than 80% of DO graduates who borrowed money for school relied on Grad PLUS loans, according to 2023 data from AACOM. The bill would also stop loan repayments during medical residencies from counting toward a loan forgiveness program; cap professional school federal loans at $150,000; and require universities to pay a portion of unpaid student loans back to the federal government. Zoom out: Many aspiring doctors rely on loans to finance their educations. More than 70% of medical students in the class of 2024 at MD-granting schools had education debt, with students borrowing an average of $212,341, per the Association of American Medical Colleges (AAMC). Private loans are available to medical students, but federal loans are often more attractive because they typically come with better terms and conditions. Federal student loan programs can be particularly important for students from lower-income backgrounds, who might be less willing to apply to medical school if have to take large, high-interest loans, Bergman said. The legislative changes are aimed at pushing medical schools to lower tuition, said Sara Robertson, press secretary for Republicans on the House Committee on Education and the Workforce. The changes will "reduce the need for students to borrow in the first place and nothing in the bill prevents colleges from providing additional financial aid to low-income students pursuing medical school," Robertson said in an email to Axios. Robertson pointed to a working paper published in 2023 by the National Bureau of Economic Research that found that Grad PLUS has not increased graduate school access, and also suggested the program has led to higher tuition costs. Eliminating Grad PLUS loans and changing loan limits would free up an estimated $34.7 billion between 2025 and 2034 to pay for the tax cut bill. The other side: Medical schools dispute the suggestion that these policy changes will drive down tuition and the overall cost of attending medical school. Median medical school tuition for an in-state student at an MD-granting state school is $50,218 this year. That's higher than last year's median tuition of $48,290, but lower than the $53,582 for 2020, per inflation-adjusted data from AAMC. Meanwhile, median living expenses for medical students have increased from $19,825 in 2020 to $21,950, according to the organization. While some studies do point to a relationship between increased availability of federal student loans and increased tuition costs, the broader literature is inconclusive. Between the lines: The changes moving through Congress could also affect access to graduate programs for other health care professions, like physician assistants.
Yahoo
17-05-2025
- Business
- Yahoo
Suze Orman's Warning For New College Grads: Maybe Don't Go Straight Into Grad School Just Because You Don't Land A Job
Graduating college is a major milestone — but this year, many students are stepping off the stage into an uncertain job market. In her recent blog post, financial expert Suze Orman points out that the current employment climate is being shaped by global economic shifts, including a tariff war and recession fears. As a result, some new grads are considering an immediate return to school instead of entering the workforce. While that might seem like a smart move, Orman has a clear message: "Slow down." Don't Miss: Inspired by Uber and Airbnb – Deloitte's fastest-growing software company is transforming 7 billion smartphones into income-generating assets – Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Graduate school can feel like a safe haven when job prospects are slim. The logic is easy to follow: get another degree, increase your qualifications, and come out the other side ready for better-paying work. But Orman urges graduates to stop and ask an important question: How will you pay for it? She points out that federal student loan programs allow graduate students to borrow significant amounts — up to $138,500 combined for undergraduate and graduate studies through the Direct Loan program. Additional funding is available through the Grad PLUS loan program, which allows borrowing up to the full cost of attendance. Neither program checks whether you'll realistically be able to repay those loans, she warns. "That is crazy," Orman writes. Trending: Hasbro, MGM, and Skechers trust this AI marketing firm — Too much debt early on can derail future plans. Orman recommends following college financing expert Mark Kantrowitz's rule: don't borrow more for school than you're likely to earn in your first year of work. For example, if your chosen field typically pays $60,000 a year starting out, your total education debt — both undergrad and grad — should stay under that amount. Going far above it could lead to a financial burden that sticks around for decades. Worse, it may push you toward higher-paying jobs you're not passionate about, just to keep up with payments. Orman also cautions parents and grandparents not to compromise their own financial stability to help pay for a child's graduate school. "Being able to support yourselves throughout your retirement must be your priority," she writes. That means family members should resist the urge to co-sign loans or dip into retirement savings for grad school costs. Instead, they can support their loved ones by encouraging smarter financial doesn't rule out graduate school completely. But she believes it's worth waiting. Working for a few years can give new graduates a better understanding of what they want in a career — and allow time to save for future education. Plus, gaining real-world experience can strengthen future grad school applications and lead to better scholarship or employer-sponsored education opportunities. In Orman's view, the key is to avoid rushing into more debt before having a clear plan. The goal is to make grad school a financially smart choice, not just a convenient escape. Read Next: Invest where it hurts — and help millions heal:. 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Image: Shutterstock Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Suze Orman's Warning For New College Grads: Maybe Don't Go Straight Into Grad School Just Because You Don't Land A Job originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
06-05-2025
- Business
- Yahoo
Private student loans could make a comeback under the GOP's new bill
More Americans will likely need to borrow private student loans to pay for college and graduate school under reforms Republicans are moving forward on Capitol Hill — especially if they want to become doctors or lawyers. GOP lawmakers are aiming to include a major shake-up of the federal student lending program in their party's marquee tax and budget bill, which they are piecing together in the House. Those changes include new lifetime loan limits that would have their biggest impact on students seeking professional degrees, according to an analysis by the Urban Institute, a Washington-based think tank. 'That's where you'll see more private loans and more private borrowing,' said Jason Delisle, an Urban Institute expert who authored the report. Private loans have made up a relatively small share of new student debt ever since the 2008 financial crisis. Back then, the Wall Street crash wiped out a boomlet in subprime education lending by companies like Sallie Mae, which had been fueled by the same sorts of securitization that inflated the mortgage bubble. Read more: What are private student loans? Around the same time, a combination of looser borrowing limits and more generous repayment options began to make federal loans a vastly more appealing option to most students. Today, private loans make up just under 8% of America's $1.6 trillion student debt burden. The GOP's proposal — known as the Student Success and Taxpayer Savings Plan — wouldn't necessarily lead to a massive surge in private loans. But it could force more students to consider them or find ways to borrow significantly less for their degrees. Sign up for the Mind Your Money weekly newsletter Subscribe By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Say goodbye to Grad PLUS One major reason: The Republican measure would put an end to the Grad PLUS loan program, which has allowed students seeking advanced degrees to borrow effectively unlimited amounts since it was created in 2006. Students would instead be allowed to take out up to $100,000 for graduate programs and $150,000 for professional programs like law and medicine. Learn more: How to pay off your student loans quickly Only about 13% of students who earned a master's degree in the 2019-2020 school year borrowed over the proposed $100,000 limit, according to Delisle's analysis. For professional students, though, it was a different story: Almost 39% of law students borrowed above the proposed $150,000 cap. The same was true for 75% of medical students and 62% of dentistry, pharmacy, and veterinary students. (Tuition averages about $59,000 annually at medical schools and $43,000 at law schools, according to the Education Data Initiative.)
