Key Changes for New Medical School Borrowers in 2026

The average debt for a medical school graduate is approximately $200K. While this

number seems daunting, it’s also important to note that, generally speaking, doctors are

among the top 1% of earners in the U.S. Historically, this debt is paid off through a

combination of high incomes, strategic repayment plans, qualifying for Public Service

Loan Forgiveness, or working additional hours to accelerate loan repayment.

At the same time, the cost of medical school continues to rise each year by about 3-4%.

When considering the total cost of attendance (tuition+fees+housing+meals) for four

years, the average cost is about $300K for a public medical school and $400K for a

private medical school.

How will the federal student aid changes, effective July 1, 2026, under the One Big Beautiful Bill Act affect future physicians?

1. Elimination of Graduate PLUS Loan Program: This program previously

allowed medical students to borrow up to the total cost of attendance to fill the

gap between financial aid and living expenses. Its elimination will likely force

more students to rely on private loans, which typically offer less favorable terms,

fewer borrower protections, and no eligibility for federal loan forgiveness or

income-driven repayment.

2. New Graduate Unsubsidized Direct Loan Limits: Borrowing will be capped at

$50,000 per year, with a $200,000 lifetime limit. Medical students will no longer

be eligible to receive Direct Subsidized Loans.

3. Changes to Repayment Plans: The new income-based Repayment Assistance

Plan calculates payments as a percentage of a borrower’s full adjusted gross

income, generally resulting in higher monthly payments than under previous

income-driven repayment plans.

4. Impact on Public Service Loan Forgiveness (PSLF): Time spent in medical

residency or fellowship will no longer count toward the 120 qualifying monthly

payments required for PSLF. This change will significantly extend the time to

forgiveness for physicians in qualifying public service roles.

As students and advisors work to understand and navigate these changes, it may be

worthwhile to explore alternative funding options for medical school. While highly

selective, a few medical schools such as Johns Hopkins School of Medicine, NYU

Grossman School of Medicine, and Albert Einstein College of Medicine offer full or

need-based tuition coverage. Alice L. Walton School of Medicine is tuition-free for its

first five cohorts, beginning with its inaugural class in 2025. Service-based programs

include the Uniformed Services University, which provides full funding plus a salary, and the National Health Service Corps Scholarship, which covers tuition and fees and

provides stipends for living and educational expenses. These options require a

commitment to service following residency.

Final Remarks

Choosing a career in medicine is a lifelong commitment to learning, service, and

professional growth. Recent financial changes for future borrowers may pose

challenges on this path, potentially affecting the physician workforce and patient care. If

you would like guidance or support on your journey, we are here to help!

Fill out our consultation form for a free meeting to talk over your candidacy.