The “One Big Beautiful Bill” Just Made It Harder To Afford Medical School

The 2025 federal budget bill, H.R. 1, was signed into law last week. In it were provisions that limit the amount of federal student loans that medical students can take out. For many students, this will mean taking out additional private loans in order to attend medical school.

H.R. 1 (aka, the “One Big Beautiful Bill”) contains provisions in section 81001 (page 263 of the PDF version of the bill) that change the limit on the amount that students can borrow from federal direct loans. In the past, there were three types of federal direct loans:

1. Federal direct subsidized loans. These are for undergraduates with financial need and currently come with a 6.53% interest rate.
2. Federal direct unsubsidized loans. These are for either undergraduates or graduate/professional students regardless of financial need and currently come with a 6.53% interest rate (undergraduates) or 8.08% interest rate (graduate/professional students).
3. Federal direct plus loans. These are for graduate and professional students (or parents of these students) and cover educational costs that exceed the limits of the federal direct unsubsidized loans. They come with an interest rate of 9.08% (dropping slightly to 8.94% after July 1, 2025).

H.R. 1 eliminates the federal direct plus loans and puts a cap on the total amount of federal direct subsidized and unsubsidized loans that each student is eligible for. For medical students, this cap is $50,000 per year and $200,000 total. This amount is in addition to the amount borrowed for undergraduate education.

Medical school is expensive

For the overwhelming majority of students, the $200,000 cap on federal loans for medical school will not be sufficient and they will need to look for other ways to pay for their medical degree. According to the Association of American Medical Colleges, in 2025, the median total cost to attend an in-state public medical school for 4 years is $286,484. For private medical schools, that cost is $390,848. Fortunately, most students can obtain scholarships and/or financial support from their parents to pay for at least some of the costs of their medical education. As a result, only 73% of students at public medical schools and 67% of students at private medical schools have to take out loans to get through medical school. For those who do take out loans, the median amount borrowed specifically for medical school is $200,000.

On the surface, it would appear that the federal direct unsubsidized loan limit for medical school of $200,000 aligns with the median amount borrowed by medical students of $200,000. But there is danger in the use of median values because statistically, 50% of the students will borrow more than the median amount. Therefore, 37% of students attending public medical schools and 34% of students attending private medical schools will be unable to finance their medical education through scholarships, parental support, and federal direct loans. In the past, these students could take out federal direct plus loans to cover the gap between the cost of their medical education and the limit by the federal direct unsubsidized loans. H.R. 1 eliminates the federal direct plus loan program so this is no longer an option.

So, what can these medical students do?

The good news is that physicians are well-paid after completing their residencies and fellowships. Thus, student loan repayment is less of a burden for doctors than for those with other degrees. But it is hard to see that when a medical student is facing borrowing $300,000 or $400,000 to pay for 4 years of medical school and will not be getting an attending physician income until after an additional 3 to 7 years of residency and fellowship training. There are steps that these students can take:

1. Apply for scholarships. On the surface, public medical schools are considerably more expensive than private medical schools. However, many private medical schools have large endowments directed for scholarships. Thus, in some cases, it may actually be less expensive for a given student to attend a private medical school than to attend a public medical school. In addition, there are scholarships available at public medical schools that can defray the cost of education. Talk with the financial aid office of every medical school you get accepted to before making a decision about which school to attend.
2. Take a gap year to work. As I’ve written in a previous post, I am not a fan of gap years and I believe that our medical school admissions committees overvalue them. On the surface, taking a year or two between college and medical school would seem to allow a future student to earn additional money to help pay for medical school. However, medical school admissions committees are not looking for applicants who spent their gap years working as highly-paid investment bankers or software engineers. Instead, those committees are looking for applicants who spent their gap years in low-paying jobs like public health and medical research. The bottom line is that gap year earnings contribute little, if any, toward the cost of medical school.
3. Choose your medical school wisely. Without scholarships, private medical schools cost an average of just over $100,000 more than public medical schools. Too many undergraduates believe that the notoriety of a famous private medical school equates to a better education than a public medical school. But for most physicians it really makes no difference whether they attend a private or public medical school. A family medicine physician who went to Harvard Medical School is going to have pretty much the same income as a family physician who went to the Ohio State University College of Medicine. Unless that private medical school can come up with a lot of scholarships, you are probably better off going to a good public medical school in your home state.
4. Consider the military. The armed forces as well as the National Health Service Corps provide scholarships for medical students (often full-ride). For those willing to spend several years in the military or National Health Service Corps, this can be a great way to pay for medical school.
5. Consider a practice agreement. Some smaller communities will pay for some or all of the cost of medical school in return for an agreement that you will practice in that community after you complete your training. This is most commonly for those planning a career in primary care (rather than subspecialties).
6. Private loans. These often come with higher interest rates and less favorable repayment plans than federal direct loans. Nevertheless, they can cover the gap previously covered by the federal direct plus loans. These are typically available at banks and credit unions. Because of the variability in rates and terms, it is best to shop around before signing a loan contract.
7. Work part-time. Medical school is demanding and doesn’t leave much free time. However, there may be time during the summers of 1st and 2nd years, vacation months during 3rd and 4th years, and holidays to earn a little money. I was fortunate to be able to work in a research and clinical lab during my vacation time during medical school. I didn’t make a lot but it was enough to help pay the rent.
8. Get a roommate. Housing costs are a significant expense during medical school. Living with a roommate(s) can substantially reduce those costs.
9. Don’t waste money on stupid stuff. Every human needs to prepare an annual budget but medical students really, really need to prepare budgets. Do you really need to buy concert and football tickets? Is it cheaper to rent an expensive apartment close to campus so as to avoid having to pay for even more expensive parking? At Mayo Clinic, medical students are required to wear (expensive) business suits whereas at most reasonable medical schools you can get by with Dockers and a permanent press shirt.

What can physicians do?

As practicing physicians, we have an obligation to ensure that the best and brightest students enter our profession. For many potential students, the cost of medical school can pose an insurmountable barrier. There are steps we can take:

1. Contribute to scholarships. Every year, my wife and I contribute to our undergraduate and medical school alma maters’ scholarship programs. Too many physicians want to donate for a new campus building to be named after them. What our profession really needs, however, is funds to ensure that every qualified student who gets accepted to medical school can afford to attend.
2. Volunteer teach. Private practice physicians are frequently unpaid preceptors for medical students during their clinical rotations. Since retiring, my wife and I both provide many hours of pro bono classroom instruction during the OSU College of Medicine first year pulmonary module. The less medical schools have to pay for lecturers and preceptors, the less costs will have to be then passed on to students in the way of tuition fees.
3. Buy a student dinner. Many medical schools have programs for groups of students to regularly get together with attending physicians over dinner for informal mentorship. Every time you take a group of students out to dinner or have them over for dinner at your house is one less meal that they have to pay for themselves.
4. Educate your congressional representatives. The raw fact of H.R. 1 is that one-third of medical students will no longer be able to pay for medical school with traditional federal student loans. This has implications for affecting the supply and quality of physicians in the future. This will be especially true for relatively lower paying primary care physicians: family medicine, pediatrics, internal medicine, and OB-GYN. Make sure that your senators and representatives know what they just voted to do. Ideally, the federal direct unsubsidized loan borrowing limit should be raised to equal the median cost of a 4-year in-state public medical school ($286,000 in 2025). Let’s be realistic – physicians are about the least likely group to default on their student loans so at 8-9% annual interest, the federal government is not going to lose money on medical school loans in the long run.
5. Educate undergraduate advisors. Undergraduates must generally commit to a pre-med curriculum by their sophomore year in order to take the required science courses and take the Medical College Admissions Test. That decision to pursue pre-med is generally made in consultation with one of the university’s advisors, often a dedicated pre-med advisor. These advisors need to be educated about the cost of medical school but also about options for paying for medical school so that the potential great doctors of tomorrow are not dissuaded from applying.

The biggest danger…

The 2025 H.R. 1 budget bill will make it harder to pay for medical school. The biggest danger is not that doctors will not be able to find other ways to finance their education or be able to pay back their loans. Instead, the biggest danger is that promising medical school applicants will decide that attending medical school is just not worth the cost.

July 11, 2025