Abstract: This article guides students and advisors in understanding the impact of the HR1/One Big Beautiful Bill (OBBB) on funding for health professions education. It explains how, beginning July 1, 2026, federal borrowing limits for graduate and professional students will become stricter, with the elimination of Grad PLUS loans and the introduction of lower annual and lifetime caps. Based on follow-up rules negotiation meetings in fall 2025, the summary clarifies which “professional” programs qualify for higher borrowing limits. It highlights the new repayment options that replace existing income-driven plans. Students and advisors can use this information to anticipate changes to financial aid options, assess potential funding gaps, and plan early for alternative financing, such as private loans. The article also encourages all applicants to seek advice from certified financial professionals to make informed decisions specific to their circumstances. Ultimately, readers should consider the impact of new regulations, prepare for changes to financial aid, and proactively secure the resources needed to pursue health professions careers.
The biggest story affecting the Student Doctor Network community in 2025 has been the disruption of financial aid and loan repayment for aspiring health professionals.
Since the HR1/One Big Beautiful Bill was signed into law on July 4, 2025, many health professions organizations and programs have scrambled to understand the impact the changes in higher education financing will have on their ability to secure adequate funding to cover the cost of education for incoming health professions students, beginning on July 1, 2026. Many anticipate that the bill will make it more difficult for lower-income students to pursue higher education, with significant customer protections being rolled back (Raising the Cost of Borrowing, Reducing Access: How the One Big Beautiful Bill Reshapes Financial Aid and Repayment – EdTrust).
We summarize how health professions associations are navigating new regulations and ways to help incoming 2026 student classes cover their education costs. We highly encourage readers to seek professional advice from certified financial experts to better understand how the OBBB loan changes may affect one’s education and career opportunities.
Key Changes Affecting Health Professions Students
The core of the impact stems from two changes set to take effect on July 1, 2026:
- Elimination of Grad Plus Loans: The Grad Plus student loan program, which previously allowed graduate students to borrow up to the full cost of attendance (including tuition, housing, and other expenses), will be discontinued for new borrowers.
- New Loan Limits and Classifications: The law introduces distinct annual and lifetime caps based on degree classification:
- Professional Students: Eligible for $50,000 annually and an aggregate maximum of $200,000.
- Graduate Students (Non-Professional): Capped at $20,500 annually and $100,000 overall.
These limits all fall under a universal lifetime cap of $257,500 for all federal student loans (undergraduate + graduate/professional combined).
Expanding the Definition of “Health Professional”
Officials in the Department of Education convened the Reimagining and Improving Student Education (RISE) Committee to establish rules to implement OBBB. In sessions of negotiated rulemaking in fall 2025 (RISE Negotiated Rulemaking 2025), the committee reached consensus on new loan limits and definitions of “professional students” eligible for the higher loan limits.
The committee agreed to expand the classification of eligible professional programs from 10 to 44. Doctorates in clinical, school, or counseling psychology are now included in the revised definition. The Committee estimates that the new definition will cover more than 440,000 students in over 2000 educational programs. However, many other master’s-level health professions programs would still be subject to the lower borrowing limit.
The Committee also agreed that existing borrowers could continue their current financial aid plans under the previous borrowing structure, including GradPLUS. Consequently, the new regulations generally apply to those beginning their education on July 1.
Many express concern about the transition and implementation of the new regulations amid workforce shortages in the Department of Education. Higher education administrators still feel the pain from the flawed launch of FAFSA, and most are concerned that the technical infrastructure will not be ready when the new regulations go into effect.
Restructured Loan Repayment Program Options
The RISE Committee agreed to eliminate existing income-driven repayment (IDR) programs, such as Income-Contingent Repayment, Pay As You Earn, or Saving on a Valuable Education/REPAYE, after July 1, 2026. Only the Income-Based Repayment (IBR) plan will remain; for new borrowers, payments are based on 15% of one’s discretionary income. Two new repayment plans are created for new borrowers who are not eligible for IBR: the Tiered Standard Repayment Plan and the Repayment Assistance Plan (RAP).
RAP will calculate payments based on the borrower’s adjusted gross income (AGI), with a minimum of $120 (for AGI under $10,000) and a maximum of 10% of AGI (for those with AGI above $100,000). A $10 minimum monthly payment is required, though the plan allows a $50 deduction per dependent per month.
The government will waive the unpaid accrued interest not covered by the monthly payment, offering a $50 monthly subsidy to ensure the loan balance decreases each month.
RAP loan forgiveness is available to those who pay for 30 years (360 monthly payments), with the forgiven balance being taxable.
Takeaways for Students Applying to Health Professions Graduate Programs
The OBBBA introduces significant structural changes to federal student loan programs, notably eliminating Grad PLUS loans and instituting new loan caps for new borrowers starting July 1, 2026. The categorization of a program as “professional” or “graduate” determines the federal loan limits.
| Program Type | Federal Loan Limits (New Borrowers, post-July 1, 2026) | Effect on Ability to Secure Loans and Pay Back Debts |
| Designated Professional Programs Includes Medicine (MD/DO), Dentistry (DDS/DMD), Veterinary Medicine (DVM), Law, Pharmacy (PharmD), Optometry (OD), Podiatry (DPM), and Clinical Psychology | Annual Cap: $50,000 Aggregate Lifetime Cap (Grad/Professional): $200,000 Universal Lifetime Federal Cap: $257,500 (Undergraduate + Graduate/Professional) | Securing Loans: The $200,000 federal cap is often insufficient to cover the high cost of attendance (COA) of these programs, forcing students to rely on private loans to cover the difference. For instance, a medical student might face a gap of over $300,000 that must be financed privately. Repaying Debts: Private loans do not qualify for federal borrower protections like income-driven repayment (IDR) or Public Service Loan Forgiveness (PSLF). The required repayment period for those not utilizing PSLF is extended to 30 years under the new Repayment Assistance Plan (RAP). Time spent in medical and dental residencies or internships will not count toward the 10 years needed for PSLF repayment qualification. |
| Other Health Professions Graduate Programs Includes Occupational Therapy (ODT), Physical Therapy (DPT), Physician Assistant (PA) | Status Uncertain: The definition agreed upon by the Department of Education (ED) does not explicitly include ODTs, DPTs, and PAs. Annual Cap: $20,500. Aggregate Lifetime Cap (General Graduate Students): $100,000. | Securing Loans: If these programs fall under the $100,000 graduate cap, students will face a massive funding gap, as they can no longer utilize Grad PLUS loans to borrow up to the full COA. This will dramatically increase the reliance on private lending. Repaying Debts: Similar to professional students, greater reliance on private loans removes federal protections and PSLF eligibility for that portion of the debt. Furthermore, many fields requiring graduate education (such as social work, counseling, or teaching) might struggle to meet the earnings thresholds mandated by new accountability provisions, potentially leading to the loss of Title IV eligibility for those programs. |
| General Impact for All New Graduate/Professional Borrowers (Starting July 1, 2026) | Grad PLUS Loans are eliminated for new borrowers. Parent PLUS Loan caps are set at $20,000 annually, with a $65,000 aggregate limit per child. | Securing Loans: The elimination of Grad PLUS is significant because it was the “safety net option” that allowed students to borrow up to the full COA. Students must anticipate a gap in funding. Impact on Career Changers: The universal lifetime cap of $257,500 is applied retrospectively, meaning any federal loans taken out previously (even for undergraduate or a prior graduate degree) count toward the limit, reducing the amount available for a current professional program. Repaying Debts: Existing IDR plans (ICR, SAVE/REPAYE, PAYE) are sunsetted for all borrowers after July 1, 2026. New borrowers will only have access to the Repayment Assistance Plan (RAP), which analysts project will be significantly more expensive than previous plans like SAVE. |
Considerations for Postbac Growth-Year Applicants
The categorization of postbac academic programs affects many applicants who enroll to enhance their academic readiness or conduct research. Each student must be vigilant not to exceed their lifetime federal graduate debt limit too early. The amount borrowed for postbac programs may be limited if the program is not classified as a “professional” program (one that requires completing academic requirements to attain a professional skill beyond that usually required for a bachelor’s degree and generally requires licensure to begin practice). Such programs are eligible as “professional” if they are associated with a qualifying Classification of Instructional Purpose (CIP) code. Postbac program advisors should lean on financial aid experts and counselors to address questions from enrolled students.
Considerations for Dual-Degree Students
The One Big Beautiful Bill Act (OBBBA) introduces particular complexities for students pursuing dual graduate or professional degrees (e.g., DVM/PhD, MD/MBA, DDS/MPH), primarily because they are subject to the mixed loan limits and risk exceeding the overall lifetime borrowing cap sooner.
Dual degree students must determine which loan cap—the Professional limit or the Graduate limit—will apply to their overall borrowing and plan immediately for the anticipated funding gap.
Determining the Applicable Loan Cap
The proposed regulatory text specifies that if a student is enrolled in a program that awards both a graduate degree and a professional degree, the student shall be considered a professional student if more than 50% of the program’s credit hours count toward the professional degree.
Students must inquire with their institution’s financial aid office to confirm how their specific dual degree (e.g., DVM/PhD) is coded. If the combined program is structured such that more than half of the credit hours count toward the designated professional degree (like Medicine, Dentistry, or Veterinary Medicine), the student qualifies for the higher $200,000 aggregate professional cap.
The Impact of Lifetime and Aggregate Caps
Dual degree students must consider two main caps:
- Universal Lifetime Maximum: All federal student loan borrowing (including undergraduate and all graduate/professional loans) is subject to a universal lifetime maximum aggregate cap of $257,500. Students pursuing dual degrees, particularly those lasting more than four years (like DVM/PhD programs), will likely hit this lifetime cap sooner.
- Prior Borrowing Reductions: If a student already has prior graduate debt (e.g., from a master’s program) when enrolling in a professional dual degree program, that previous graduate borrowing will count against the $200,000 professional aggregate cap.
Because professional programs are expensive, dual degree students are highly likely to exceed the $200,000 professional limit due to the duration and complexity of their studies.
Facing the Funding Gap and Repayment Consequences
For a dual degree student, this means the financial strategy must be robust: the high total debt load, often required for dual degrees, combined with a non-forgivable private loan component, increases financial risk and may deter graduates from pursuing careers in public service or research, which often have lower starting salaries.
Key Takeaway: A dual degree program, especially one that includes a professional degree, is likely to be considered a “Professional Program” for caps if the professional component accounts for more than 50% of the credits. However, this may leave a massive funding gap that must be filled by private loans, forcing students to confront a substantial debt burden ineligible for federal loan benefits.
How These Changes May Affect the Healthcare Workforce
The long-term effects of the changes introduced by the One Big Beautiful Bill Act (OBBBA) on the healthcare workforce are anticipated to be significant, primarily by restricting access to graduate and professional health programs for specific student demographics, which could worsen existing workforce shortages in high-need fields.
The core issue lies in the new federal loan caps and the elimination of the Grad PLUS program, which shifts a substantial portion of financing into the private lending market.
Reduced Access for Low-Income and First-Generation Students
The most significant anticipated impact is the restriction of access to expensive health professions programs.
- Financial Barrier: The new loan caps—$200,000 aggregate for designated “Professional Programs” (Medicine, Dentistry, Veterinary Medicine) and $100,000 for “Graduate Programs” (which may include Occupational Therapists, Physical Therapists, and others)—will create a significant funding gap between the federal limits and the actual cost of attendance (COA) for many high-cost programs.
- Reliance on Private Loans: This gap must be filled by private loans or personal resources. Private loans have stricter underwriting requirements (such as high credit scores or a co-signer) compared to federal loans, which could price out first-generation or low-income students.
- Consequences of Access Restriction: Advocates argue that, because Grad PLUS loans previously “opened doors for diverse applicants,” the changes could compromise professional programs’ ability to maintain diversity and recruit students from low-income or disadvantaged backgrounds. This impact is likely to disproportionately harm low- and middle-income students and students of color.
Deterrence from Public Service and Primary Care
The shift to private borrowing reduces access to critical financial safety nets, potentially steering graduates away from public service roles.
- Ineligibility for PSLF: Private student loans are not eligible for federal loan benefits such as Income-Driven Repayment (IDR) plans or the Public Service Loan Forgiveness (PSLF) program.
- Discouraging High-Need Fields: If a large percentage of a graduate’s debt is private, they will be compelled to seek higher-paying jobs in the private sector to manage that non-forgivable debt, leading to fewer doctors and other health professionals pursuing PSLF. This could deter aspiring physicians from entering lower-paying fields, such as primary care, or from practicing in underserved areas.
- Increased Debt Burden: Graduates in fields like dentistry face average borrowing amounts far exceeding the $200,000 cap (around $312,000 aggregate debt for dental students). When private loans cover the difference, these graduates face a steep mountain to climb if they owe hundreds of thousands in private loans without access to federal IDR or PSLF.
Threat to Short-Term Value, High-Cost Graduate Fields
New accountability rules may harm some segments of the healthcare workforce. The OBBBA includes a robust accountability provision that measures programs based on graduate earnings four years after completion, compared to bachelor’s degree holders.
- Targeted Fields: This could negatively impact fields where graduate education is required for licensure (or practice) but where starting salaries are relatively low and do not immediately “pay off” the high cost of education.
- Fields like social work and counseling are among those likely to fall under the accountability threshold, as short-term earnings often lag despite requiring graduate education and providing long-term societal value. If a program fails this earnings test for two of the three years, it becomes ineligible for federal student loans for at least 2 years.
These changes are expected to increase the financial risk associated with pursuing a graduate health profession degree, thereby making the most expensive and debt-intensive programs less accessible to those without existing wealth or credit history and making public service jobs less financially feasible for new graduates.
References
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Generative AI Assistance
Generative AI tools helped with this manuscript in the following ways:
- Otter.ai transcribed recorded webinars and videos.
- NotebookLM/Google summarized findings from the documents, transcripts, and website articles.
- Perplexity/Comet formatted references to APA style and initially drafted the abstract.
- Grammarly AI assisted with editing the document for publication and search engine optimization.
The information in this manuscript is meant to inform readers and should not replace advice given by a professional financial advisor.
Correction Notice: Updated December 15, 2025 to correct Podiatry degree abbreviation (DPM) in table.
