Republicans Cap Student Loan Debt. Why That’s Bad News For California Medical Students

July 23, 2025

The new tax bill approved by Congress caps federal student loan borrowing for medical students at $50,000 annually and $257,000 total, eliminating the previously unlimited Grad PLUS loans starting in 2026. This change will force many medical students to seek private loans, which lack the protections and forgiveness options of federal loans, particularly impacting those pursuing careers in nonprofit settings. Medical education typically costs over $300,000, meaning students will face significant funding gaps under the new rules.

Who is affected

Medical school students, particularly those from low-income backgrounds
Potential future doctors who may be deterred from entering medicine
Patients, especially those in underserved areas who may face reduced access to doctors
Primary care physicians and family medicine practitioners
The University of California system's medical students (approximately 800 medical degree graduates annually)
Underserved areas facing physician shortages, including Central Coast, Central Valley and Southern Border regions of California

What action is being taken

L.A. Care Health Plan is investing $255 million in scholarships and loan repayment to recruit physicians to underserved areas
The University of California is working with private lenders to develop financial products more accessible to students with less-than-perfect credit
UC is providing grants averaging $32,000 to nearly 3,000 medical students
UC is issuing its own loans, though in small numbers
Medical students are taking gap years to save money before entering medical school

Why it matters

The projected national shortage of 86,000 physicians by 2036 could worsen
Diversity in the medical profession may decrease if lower-income students cannot afford medical education
Without federal loan forgiveness options, fewer doctors may choose to work in nonprofit settings that serve poor communities
Private loans typically require cosigners and may charge higher interest rates based on financial history
Patient outcomes could suffer without doctors who understand their backgrounds and communities
The new rules represent a $300 billion savings in the tax bill, while adding $3 trillion to the national debt

What's next

No explicit next steps stated in the article

Read full article from source: The San Diego Voice & Viewpoint