Federal Student Loan Limit Changes
Upcoming student aid changes will impact how much you can borrow in federal student loans for medical school. Beginning July 1, 2026, Federal Direct Unsubsidized Loans will be capped at $50,000 annually and $200,000 total, and the Federal Grad PLUS Program will no longer be available. Currently, medical students can annually borrow up to their school’s full cost of attendance through Grad PLUS, which has helped limit the need for private student loans. The new caps and sunsetting of the Grad PLUS Program mean that some students may need to explore credit-based private loans to cover any remaining costs beyond the new annual federal loan limit.
For students who are already enrolled in medical school and have taken out a Federal Direct Loan prior to July 1,2026, there are exceptions to the new policies to help minimize impacts on existing borrowers. These continuing medical students will be able to borrow through the Grad PLUS Program and under earlier federal unsubsidized loan limits –either until graduation or for up to three academic years, whichever comes first if certain conditions are met.
Streamlined Student Loan Repayment Options
There will also be important changes to how you can repay your federal student loans. For new medical student borrowers, repayment options will be streamlined to two plans: a Tiered Standard Plan and Repayment Assistance Plan (RAP). The Tiered Standard offers fixed repayment terms between 10 and 25 years, depending on how much you borrow – loans of $100,000 or more will be repaid over a 25-year term.
RAP will serve as the only income-driven repayment plan option going forward, with up to a 30-year repayment term for medical school borrowers. This plan includes features to help prevent interest from growing over the life of the loan, such as unpaid interest relief and a $50 monthly principal reduction when payments don’t fully cover interest. This will also be the only plan eligible for Public Service Loan Forgiveness (PSLF) for new borrowers. This RAP plan appears to offer good flexibility for medical student borrowers to manage their federal loans during residency and after. While the concept of repaying $200,000 of federal loans after medical school may seem daunting, the RAP plan will have monthly payments that meet medical student borrowers where they are, no matter their career path.
Planning Ahead: Understanding Credit and Private Student Loans
As credit based private student loans may become part of how some students finance medical school, it will be increasingly important to understand key credit concepts – especially if you plan to borrow beyond the new federal loan limits. The AAMC’s Financial Information, Resources, Services & Tools (FIRST) Program has resources like Credit 101 and Tips for Establishing & Improving Your Credit to help you build knowledge in this area.
It is also important to understand the differences between federal and private loans. In today’s evolving student aid landscape, students may use a combination of both federal and private loans to fully finance their medical education. The financial aid office at your medical school will be a helpful partner in developing your medical school financing plan. For example, they may be able to identify grants and scholarships, such as those mentioned below that might be a good choice for some medical students.
In general, it’s recommended to exhaust federal loan options first before exploring private loans, since federal loans offer benefits like income-driven repayment and eligibility for PSLF. The article, Federal vs. Private Education Loans discusses the differences between loan types so you can begin to understand the differences in these medical school financing options.
Federal Service Loan Repayment and Scholarship Opportunities
There are several ways to fund your medical education, and there are various programs available to help you repay your student loans.
Opportunities for scholarships and repayment and/or loan forgiveness may be found through service programs such as the National Health Service Corps, National Institutes of Health, and the U.S. Department of Health and Human Services, as well as military programs and the Department of Veterans Affairs. These programs may provide scholarships or repayment assistance in exchange for a service commitment.
The AAMC also has a free, searchable database of state and federal scholarship and loan forgiveness programs for students interest in these options.
Stay Informed and Connect with the Medical School Financial Aid Office
With these upcoming changes to student aid, it’s more important than ever to research the cost of attending the medical schools you are considering. Please review these medical school’s financial aid websites for specific information about costs and financing options.
A medical school’s financial aid office is a valuable resource, as they can help you understand the full cost of attendance and guide you in planning how to pay for your education. Your prehealth advisor is also a great resource to help you navigate options for how to pay for medical school.