Reforms to the federal student-loan landscape—passed as part of the One Big Beautiful Bill Act and taking effect July 1—have ushered in changes that could reshape (PDF) how medical students borrow, repay and plan for the cost of their education.
A recent webinar hosted by AMA partner KeyBank aimed to help students translate those policy changes into effective decisions about borrowing, repayment and financial planning based on their own situations.
“This is a very complicated topic with a lot of different avenues, especially as it pertains to people working in the medical field,” said webinar host Joseph McGrath, a relationship manager at KeyBank Student Loan Solutions. “A lot of programs are changing. Certain repayment options that were available at some points are no longer available or are being tweaked in some way.”
How can medical students make smart, confident borrowing decisions in light of the recent changes? Expert insight during the webinar shed light on that question.
The impact of borrowing caps
Perhaps the most consequential change to federal borrowing and repayment is the introduction of stricter annual and aggregate federal borrowing caps for students pursuing advanced degrees. Under the new borrowing caps, medical students would qualify as professional students who may borrow up to $50,000 per year, with a total cap of $200,000. Learn more about key provisions of the One Big Beautiful Bill Act and AMA advocacy with Congress and the Trump administration.
The KeyBank webinar also highlighted that the planned phase out of the Direct Grad Plus loan program—a borrowing option that many medical students have historically used to cover costs beyond standard unsubsidized federal loan limits—and changes to the Parent Plus loans that limit flexibility in repayment further complicate the equation.
What changes mean for current students
For many medical students who are already enrolled and who borrowed before July 1, 2026, changes to federal borrowing limits may not affect them until the 2029–2030 academic year. However, students who first borrow on or after July 1, 2026, will be subject to the new limits earlier.
Students who had qualifying Federal Direct Loans made or disbursed before July 1, 2026, while enrolled in a credentialed program, may continue borrowing under prior rules for up to three academic years or the remainder of their expected time to credential, whichever is less.
“If you have four or more years left in your schooling, you will have to take these changes into account,” he said.
Bridging the gap
For medical students who do not qualify for the transition period—or whose transition period expires before graduation—the new federal borrowing caps could pose a significant challenge. The full cost of attendance—including tuition, fees and living expenses—can easily exceed those limits over the course of training.
Private student loans offer an avenue through which medical students can close the funding gap. While they often allow students more flexible, customizable terms, private loans do not qualify for loan forgiveness.
KeyBank is one of the nation’s largest full-service banks, offering banking, lending and student loan solutions for physicians at every stage of their careers. For medical students to better understand their loan options, AMA members get a free, 30-minute consultation with a student-loan expert.
“It's one thing to talk about all of these different options and avenues at a high level,” McGrath said. It’s a completely different conversation to actually sit down with someone and have those questions answered for you and have a game plan form that makes sense for your specific student loan situation.”
