Bill Introduced in Congress will eliminate Grad Plus loans

Pre-Med & Medical School
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https://www.congress.gov/bill/119th-congress/senate-bill/308

The Graduate Opportunity and Affordable Loans Act (currently in committee, but likely to move to the floor for a vote) will place strict limits of the amount of Direct Student loans and Grad Plus loans that graduate and professional school students may borrow.

As of June 30, 2025, the Grad Plus loan program will cease to exist.

The bill also places new lower caps on the amount of Direct Student Loans a student may borrow.

Graduate students may borrow an aggregate total of $65,000. That amount includes both undergrad and graduate loans combined.

Professional school students will have an aggregate lifetime limit of $135,000, an amount that includes both undergrad and professional school borrowing.

The bill also calls for all IHEs (Institutes of Higher Education) to set lower borrowing caps for their students.

Given that the median price (tuition, fees, insurance , learning materials/books–doesnot include housing/meals/transportation) of 4 years of med school at a public in-state is $285,000, and the median cost (tuition, fees, insurance , learning materials/books–does not include housing/meals/transportation)for 4 years at a private med schools is $391,000, med school may become prohibitively expensive for all but the wealthiest of families.

Edited to add–

MSAR Tuition, Fees and Insurance Information

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My daughter is starting grad school in the fall. If she gets her aid package, including loans before June 30, do you know if that change will affect her?

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I’m glad my daughter graduates in May and is no longer paying grad school tuition.

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I don’t know for sure; however, it appears that if this bill passes no one will be able to take out Grad Plus loan after June 30, 2025.

So if she actually has signed her paperwork and the loans has been processed and deposited in her account, she’ll be able to keep it. But if she hasn’t received the $$ in hand by June 30…she won’t get it.

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This means that most graduate programs in medicine will be unavailable to all but the wealthiest individuals. Not just doctors – but most of our advanced medical practitioners – Dentists (same cost as medical school), Physical therapists, Physician assistants, Occupational Therapists (most of those schools cost $100K by the time you are done with training) — you won’t be able to pursue most of these field as a middle or lower income individual.

In a time where we need MORE medical person – and ideally a more diverse group of medical personnel - this is a big setback.

I mean don’t get me wrong - it would be great if our medical providers didn’t need to take our substantial loans -but that would require government subsidies and we certainly aren’t getting those anytime soon.

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It’s concerning.

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I agree it’s concerning.

However, if this comes to pass, I would expect some banks and other financial institutions to create a product offering for these students and types of loans. The grad plus loans thru the government have quite a high interest rate (currently 9.08%) and vig (4.228%) so I would expect banks/financial institutions can make $ at those/similar rates. Time will tell how this all plays out.

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There are already private loans for medical school.

(Cal Northstate refuses to pariticapte in the federal student loan program so its students are ONLY eligible for private loans.)

The problem with private loans is that:

  1. these loans have higher (market) interest rates than student direct loans
  2. these loans have lower caps on the amount of money they will lend to student since these are unsecured loans.
  3. some lenders require qualifying co-signers for private student loans.
  4. these loans don’t offer the special repayment plans/options that direct student loans and Grad plus loans do, like IBR, ICR and PAYE
  5. private loans are not eligible for PSLF (assuming it continues to exists) or other loan forgiveness programs
  6. private loans are not eligible for various service repayment programs like NHSC or VA HPSP or state based service repayment programs
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Following this discussion and sharing this report:

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Well - that is good to hear. But medical providers used to be able to get included in some of the federal loan forgiveness programs. Private loans won’t qualify (edited this sentence). Of course, those loan forgiveness programs are probably vanishing too -so I suppose it won’t matter the loan source.

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Two comments on the article–

The Lowering Education Costs and Debt Act introduced by Sen. Cassidy (R-LA) and others would set annual borrowing limits of at $40,500 for professional degree students and $20,500 for all other students.

These are the limits currently for student direct loans for professional schools so this much is unchanged. However, not all professional school program are eligible for the higher $40,500 lending limit. Only Medicine, Dentistry, Veterinary, Optometry, Podiatry and Naturopathic Medicine are allowed to borrow $40,500/year.

For professional or doctoral programs in pharmacy and medicine, 72 percent and 83 percent of graduates, respectively, would see their access to federal loans curtailed by these limits.

Medicine is already one of the most income segregated professions around.
25% of all med student come from families that earn more $300,000/year (top 5% earners)
More than 75% of all med students come from families in the top quintile of income

Only 5% of med students come from families earning less than $30,000/year

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