As of July 1, 2026, Grad PLUS loans are no longer available to new borrowers, and new federal borrowing limits now apply to graduate school and professional students. For students pursuing a medical degree, the changes could significantly affect how they plan to pay for school.
Under the new rules, students in professional degree programs, including MD and DO programs, can borrow up to $50,000 per year and $200,000 total through federal Direct Loans. At the same time, new borrowers can no longer use Grad PLUS loans to borrow beyond those limits. Before July 1, 2026, eligible graduate and professional students could use Grad PLUS loans to cover the remaining cost of attendance after other financial aid.
Because the cost of medical school can exceed these federal borrowing limits, some students may need to consider other ways to cover their education and living expenses. That makes understanding the cost of medical school and how much of that cost you can realistically finance before medical residency an important part of choosing where to attend.
In this guide, I'll explain exactly what’s changed and how the new federal loan limits work. I'll also look at other financing options available to medical students, and what to consider when comparing different medical schools.
The new rules may make medical school financing more complicated, but understanding your options early can give you more time to compare costs and develop a plan for paying for them.
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Two changes to federal student loans took effect on July 1, 2026, as part of the One Big Beautiful Bill Act (OBBBA). Grad PLUS loans were eliminated for new borrowers, and new annual federal student loan limits and total limits were established for federal Direct Loans for graduate and professional students.
Under the old structure, graduate and professional students could use Grad PLUS loans to borrow additional amounts up to the school's cost of attendance, minus other financial aid. Unlike private loans, Grad PLUS program loans were federal loans with fixed rates and federal repayment options.
Grad PLUS loan program borrowers were subject to a credit check, but approval was based on whether they had an adverse credit history on a credit report rather than a minimum credit score. Students with an adverse credit history could sometimes qualify by obtaining an endorser, similar to a cosigner.
These loans also came with a loan fee, or origination fee, which reduced the amount of money disbursed to the borrower. The Grad PLUS loan program did not have a fixed annual or aggregate borrowing limit, and loans did not have a standard six-month grace period after leaving school.
Beginning July 1, 2026, the Grad PLUS loan program is no longer available to new borrowers. An exception applies to students who were already enrolled and had received a Direct Loan for their program before that date. These students can continue to borrow Grad PLUS loans under the previous rules during their expected time to credential.
The other major change is that new annual and total limits now apply to federal Direct Loan borrowing for graduate and professional students. For students in professional degree programs, including MD and DO programs, the limits are up to $50,000 per academic year and $200,000 total in federal Direct Loans.
The new rules also establish a separate $257,500 lifetime limit on repayment plans. This broader limit takes a student's previous federal borrowing into account. For prospective medical students, previous federal borrowing may reduce how much they can borrow under the new limits.
The new limits primarily affect students who begin borrowing under the new rules, which means incoming and future medical students are likely to feel the biggest impact. Students who were already enrolled and borrowing under the previous rules may qualify for exceptions during the transition period.
The rules for existing borrowers can be complicated. Students should check with their medical school's financial aid office or entrance counseling to confirm how the changes apply to them.
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For many medical students, the new federal loan limits could leave a gap between what they can borrow and the full cost of attendance. Many medical schools in the U.S., including those considered less competitive, charge more than $50,000 per year in tuition costs alone. That’s before housing, fees, insurance, books, transportation, and other expenses come into play.
For example, if a medical student's annual cost of attendance is $75,000 and they can borrow up to $50,000 in federal loans, that $25,000 gap would need to be covered in other ways. Over four years, the total cost of medical school could also exceed the new $200,000 professional borrowing limit.
For students facing a funding gap, understanding the school's total cost of applying and attendance, plus available financial aid, is essential before enrolling.
If federal loans don't cover the full cost of medical school, students may need to combine several sources of funding. Options can include:
For some students, the new borrowing limits may make the overall cost of a medical school an even more important factor in deciding where to enroll. Tuition-free, lower-cost medical schools, or schools with accelerated or special programs may also be worth considering.
Even if you expect to pay for part of medical school through scholarships, savings, public service loan forgiveness, or other resources, complete the Free Application for Federal Student Aid (FAFSA) form to review your federal aid eligibility.
The U.S. Department of Education uses information from the FAFSA to determine eligibility for federal financial assistance and available repayment programs. Understanding what you qualify for can help you estimate your potential funding gap.
The new federal loan limits make it even more important to think about the total cost of medical school before you apply. Start financial planning early, research each school's financial aid opportunities, and estimate how much you may need to fund beyond federal loans.
As you build your medical school list, consider both the total cost of attendance and the financial aid available at each school. You may also want to speak with financial aid offices about your individual eligibility and how the new borrowing limits could affect you.
Before enrolling, look beyond base tuition and consider the full financial picture. I’d suggest asking the following:
Comparing the total cost of attending each school can help you make a more informed decision. Research each school's scholarships and financial aid opportunities while you're building your medical school list, rather than waiting until you've been accepted to consider the cost.
Medical school is still possible under the new federal loan system, but the elimination of graduate PLUS loans means financing your education may require more planning than it used to. With federal borrowing limits in place, too, understanding the true cost of medical school and how you'll cover it becomes an even more important piece of your decision process.
For aspiring medical students, financial planning should start well before you receive an acceptance letter. Considering affordability and funding sources as you build your school list, researching financial aid opportunities, and understanding potential funding gaps can help you make informed decisions about where and how to attend medical school.
Becoming a doctor is already a long and demanding journey. Getting the right guidance early can help you make smarter decisions about your medical school path, from choosing schools to planning how you'll pay for them.
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