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Breaking Down Federal Aid Implications

Ensuring we understand what is a head of us is key! Effective July 1, 2026 there will be a significant overhaul of the federal student loan system. The new law imposes strict borrowing caps, eliminates many repayment plans, and redefines institutional eligibility for student loan access. These provisions will alter how students finance their advanced degrees in the clinical health professions.

What Is Changing?

Federal borrowing will be capped

Starting with new borrowers after July 1, 2026: Degree programs have been designated as "Professional" or "Non-Professional" there is ongoing litigation of what degree types are considered. As of June 30th, 2026, this list notes degree program's designations. There is a possibility program designations may change (source here).

  • Professional Degree Federal Aid Loan Caps (i.e. Medicine, Dental):

    • Up to ~$50,000 per year
    • Up to ~$200,000 total

  • Non-Professional Degree Federal Aid Loan Caps (i.e. Healthcare Administration,  Psychology):

    • Up to ~$20,500 per year
    • Up to ~$100,000 total

Graduate PLUS loans are being eliminated

  • Previously: Students could borrow up to the full cost of attendance (COA) using Grad PLUS loans
  • Now: That additional borrowing option is no longer available for new borrowers

New lifetime borrowing limits

  • Total federal borrowing across all degrees may be capped around $257,500 / $157,500 depending on professional program attending
  • This includes: Undergraduate loans, Post-bacc or master’s loans, Medical or professional school loans
  

What Does This Mean for Pre-Health Students?

Federal loans may not fully cover medical school /professional school costs

  • Medical school often costs $300K–$400K total Federal borrowing may cover only part of that
  • With the average cost of professional schools exceed the federal borrowing maximum, students should anticipate $50K-$100K+ per year not covered by federal loans (depending on program type and cost) 
  • Students will likely need: Institutional aid, Scholarships, Personal or family support, Other financing strategies (private loans) etc.

Your Early Decisions Now Matter More

  • How and if you fund Post-bacc programs, Master’s degrees, Gap years directly affects how much you can borrow later.
  • Understand Your Credit / Personal Financial Picture! With the likely gap in funding of what federal aid can provide, and cover the total cost of professional school, private loans are a new reality for students. Reduce or eliminating credit card debt,  talk opening to friends and family about their support or ability to co-sign a future loan. Ensuring you are in a position where you qualify for private loans is top priority and it starts with understanding your credit score, how to build good credit, and staying financially healthy.  
    • Northwestern Financial Wellness has great resources on understanding this!
    • Per federal regulations, you can obtain a free copy of your credit report from each agency once every 12 months, available at www.annualcreditreport.com. 
 

Citizenship

  • Citizenship has and continues to be a significant factor in aid availability
  • Most federal sources of aid (and a significant portion of school-funded aid) are available only to U.S. citizens, nationals, permanent residents, and some eligible non-citizens
  • If you are an ineligible non-citizen you should begin considering your financial options early in your college years. Investigate your potential schools’ that accept non-citizens, and review financial aid policies on assistance
  • A few sources for scholarship and financial assistance for non-US citizens:
  

Resources & Information For Specific Health Fields

Applicable for All Pre-Health Paths

Medicine

Physician Assistant

Pharmacy

Veterinary Medicine

While you may not be able to rely on federal loans alone, with planning, multiple funding sources, and informed decisions, your health professions education is still within reach!