New Graduate Student Loan Caps May Worsen Nursing and APRN Shortages

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Updated 7/29/25

H.R.1, titled "One Big Beautiful Bill Act" (OBBBA), was signed by President Trump on July 4, 2025. The legislation brings major changes to federal student aid for graduate nursing education. The final law imposes a hard cap of $20,500 per year in unsubsidized graduate federal loans and a total limit of $100,000 including undergraduate loans, while phasing out Grad PLUS loans for new borrowers starting in the 2026-2027 school year. This is a reduction from the previously proposed $150,000 cap mentioned in earlier drafts. These limits will affect nurses pursuing Advanced Practice Registered Nurse (APRN) roles—such as nurse practitioners—whose master's and doctoral education frequently exceeds these new caps.

Key Legislative Changes for Nurses

• Elimination of Grad PLUS Loans: Graduate students will soon no longer be able to borrow up to the full cost of attendance, which is likely to push many to seek private loans with higher interest rates and fewer protections.
• Semester and Lifetime Federal Loan Limits: The $20,500/year and $100,000 total caps apply regardless of actual cost of programs, which is well below tuition and living expenses at many nursing schools and for most APRN pathway programs.
• More Limited Loan Forgiveness: The Public Service Loan Forgiveness (PSLF) program is further restricted, making it harder for nurses in public or rural service roles to clear their student debt.
• Repayment Plan Changes: Income-Driven Repayment plans are being overhauled—most will be eliminated, with forgiveness only after 30 years (up from the current 20-25 years).

Potential Impact on the Nursing and APRN Shortage

• Workforce Pipeline Weakened: These loan restrictions are widely expected to shrink the pipeline of new nurse practitioners, nurse educators, and other APRNs, as fewer nurses can afford necessary graduate education. Even though nursing school enrollments recently increased after a period of declines, many qualified applicants were still turned away due to ongoing faculty shortages and limited clinical placement sites. Rising borrowing costs could reverse this recent positive trend, and discourage some prospective nursing students from furthering their education.
• APRNs Fill Critical Gaps: Nurse practitioners are key providers of primary care, especially in underserved areas. Fewer APRNs due to financial barriers will worsen existing care shortages and healthcare disparities.
• Nursing Educator Shortage Worsening: The faculty shortage is a root cause of the overall nurse shortage. Higher education costs, combined with limited loan forgiveness and higher debt burdens, may further discourage nurses from entering or remaining in academia.
• Overall Nursing Shortage Will Continue: The U.S. is expected to fall short by tens of thousands of RNs and APRNs through 2035, partly due to pipeline constraints which will be exacerbated by these legislative changes.

While the stated legislative intent is to curb college costs and federal outlays, major nursing and healthcare organizations warn these changes will likely result in fewer new nurses and APRNs, thus worsening the workforce shortage just as demand is reaching historic highs.

Original Article

The House of Representatives recently passed the One Big Beautiful Bill Act (OBBBA), a sweeping piece of legislation that, among other things, proposes major changes to federal student loan programs—including those affecting medical students. While the bill still awaits Senate consideration, its current form has already sparked strong reactions from both supporters and critics in the healthcare and education communities.

Proposed Changes to Medical Student Loans

• Elimination of Grad PLUS Loans: The bill proposes to end the Grad PLUS loan program for graduate students, including those in medical schools. This program currently allows students to borrow up to the full cost of tuition and living expenses. Under the bill, new borrowers would be barred from accessing Grad PLUS starting in the 2026-2027 academic year, though existing borrowers could continue through the 2029-2030 school year.
• Caps on Federal Loans: Federal loans for graduate and professional students would be capped at $150,000. This is a significant reduction, as many medical programs cost more than this limit, especially when factoring in living expenses.
• Restructuring Repayment Plans: The bill would eliminate most current repayment options, including the Biden-era SAVE plan and other income-driven repayment (IDR) plans. Borrowers would be left with two choices: a Standard Repayment Plan with fixed monthly payments, or a new Repayment Assistance Plan (RAP) based on income. The RAP would require payments ranging from $120 per year for those earning under $10,000 to 10% of gross income for higher earners, with forgiveness after 30 years—longer than the current 20- or 25-year forgiveness timelines.
• Public Service Loan Forgiveness (PSLF): The bill introduces new restrictions on PSLF, which is a critical program for many healthcare professionals working in underserved areas. Critics warn that these changes could make it harder for nurses and doctors to qualify for loan forgiveness after working in public service roles.
• Deferment and Forbearance Limits: For loans taken out after July 2025, the ability to defer payments due to unemployment or financial hardship would be revoked, and forbearance would be capped at nine months within a 24-month period.

Support and Opposition to the OBBBA

• Supporters of the OBBBA:
  • The House Education and Workforce Committee and conservative policy groups argue that these reforms are necessary to reduce federal spending and bring accountability to higher education. The Wall Street Journal Editorial Board stated that the goal is to “hold colleges accountable for student outcomes and curb the open-ended loan buffet.”
  • Lindsey Burke, Director at the Heritage Foundation, praised the repeal of PSLF and PLUS Loans, saying, "Repealing the Public Service Loan Forgiveness program and ending PLUS Loans reduce unnecessary federal involvement in higher education that only encourage higher tuition and more student debt."
• Opponents of the OBBBA:
  • The Student Borrower Protection Center (SBPC) warns that the bill would disqualify borrowers currently receiving Pell Grants, push more borrowers towards private loans due to new federal restrictions, and raise monthly payments for individuals repaying their loans.
  • The American Academy of Family Physicians (AAFP) Board Chair Steve Furr, MD, FAAFP, expressed concerns about the impact on future doctors and nurses: "Educational debt directly influences medical student choices about specialty and location of practice. ... Preserving and strengthening avenues for loan repayment such as PSLF could give family physicians who want to practice in rural areas greater financial freedom to start businesses, employ others, and provide invaluable health care and economic activity in their communities.”
  • Teaching hospitals and medical educators have also raised concerns, arguing that the $150,000 cap and elimination of Grad PLUS loans could worsen healthcare worker shortages by making it financially impossible for many students to attend medical or nursing school.

What This Means for Medical Students

If enacted, these changes could:

• Make it harder for medical students to finance their education, especially at higher-cost institutions.
• Force more students to turn to private loans, which typically have higher interest rates and fewer protections than federal loans.
• Increase the financial burden on new graduates, as repayment options become more limited and monthly payments could rise.
• Potentially reduce the number of new medical students entering the workforce, particularly in underserved areas, due to increased debt and fewer forgiveness options.

The bill's future remains uncertain as it heads to the Senate, where amendments are possible. Medical professionals should monitor these developments closely, as the outcome could have a lasting impact on their financial futures and the broader healthcare workforce.

Nurse.org will continue updating this article as the OBBBA moves forward to the Senate.

 

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