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Latest update made on May 23, 2025
The federal student loan landscape is undergoing significant transformations in 2025 with changes and proposals that directly affect doctors, especially those involved in public service.
Below we take a look at proposed and actual changes and how they may impact doctors and doctors-in-training. This article will be updated regularly as changes or new proposals are made.
By proactively engaging with these updates, doctors can better navigate the evolving federal student loan environment and make informed decisions about their loan repayment strategies.
May 23, 2025
House Budget Bill Passes, Proposes Major Repayment Changes
The U.S. House of Representatives passed a budget bill this week that, if approved by the Senate, would overhaul how graduate and professional students—especially doctors—finance their education.
One of the most significant proposals is the elimination of the federal Grad PLUS loan program. This program currently allows students to borrow up to the full cost of attendance, helping cover gaps left by unsubsidized loans. Under the bill, new borrowers would lose access to Grad PLUS starting in the 2026–2027 academic year, with existing borrowers impacted beginning in 2029–2030.
Additionally, the bill sets lifetime federal loan borrowing caps: $50,000 for undergraduate students, $100,000 for graduate education, and $150,000 for programs like medicine and dentistry. With the average medical school debt exceeding $200,000, these limits would likely force future doctors to turn to private loans—often with higher interest rates and fewer borrower protections.
Another critical change would exclude time spent in medical or dental residencies from counting toward Public Service Loan Forgiveness (PSLF) for borrowers who, as of June 30, 2025, have not taken out a Grad PLUS or Federal Direct Unsubsidized Stafford Loan. If enacted, this could delay forgiveness eligibility and discourage graduates from pursuing public service careers.
These proposals could deter aspiring doctors, particularly those from underrepresented or lower-income backgrounds, and exacerbate provider shortages in underserved areas.
Takeaways: These proposals could reshape medical education financing. Doctors and trainees should follow developments and consider contacting their senators to express concerns and advocate for revisions.
May 15, 2025
Congress Proposes Lowering Federal Loan Limits & Excluding Residency From PSLF
Congress is weighing a new bill that could significantly alter how medical, dental, and veterinary students finance their education. One key proposal would cap federal student loans at $150,000 for professional degree programs—well below the average debt for medical, dental, and veterinary school alone, which typically exceeds $200,000. This would likely push many students to rely on private loans, which often carry higher interest rates and fewer borrower protections.
Another major change targets the Public Service Loan Forgiveness (PSLF) program. Currently, residency years count toward the 10-year forgiveness timeline for eligible professionals working in nonprofit or public sectors. The proposed bill would eliminate this benefit for loans issued after July 1, 2026, meaning doctors in training may have to spend additional years repaying their debt before qualifying for forgiveness.
Leading medical organizations, including the AAMC and CMA, warn these changes could discourage students—especially those from underrepresented or lower-income backgrounds—from entering medicine and worsen provider shortages in underserved areas. The bill is still in committee and has not yet passed the Senate, but it’s essential for trainees and professionals to stay informed and advocate for their interests.
Takeaways: Stay engaged and consider contacting your representatives.
May 5, 2025
Student Loan Debt Collection Restarts
The U.S. Department of Education has resumed collections on defaulted federal student loans, ending a pause that began in March 2020 due to the COVID-19 pandemic. This resumption allows the government to initiate involuntary collection actions such as wage garnishments, tax refund seizures, and Social Security benefit offsets for borrowers in default.
The end of the 12-month grace period, which concluded on May 5, 2025, means that borrowers who have not addressed their defaulted loans may now face these collection activities. Approximately 5 million borrowers are currently in default, and an additional 4 million are in late-stage delinquency (91–180 days past due), putting nearly 9 million borrowers at risk of aggressive collection measures.
For doctors, particularly those in training or early in their careers, the resumption of collections can be stressful. This financial strain can impact their ability to focus on patient care, secure credit, or even maintain professional licenses in certain states.
Takeaways: Doctors with defaulted loans should proactively engage with loan servicers to explore available repayment options and avoid further financial hardship.
April 3, 2025
Proposed PSLF Eligibility Restrictions
The Trump administration took a key step toward narrowing the definition of “public service” in PSLF to exclude organizations engaged in activities deemed “illegal” or “harmful” to national interests. According to Forbes, this includes entities involved in facilitating the violation of federal immigration laws, advocating for or providing gender affirming healthcare for transgender youth, or engaging in “illegal discrimination,” which may be a reference to DEI initiatives.
Takeaways: Doctors employed by organizations involved in such activities may find their eligibility for PSLF compromised.
March 26, 2025
IDR Applications Available Now
In March 2025, IDR applications were temporarily unavailable. As of April 9, 2025, applications for the Income-Based Repayment (IBR), Pay As You Earn (PAYE), Income-Contingent Repayment (ICR) plans, and loan consolidation are available again. Processing of these applications is still paused.
Takeaways: IDR and consolidation applications are available again, but processing is still paused. You can apply now but expect delays.
March 26, 2025
IDR & PSLF Forgiveness Paused
Loan forgiveness is currently paused for Department of Education-created IDR plans, including SAVE, PAYE, and ICR, due to ongoing litigation. Borrowers who reach forgiveness milestones will be placed in forbearance if they aren’t already.
However, forgiveness under the congressionally enacted IBR Plan is still being processed. Payments made under SAVE, PAYE, or ICR can count toward IBR forgiveness if the borrower switches to the IBR Plan.
Takeaways: Forgiveness is paused for SAVE, PAYE, and ICR plans due to litigation, but IBR forgiveness is still being processed. You can switch to IBR to have previous payments under other plans count toward forgiveness.
March 17, 2025
IDR Recertification Dates
Because IDR applications were temporarily unavailable, some borrowers were impacted due to their recertification deadlines.
- If your recertification date was on or before March 17, 2025, you were due to recertify by Feb. 20, 2025:
- If you submitted by Feb. 20, 2025 and your servicer processed it: no action needed.
- If you submitted by Feb. 20, 2025 but it wasn’t processed: your recertification date is extended by one year—no need to resubmit.
- If you did not submit by Feb. 20, 2025: your payment was temporarily recalculated (not based on income). You must submit a new IDR application ASAP.
- If your recertification date was on or after March 18, 2025, you were due to recertify on or after Feb. 21, 2025:
- Your recertification date has been extended by one year—no action needed.
- Some borrowers were incorrectly moved to non-income-based payments; servicers are fixing this.
- If your recertification date is on or after Feb. 1, 2026:
- Your deadline remains unchanged—you must recertify by that date.
Takeaways: Check your recertification date by logging into your loan account.
February 18, 2025
SAVE Plan Injunction
On February 18, 2025, a federal court issued a new injunction preventing the implementation of the Saving on a Valuable Education (SAVE) plan. The SAVE plan could have helped doctors-in-training reduce their monthly payments while working toward PSLF. It isn’t likely that the SAVE plan will be implemented in the future.
If you are enrolled in the SAVE plan, you are in general forbearance until servicers are able to accurately calculate monthly payment amounts of the court reaches a decision on the injunction. General forbearance means you don’t have to make monthly payments and interest is not accruing. Your time in general forbearance will not count for PSLF or IDR forgiveness.
Takeaways: A court blocked the SAVE plan in February 2025, and it likely won’t move forward. If you’re enrolled in SAVE, you have been moved to forbearance with no payments or interest, but this time doesn’t count toward forgiveness.
