The threat of strict new caps on federal student loans is causing would-be physician assistants to reconsider training, groups representing physician assistants have said. An overhaul of the federal student loan system, scheduled to take effect on 1 July, would cap the annual amount of federal loans physician assistants can borrow at $20,500 per year – less than half the median annual cost of a physician assistant (PA) program.
New Loan Caps Take Effect Amid Legal Challenges
Beginning 1 July, the Republican-led One Big Beautiful Bill Act (OBBBA) will end the Grad Plus federal loan program, cap federal graduate loans at $20,000 per year, and cap loans for professional education at $50,000 per year. The Department of Education (DOE) has deemed most PA programs as "graduate" rather than "professional," subjecting them to the lower cap. A district court judge in Washington DC granted groups representing physician assistants a preliminary injunction on Thursday. The lawsuit is one of at least three legal challenges to the rules currently winding through the court system.
At issue is the definition of "professional": the groups argue that PA programs meet criteria set by the OBBBA to be considered professional and thus should be subject to the higher loan cap of $50,000 per year. The American Academy of Physician Associates (AAPA) and the PA Education Association (PAEA) are among the plaintiffs seeking an immediate injunction.
High Costs of PA Training vs. Loan Limits
Today, the median cost of physician assistant training is $103,000 for up to 27 months of training, according to Sara Fletcher, executive director of the PAEA, which represents institutions that train physician assistants. In one example, the State University of New York (SUNY) Downstate charges more than $58,000 for training for in-state students and $113,000 for out-of-state students. Physician assistants typically also rely on student loans for living expenses, since training often requires 60-80 hours of work per week.
“My credit score was a 400,” said Todd Pickard, president of the AAPA, which represents more than 200,000 physician assistants nationally. He graduated in 1997. “There was nobody privately that was going to give me a dime. And my parents are not rich people, so they weren’t going to say, ‘Here’s $100,000 – take it.’”
Impact on Rural Healthcare Workforce
Physician assistants can prescribe medication, conduct physical exams, interpret diagnostic tests and perform some procedures. About a quarter work in rural settings, according to one study, where they tend to fill shortages in family medicine. The same law that overhauled federal student loans – OBBBA – also cut nearly $1 trillion from Medicaid, the public health insurance program for the poor, to pay for tax cuts. To offset these cuts, which were set to heavily affect rural hospitals, Republicans established the $50 billion Rural Health Transformation Program. The program relies, in part, on allowing physician assistants, nurse practitioners, pharmacists and dental hygienists to expand their scope of duties to bolster the rural healthcare workforce.
Ten Republican-led states, from Alabama to South Dakota, now employ more physician assistants than doctors, according to Becker’s Hospital Review. Even Donald Trump’s government "doctor" is a physician assistant: Col James Jones, the first PA to fill the role.
Contradictory Policies and Unanswered Questions
“On the one hand, you have the Trump administration saying we need more PAs and we need them to be doing good work and the work that they can,” said Pickard. “But then on the other hand, the DOE says, ‘Well, we don’t want to invest in the full cost of PAs.’ Those two things don’t jibe.”
Changes instituted by the Department of Education implicate a long-time debate in higher education: do federal loans make tuition more expensive, or does the government forge a path for poor students by offering subsidized loans? Department of Education Secretary Linda McMahon has argued before Congress that capping student loans will bring down tuition costs, but critics see little evidence prices will come down enough to match the strict new caps.
“Tuition costs are set by institutions,” said Fletcher. “It’s a bigger system issue than just a PA program.”
Students Forced to Seek Private Loans
For students, a strict cap on federal student loans means they will have to seek aid elsewhere, namely from private lenders and banks. This is effectively a return to a system Congress ended in 2006 over affordability concerns, according to Inside Higher Ed. Federal graduate and professional loans have an average interest rate of around 8%; private loans can range from about 3% up to 17.95%, according to the Education Data Initiative. In contrast to federal loans, private lenders require extensive underwriting, making it much more difficult and expensive for borrowers with low credit ratings – people like Pickard.
Asked whether Pickard had a chance to sit down with anyone from the administration, he said no, but not for lack of trying. He is pitching Fox News and Newsmax for a segment on the changes: “I’d love to sit down and talk to Donald Trump.”
