Changes to Federal Loan Program May Disrupt HBCU Medical Schools and Students

By Tiara Moultrie

Historically Black college and university (HBCUs) medical schools provide a crucial pathway to medical careers for Black students, first-generation students, and low-income students. HBCU medical schools are also distinguished by their commitment to reducing racial and socioeconomic health disparities and to providing services in low-income communities. Yet, recent changes in federal policy threaten to disrupt their contributions. New federal student loan borrowing limits may have far-reaching impacts on student access and success at HBCU medical schools. And, by creating new obstacles for HBCU students, these policies may also exacerbate shortages in the physician workforce, especially in low-income and rural communities.

The U.S. physician workforce faces several significant challenges. Demographic shifts have resulted in overall population growth as well as in a rapidly aging population: in 2020, one in six people in the United States were 65 or older.¹ Both of these conditions mean that demand for medical care is skyrocketing. But at the same time, a rapidly aging medical workforce is pushing a significant number of today’s working doctors towards retirement—while one-sixth of Americans are now seniors, nearly a quarter of U.S. physicians are 65 and older.² Without a meaningful expansion of physician training, a medical workforce shortage is all but assured.

A rapidly aging medical workforce is pushing a significant number of today’s working doctors towards retirement—while one-sixth of Americans are now seniors, nearly a quarter of U.S. physicians are 65 and older.

This unprecedented, and unmet, demand for licensed medical doctors hits some Americans much harder than others. A longstanding shortage of primary care physicians³ means many people in low-income and rural communities face limited access to long-term preventative and chronic care providers. But other populations will also suffer because of the shortage soon enough. While access to trained physicians has been an especially serious issue in some low-income and rural communities, future physician shortages could affect nearly every community, leading to longer wait times, delays in care, and inability to receive prompt referrals for specialists.

To address this problem, a number of U.S. medical colleges have set their sights on blunting the impact of the crisis at its spearhead, reaffirming their commitment to addressing the public health and primary care needs of rural⁴ and urban⁵ underserved communities.⁶ HBCU medical schools have led this charge. These institutions have strong residency placement rates in rural and underserved urban communities, and often focus on training doctors committed to working in medically underserved communities: they play a key role in both the talent pipeline and efforts to increase medical access. For example, nearly 40 percent of Meharry Medical College graduates practice in primary care⁷ and nearly 60 percent practice in a medically underserved community.⁸

At the turn of the twentieth century there were roughly a dozen HBCU medical colleges.⁹ Today there are just four HBCU medical colleges, with two additional HBCU institutions, Xavier Ochsner College of Medicine¹⁰ and Morgan State University,¹¹ working toward accreditation of their medical schools. And yet in spite of their numbers, HBCU medical colleges produce nearly half of all Black doctors.¹² These schools are a valuable resource for addressing physician shortages and improving medical access for low-income patients and Medicaid patients.¹³

More than ever, we need our medical educators to make this sort of difference; and the fact that there are so few of them—fewer than 3 percent of medical schools are HBCUs—makes the support these institutions receive exponentially more valuable. Unfortunately, HBCU medical schools and their students face new and unique funding challenges. Recent Congressional action will make it significantly harder for those looking to matriculate at these schools to finance their degrees. This report will take a look at these new limits on how much students can borrow for graduate programs, and assess the consequences for HBCUs and the communities their medical schools serve.

New Limits Mean New Financial Challenges for Medical Students

In July 2025, Congress passed HR 1 (also known as the One Big Beautiful Bill Act), which made several changes to graduate students’ borrowing options. First, the law eliminated Direct Graduate PLUS Loans.¹⁴ Prior to this legislation, almost half of all medical students used Grad PLUS loans, and medical students borrowed more than $1 billion in Grad PLUS annually.¹⁵ Second, the law created new annual and aggregate borrowing limits on Direct Loans used for graduate programs. This is a major change. Before the new legislation, students could borrow up to the full cost of attendance. But beginning on July 1, 2026, professional students¹⁶ will face a $50,000 annual loan limit and a $200,000 lifetime borrowing cap.¹⁷ The median cost of attendance for the class of 2025 was more than $280,000 for public medical schools and nearly $400,000 for private medical institutions.¹⁸ Thus, medical students will be forced to seek private student loans to make up the difference, or choose not to attend at all.¹⁹

Placing limits on federal student loans may have some benefits to students²⁰: borrowing caps may provide a partial, if not perfect, measure of protection against over-borrowing, and could potentially help to create pressure on institutions to reduce tuition costs. However, Congress’s new graduate loan caps were not accompanied by additional support for under-resourced institutions or low-income students. The existence of loan limits does not in itself place an undue burden on professional students, but the failure to provide direct aid or meaningfully address the cost of tuition in addition to the new restrictions could make it difficult for low-income students interested in pursuing medical degrees to finance their education.

The existence of loan limits does not in itself place an undue burden on professional students, but the failure to provide direct aid or meaningfully address the cost of tuition in addition to the new restrictions could make it difficult for low-income students interested in pursuing medical degrees to finance their education.

Low-income and low-wealth students who have borrowing needs beyond the new limits may turn to the private sector for financing, but could encounter challenges due to a lack of credit history; and while some students will be rejected for private loans, others will face poor terms, like double-digit interest rates, making the loans unaffordable. Students from low-income households are already underrepresented in medical education,²¹ and these changes may exacerbate the obstacles facing low-income students. Those needing to borrow beyond the new limit will face unique barriers to matriculation and completion.

Loan limits are most useful when paired with policies, like increased investment, that address inequities that may arise as a result of their introduction. Without that, under-resourced institutions could face enrollment and completion challenges, and students could be pushed into risky and ultimately unaffordable debt.

Black medical school matriculants, particularly those from low-income communities, faced unique financial challenges even before HR 1 added to them. Nearly one-quarter of Black medical students hold over $50,000 in premedical school and/or undergraduate education debt.²² Black medical students also hold more educational debt²³ than their non-Black peers. This high debt burden may be due, at least in part, to more limited financial resources available via family income or wealth. Medical school matriculation comes with immense costs, including but by no means limited to the high cost of tuition. Medical students are also required to pay for clinical board and licensing exams, as well as clinical equipment and fees associated with the residency application and interview process. Meanwhile, Black medical students are more likely than their peers to come from households in which parents earn less than $50,000.²⁴ While attrition among medical school students is low, students who are first-generation, low-income, and from groups underrepresented in medicine are slightly less likely to complete.²⁵

See Table 1 below for one angle on how the disproportionate impact of medical school debt is shouldered by Black students in particular. The schools whose student bodies include a comparatively high percentage of Black students tend to have massive average student debt: based on available data, all but one of the top five are HBCUs.

TABLE 1

Historically Black Medical Colleges Do More, with Far Less, for the Public Good

Historically Black medical colleges provide high-quality training for aspiring doctors and researchers while simultaneously demonstrating a commitment to improving access to care for entire communities. For example, Howard University College of Medicine, the nation’s first HBCU medical school, focuses on training doctors to meet the medical needs of underserved communities, with an explicit mission to conduct innovative research and advocate for excellence in education and health care for underrepresented populations.²⁹ Howard University Hospital, the nation’s only teaching hospital on an HBCU campus, serves a disproportionate number of underinsured, uninsured, and low-income patients from the broader Washington, D.C. community. Howard University College of Medicine also boasts the highest representation of Black students across U.S. medical schools, at nearly 70 percent of those matriculated.

Farther South, Meharry Medical College, an HBCU in Tennessee, provides free dental³⁰ and health care³¹ to patients throughout Nashville at its multiple new community clinics.³² Notably in 2025, Meharry also launched a genomic health study aimed at building an African ancestry database to address health disparities.³³ These efforts are part of a broader mission to improve the well-being of humankind both through medical innovation, patient-centered health care, and meaningful accountability.

And on the other side of the continent, Charles R. Drew University of Medicine and Science, the newest HBCU medical school and the only HBCU medical school in the Western United States, is expected to graduate its first class of MD recipients in 2027.³⁴ Located in the Los Angeles community of Willowbrook, the institution focuses on providing care to its medically underserved neighbors. Morehouse School of Medicine in Atlanta is another example of an HBCU medical school that is committed to addressing the health care needs of medically underserved communities³⁵ through education and by engaging in cutting-edge research. The new loan structures threaten the ability of all of these institutions to pursue their missions by making it prohibitively difficult for many prospective students to enroll and complete.

HBCU Medical Students Will Need Private Loans to Complete Their Studies—and May Struggle to Secure Them

The new limits on federal student loans will force more medical students to seek private student loans to pay for their medical school tuition. Since private lenders base decision-making on credit history and income, a significant number of students may be unable to obtain private loans due to lack of credit history, low credit score, and/or inability to secure a co-signer with sufficiently strong credit. In fact, research shows that 38 percent of all consumers would struggle to obtain a private student loan for themselves as a signer, or for a family member as a cosigner,³⁶ and that this share is higher in low- and moderate-income neighborhoods and neighborhoods where a majority of residents are Black, Native American, or Hispanic.

While Black medical students as a group hold more debt than their peers, those who attend HBCU medical schools generally have a larger debt burden even when compared to Black students at predominantly white institutions (see Table 1 above). This larger debt burden may result from the fact that HBCUs typically admit and enroll more low-income and first-generation students than non-HBCUs. These students often lack access to familial wealth and rely on student loans to finance their education. Unfortunately, underinvestment by states and the federal government leaves HBCUs with fewer financial resources to support students with institutional financial aid, particularly at the professional-degree level. As a result, students may be more reliant on loans to cover tuition and fees even if they receive institutional aid or external funding support.

New federal borrowing limits will push some HBCU medical students into the private lending sector. Before the new loan limits were imposed, professional degree students made up roughly 6 percent of all students with a private loan, and their average private loan amount was more than $20,000,³⁷ the highest among graduate borrowers with private loans. While borrowers in doctoral and professional programs in health profession fields tend to have relatively better credit standing than other fields, roughly one-quarter have poor or missing risk scores,³⁸ which creates challenges for qualifying for a private loan without a cosigner.

Once implemented later this year, the new loan limits will leave many medical students with funding gaps. In 2019–2020, approximately one-quarter of graduate students in medicine and osteopathic programs borrowed more than the new aggregate limit,³⁹ and more than 40 percent borrowed more than the new annual limits. Both the proportion of students seeking private loans and the amount of private loan debt is likely to increase as a result of the new loan limits. At Meharry, for example, where the average debt is nearly $50,000 more than the new federal loan limit, entire cohorts could be left in dire straits if they are unable to access private loans to fill the gap.

Students who need to borrow beyond the newly imposed limits but who have limited or poor credit will have fewer options in the private sector.

Students who need to borrow beyond the newly imposed limits but who have limited or poor credit will have fewer options in the private sector. Medical students from low-wealth and “underbanked” communities—communities without sufficient access to financial services, including households that may have bank accounts but rely on non-traditional services like payday loans for their everyday needs—in particular may experience difficulty obtaining a private loan. Medical students from low-wealth and underbanked communities may have trouble obtaining a credit-worthy co-signer. Nearly one-quarter of Black households are underbanked,⁴⁰ and more than 28 percent have not accessed mainstream sources of credit,⁴¹ which means that they do not have a credit score and therefore would not be able to obtain many private loans without a co-signer.

Private lenders may consider factors like a prospective borrower’s income, debt-to-income ratio, credit score, and payment history to determine whether a borrower meets certain underwriting standards, and may deny credit to prospective borrowers with limited or no credit history. While physicians are among the highest-paid occupations in the United States⁴² and those pursuing careers in medicine are likely to be able to afford repayment, students with little credit history may face difficulties in borrowing, thereby preventing them from becoming doctors in the first place. As a result, students unable to access private loans may also consider higher-cost debt products, including credit card debt, to self finance their medical education.

When compared to the federal loan system, private loans are riskier for borrowers⁴³ because they typically have fewer repayment, deferment, forbearance, and loan forgiveness options. Private loans may enter repayment while a borrower is still enrolled in medical school or residency,⁴⁴ meaning borrowers, particularly those in states with high costs of living, may struggle to keep their loans in good standing. While high-credit-score students may qualify for a lower interest rate and more favorable loan terms in the private sector, students with lower credit scores will typically pay higher interest on a private loan and will have fewer repayment and forgiveness options when compared to federal loans.

Losing the Doctors We Need Most, and before They’ve Even Begun

As of September 30, 2025, nearly 2 million borrowers hold a collective $119.2 billion in outstanding Grad PLUS debt. In 2019–20, nearly 30 percent of graduate professional students borrowed amounts that would exceed the annual cap on unsubsidized loans under HR 1.⁴⁵ Students enrolled in professional degree programs like medicine and law borrow more than their peers pursuing master’s and doctoral degrees.

While the new loan limits may push some master’s and doctoral degree programs to reduce costs, this is unlikely to be a feasible strategy for the vast majority of medical schools. Intensive training requirements, competitive faculty salaries, and facility and infrastructure maintenance costs all serve to drive the particularly high cost of medical education,⁴⁶ and it would be extremely difficult for medical schools to substantially decrease their tuition costs in the short term. The federal graduate student loan limits were intended to put downward pressure on inflationary graduate tuition prices. However, instead of driving colleges to reduce costs, loan limits may simply drive students to the private market, or keep some students from enrolling in medical school altogether. Increased public investment targeted to lower-resourced institutions, including HBCUs, could help address the problem. Without such investment, low-income students and Black students will be unable to access medical education at HBCUs.

There are clear examples of the difference that can be made at these schools when they get the support they need. In recent years, HBCU medical schools have received significant financial support⁴⁷ from the philanthropic community,⁴⁸ including $175-million gifts to Meharry Medical College, Morehouse School of Medicine, and Howard University College of Medicine from Bloomberg Philanthropies, intended to address student debt burdens through the establishment of a scholarship fund.⁴⁹ More than half of the Morehouse School of Medicine graduates benefiting from the fund went into primary care specialties, including internal medicine, pediatrics, and obstetrics/gynecology.⁵⁰ Unrestricted gifts of this magnitude can transform medical colleges, affording them the opportunity to grow and sustain programs, as well as to commit to capital construction and renovation projects. They empower institutions to decide for themselves what changes will aid in their long-term success and allow them to fortify their endowments.

Unfortunately, the philanthropic community’s occasional infusions of cash alone do not offer the kind of sustained support HBCU medical schools need to address student debt burden. Rather, increased federal investments are needed to ensure the long-term success and viability of medical schools, as well as of the physician workforce. While institutions with more resources may be better equipped to provide students the financial support they need, institutions without large endowments, including the HBCU medical schools, may struggle to recruit and retain students. To address this issue, Congress should allocate additional funding for grant aid to help HBCU medical students offset the high cost of attendance.

The new borrowing limits will likely push many more students into the private student market, and prevent other students from pursuing medical school. Congress did not take steps to address these consequences by allocating support structures to accompany the limits. The result will be decreased access to HBCU medical school programs. Because students attending under-resourced institutions are more reliant on debt to finance their education, loan limits can have a huge impact⁵¹ on their ability to pursue medical school and enter the health care workforce. If we’re going to produce the high-skilled health care workforce we need more crucially every day, one that can and will serve every community, then we cannot afford to leave these students and schools without the support they need.