What the 2025 law changed for medical school loans
In July 2025, a sweeping federal budget law (often shortened to the "OBBBA") rewrote the federal student-loan rulebook, with most changes taking effect July 1, 2026. If you trained under the old system, the ground has shifted beneath you. Here's what actually changed and why it matters for a physician's six-figure balance.
1. A new repayment plan: RAP
The headline change is the Repayment Assistance Plan (RAP), the new income-driven plan for borrowers going forward. RAP sets your monthly payment as a percentage of your total income — scaling from 1% at the lowest incomes to 10% above roughly $100,000 — rather than a percentage of "discretionary" income like the old plans. It reduces your payment by $50 per month for each dependent child, waives unpaid interest each month so your balance won't balloon, and forgives any remaining balance after 30 years.
The catch for doctors: RAP has no payment cap. As an attending earning several hundred thousand dollars, your RAP payment keeps scaling with income, which can make it far more expensive than the older capped plans. (We compare them head-to-head in RAP vs IBR for physicians.)
2. The old income-driven plans are sunsetting
SAVE, PAYE, and ICR — the alphabet soup of older income-driven plans — are being phased out for borrowers over the following years. Legacy IBR remains available to borrowers who first borrowed before July 1, 2026, and that matters enormously: IBR's payment is capped at the standard 10-year amount, which for high-earning attendings is often dramatically cheaper than uncapped RAP.
The date that protects you. If your first federal loan was before July 1, 2026, you generally keep access to legacy IBR. But taking out any new federal loan after that date can sweep all of your loans onto RAP and close the door on the capped plan — so the timing of any future borrowing is now a high-stakes decision.
3. Grad PLUS is eliminated, with new borrowing caps
For new borrowers, the Grad PLUS loan — long used to cover the gap between unsubsidized limits and the true cost of medical or dental school — is being eliminated, and new aggregate borrowing limits apply to graduate and professional students. This won't change the loans you already have, but it reshapes how future students finance their training and may push more borrowing toward private lenders.
4. PSLF survives — and gets more valuable for some
Public Service Loan Forgiveness remains intact: 120 qualifying payments at a nonprofit or government employer, then tax-free forgiveness. Because the new uncapped RAP can make standard repayment pricier for high earners, the relative value of working for a qualifying employer and pursuing PSLF has, if anything, gone up for many physicians.
What you should do about it
- Find out when you first borrowed. Pre–July 2026 borrowers should guard their legacy IBR access.
- Re-run your numbers. Plans you chose under the old rules may no longer be optimal.
- Be deliberate about new borrowing. A new loan after the cutoff can change which plans you qualify for.
These rules are still being implemented by the Department of Education and loan servicers, so specifics can shift — always confirm current details at studentaid.gov.
Model the new rules on your numbers. Our engine is built for the post-2026 system — RAP, capped IBR, PSLF, and refinancing, ranked by real cost.
Educational only, not financial, tax, or legal advice. The 2026 rules are still being implemented; verify at studentaid.gov.