Strict Loan Caps Impact Physician Assistant Candidates
New federal student loan restrictions are prompting prospective physician assistants (PAs) to reconsider their educational paths, according to organizations representing PAs. A federal student loan system overhaul, effective 1 July, limits annual federal loans for physician assistant students to $20,500, which is less than half the median yearly cost of PA programs.
The Department of Education (DOE) has imposed these strict caps despite the Department of Health and Human Services (HHS) relying on physician assistants to address healthcare shortages in rural areas.
“My credit score was a 400,” said Todd Pickard, president of the American Academy of Physician Associates (AAPA), representing over 200,000 PAs nationwide. 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.’”
Legislative Changes and Loan Caps
Starting 1 July, the Republican-led One Big Beautiful Bill Act (Obbba) will terminate the Grad Plus federal loan program, limit federal graduate loans to $20,000 annually, and cap loans for professional education at $50,000 per year.
The core issue concerns the definition of “professional” education. The DOE has classified most programs, including healthcare providers such as physician assistants, as non-professional. Groups representing PAs argue that their programs meet Obbba’s criteria for professional education and should therefore qualify for the higher loan cap.
Currently, the median cost for physician assistant training is $103,000 for up to 27 months, according to Sara Fletcher, executive director of the PA Education Association (PAEA), which represents PA training institutions.
For example, the State University of New York (SUNY) Downstate charges over $58,000 for in-state students and $113,000 for out-of-state students. Additionally, PA students often rely on loans for living expenses, as their training demands 60 to 80 hours of work per week.
Legal Challenges and Advocacy Efforts
A coalition of 24 Democratic attorneys general, one non-partisan attorney general, and two governors filed a lawsuit against the administration in May, seeking a permanent injunction against the changes. In June, nursing associations, the AAPA, and PAEA also filed for an immediate injunction.
“We got swept up in this big net without any real analysis and decision-making,” Pickard told a day after a federal judge in Washington heard arguments. “I think they decided they wanted to get out of the loan business.” The groups anticipate a ruling on the emergency injunction soon.
Role of Physician Assistants in Rural Healthcare
Physician assistants have the authority to prescribe medication, conduct physical exams, interpret diagnostic tests, and perform certain procedures. Approximately a significant portion work in rural settings, where they help fill family medicine shortages.
This role is acknowledged by the Obbba legislation itself. When Republicans passed the bill in July last year, they reduced Medicaid funding, the public health insurance program for low-income individuals, to finance tax cuts.
To compensate for Medicaid cuts, which were projected to reduce healthcare access, Republicans established the $50 billion Rural Health Transformation Program. This program partly depends on expanding the scope of practice for physician assistants, nurse practitioners, pharmacists, and dental hygienists to strengthen the rural healthcare workforce. Notably, physician associations expressed opposition to this change.
Currently, ten Republican-led states, including Alabama and South Dakota, employ more physician assistants than doctors. Even former President Donald Trump’s personal physician, Col James Jones, was a physician assistant, the first PA to serve in that role.
“On the one hand, you have the [government] saying we need more PAs and we need them to be doing good work and the work that they can,” Pickard said. “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.”
Debate Over Federal Loans and Tuition Costs
The DOE’s changes highlight a longstanding debate in higher education: whether federal loans drive tuition increases or provide a pathway for low-income students through subsidized loans.
DOE Secretary Linda McMahon has argued that capping student loans will reduce tuition costs, but critics see little evidence that prices will decrease sufficiently to align with the new caps.
“Tuition costs are set by institutions,” Fletcher said. “It’s a bigger system issue than just a PA program.”
For students, strict federal loan caps mean seeking alternative funding, primarily through private lenders and banks. This effectively reverts to a system Congress abolished in 2006 due to affordability concerns.
Federal graduate and professional loans carry an average interest rate of around 8%, while private loans range from approximately 3% to 17.95%. Unlike federal loans, private lenders require extensive credit underwriting, making borrowing difficult and expensive for individuals with low credit scores, such as Pickard.
When asked if he had opportunities to discuss these issues with administration officials, Pickard responded negatively despite his efforts. He is currently pitching segments to Fox News and Newsmax and expressed a desire to speak directly with Donald Trump.
“I’d love to sit down and talk to Donald Trump.”
