FFFM | What federal student loan borrowers need to know

Significant changes are coming from the Department of Education that will affect medical students, residents, and family physicians with federal student loans. This episode offers up key points that family physicians should know and offers ways to help advocate for change.

Welcome to Fighting for Family Medicine. I'm David Tully, Vice President of Government Relations and a member of the AAFP's advocacy team. In this episode, you'll hear about how the AAFP advocated for family medicine during the month of June. Then I'll spend some time talking with members of our government relations team on the state of student loans, including information on what changes are coming from the Department of Education, how these changes will impact the family physician workforce, what the academy is doing to advocate for loan repayment programs, and how members can amplify our advocacy efforts.

You can explore more resources related to this episode in the show notes below.

To start with some exciting news, I'm pleased to share that more than 300 family physicians from more than 40 states and the District of Columbia came to Capitol Hill this month as part of the annual Family Medicine Advocacy Summit to advocate for policies that strengthen primary care. Our priorities include eliminating Medicare cost-sharing for chronic care management, improving oversight of Medicare Advantage plans and expanding pathways for physicians to practice in underserved communities.

As AAFP's president, Dr. Sarah Nosal, wrote in an op-ed in Medscape, "And more often, physicians no longer view advocacy as something separate from clinical care. They find such a mindset incredibly untenable. When insurers delay treatment, we share the frustration with our patients. When patients cannot afford recommended services, we share the same fears and concerns as the families for whom we care. When communities cannot recruit enough physicians, our patients and physicians pay the price."

If you couldn't join us at FMAS this year, you can still get involved by contacting your lawmakers directly about these issues by engaging in our Speak Out program in our Show Notes.

Every patient deserves access to a family physician. The AAFP is encouraged by the decision to halt the proposed $100,000 H-1B application fee, but much remains uncertain. We urge Congress to pass the bipartisan H-1B for Physicians and Healthcare Workforce Act to permanently exempt healthcare workers from this fee and ensure patients can get the care they need.

The AAFP recently warned lawmakers that Medicaid work requirements could cause millions of patients to lose coverage while creating new administrative burdens for states. Alongside other physician groups, the academy is urging policymakers to protect access to Medicaid and reduce barriers to care.

The AAFP is pushing the Department of Education to ensure federal student aid policies reflect the realities of medical training. Without adjustments, family medicine and other physician training programs could be unfairly penalized, worsening physician shortages.

New Affordable Care Act marketplace rules for 2027 are expected to tighten eligibility requirements and can make coverage harder to obtain for some patients. The AAFP successfully pushed back on several proposals that would have further weakened patient protections, but remains concerned about potential coverage losses moving forward.

In the regulatory space, the AAFP has been urging policymakers to focus on strengthening primary care. On the Medicare hospital payment policy front, the AAFP is supporting efforts to strengthen rural training opportunities and reduce administrative burden while raising concerns about proposals that could negatively affect rural hospitals and the primary care workforce.

As the National Institutes of Health develops its next five-year strategic plan, the AAFP is urging the agency to elevate primary care research priorities, strengthen research capacity, and invest in the infrastructure needed to generate real-world evidence that improves patient care.

The Centers for Medicare & Medicaid Services is updating quality measures for home and community-based services, and the AAFP is emphasizing the importance of care coordination between those services and primary care to improve outcomes for patients with complex needs.

CMS has also proposed modernizing prescription drug prior authorization through new interoperability requirements. The AAFP supports reducing the volume of prior authorizations overall and the many burdens associated with the prior authorization process. We are calling for shorter response timeframes, stronger appeals protections and implementation support for smaller physician practices.

You can read our full letters to the NIH and CMS in the show notes.

So for this part of our episode, we're going to take a few moments to unpack all the changes that are coming out of the Department of Education when we think about student loans. With the one-year anniversary of H.R. 1, also known as the Big Beautiful Bill Act passage, let's dive into how this piece of legislation affects medical student debt.

And here with me today is Mandi Neff, our senior strategist for regulatory affairs and policy, and Megan Mortimer, our manager of legislative affairs, to help us learn a little bit more about all these changes. Megan and Mandi, welcome back to the podcast. Why don't we start first with you, Megan?

Perhaps you can talk a little bit about what the AAFP did in pushing back against these changes. And then Mandi, maybe you could spend a little bit of time helping our members understand what they need to know about this law and how it will affect the primary care workforce going ahead.

Thanks, Dave. Yeah, I mean, as you know, as a team, we worked really hard to push back on a number of provisions in H.R. 1, but we doubled down on the student loan provisions over and over and over again. I do want to say that they were even worse than what they are going to be in terms of implementation in the actual passed language, but we continue to go back to the leadership and the people that had the most influence in this discussion to talk about how this will disproportionately affect primary care and the primary care workforce.

We are also so glad to have advocacy ambassadors, which had just come off the ground, and our grassroots alerts through Speak Outs, and we really appreciated our members weighing in and being part of that discussion. So now that this is law of the land, I'm just going to turn it over to Mandi so she can kind of give an outline of what to expect moving forward.

Thanks, Megan. H.R. 1 unfortunately has major implications for the family physician workforce. It required the Department of Education to restructure federal student loan repayment options in several ways, including creating a new income-driven repayment program with stricter terms, eliminating existing repayment plans such as SAVE and PAYE, and revising public service loan forgiveness eligibility and qualifying payment rules.

Most critically, the law ends Graduate PLUS loans, and it limits borrowing for medical and professional students going forward to $50,000 annually and $200,000 in the aggregate. I know that's a long list, but the key takeaway is unfortunately simple. For most medical students, the practical impact is that you'll likely have less access to federal loan money and may need to rely more heavily on private financing.

Federal student loans are a key part of how many physicians get through medical school and how they manage repayment during lower income training years. Federal loans also come with more robust borrower protections and may align better with the PSLF program. As federal borrowing options become more limited, more students will likely need to turn to private financing to cover the gap, which often have higher interest rates and may require a cosigner.

Considerations like these may inadvertently discourage medical students from choosing family medicine or other primary care specialties given the increased financial pressures they'll be facing.

Great. I really appreciate the perspective on kind of what we did in the fight last year and also kind of what it looks like from an implementation standpoint.

Mandi, I want to come back to something you talked about a little bit earlier, which is the new federal borrowing caps, and obviously there's a lot of different deadlines associated with H.R. 1 that the academy is closely tracking and responding to. Wonder if you could talk a little bit more about when the federal borrowing caps will take effect and who will be most impacted by these caps.

Sure. Thanks, Dave. So most of the education-related provisions from H.R. 1, including the federal borrowing caps, will take effect on July 1st, which is right around the corner. Unfortunately, future medical students, particularly future family physicians, are likely to be among the people most impacted because they will no longer be able to rely on federal borrowing up to the full cost of attendance through the Grad PLUS Program like historically they've been able to.

Additionally, medical students who borrow new loans on or after July 1st, 2026, will largely only have access to two new repayment options, the tiered standard repayment plan and the repayment assistance plan. Medical students who are interested in participating in the Public Service Loan Forgiveness program may be especially impacted by when their federal loans are first disbursed and whether any new direct loans are borrowed on or after July 1st.

Students who are taking out federal loans for the first time after July 1st will generally need to use the new repayment assistance plan if they want to access PSLF. However, current borrowers who do not take out new loans may have broader legacy plan options for a limited time. This is especially important for family physicians.

When we surveyed AAFP members last year, a significant majority of respondents reported participation in a loan repayment program, and of that group, 75% said they specifically utilized PSLF.

Great. Really appreciate that. Mandi, I wonder if you could talk a little bit about some of the exceptions. Are there any exceptions that family physicians should be made aware of, and who would qualify for these exceptions?

Definitely. There are very limited exceptions in place that some individuals, including some medical students and future medical students, may be able to utilize. Most importantly, current and future medical students need to understand whether the Department of Education considers them new or existing borrowers under H.R. 1.

Most students who take out federal student loans after July 1st will be considered new borrowers and will be transitioned into the new narrower two-plan repayment structure. However, there is a limited exception for some current students who began borrowing before July 1 and take out new loans after that date.

That protection is temporary, and it depends on continuous enrollment in a student's current program. If a student wants to switch programs, switch specialties, or switch institutions, they will lose that exemption and then become subject to the new federal caps. Separately, existing borrowers who do not take out new loans after July 1st may retain their legacy plans, which are subject to forthcoming transition rules we haven't seen yet.

But those legacy plan transitions would go through July 1st of 2028.

Great. Appreciate that. Let's bring it back to our advocacy efforts, and I'm hoping maybe you guys can talk a little bit about what the Academy has been doing to mitigate some of these changes as well as headwinds that we are anticipating we may be facing in the coming months.

So Megan, maybe I could start with you first, and you can talk about the legislative side, and then Mandi, we can come back to our regulatory advocacy efforts So yeah, in addition to all the pushback that we did during the development of H.R. 1, we still have a number of student loan bills that we support at AAFP that are supposed to help mitigate the cost of a medical education for our family physicians.

We still continue to advocate for the REDI Act, which is the Resident Education Deferred Interest Act, which would allow you to defer the interest accrual on your federal student loans while you're in your residency programs. We've had to work diligently over the past year, however, to ensure that this bill is not attached to additional restrictions on the PSLF program, which is one thing that the majority party for House Education and the Workforce Committee are proposing to move this bill forward, which again is something that we adamantly oppose.

We also continue to work on legislation that supports loan repayment programs, National Health Service Corps, again, PSLF, National Indian Health Service, and other student loan repayment programs that are either through HRSA or through other departments, again, to help not only recruit, but retain people into the primary care healthcare workforce space.

We are also looking for opportunities moving forward to reverse some of the student loan provisions that have been in H.R. 1, and we have begun to identify actually some bipartisan efforts or champions that are, are willing to take a look at this perspective, especially when it comes to increasing the federal loan limits for medical students and residents, or perhaps even for just the primary care workforce overall.

We have continued to plant questions at hearings when representatives from the Department of Education or Treasury or the SBA, who are now going to be tasked with taking on this portfolio, to ask them to make sure that they provide us with extensive lists of good lenders, lenders that are not known to have predatory practices so that our members can feel safe when they do have to enter the private market to help make up for the loss in the federal student loans that they are no longer going to be able to have access to.

And Mandi has done considerable work on the agency side to make sure that the implementation of this law is not even more draconian than it already is, and I'm sure she can fill you in on what those activities have been.

Thanks, Megan. The AAFP's been heavily involved in advocating strongly throughout the regulatory and rulemaking processes that have come from H.R. 1.

This law spawned multiple negotiated rulemaking committees, all of which allowed opportunity for public comment, as well as multiple proposed rules that the AAFP provided feedback on. We continue to engage with the Department of Education through every possible avenue to underscore the consequences both physicians and their patients are going to face if these regulations are allowed to proceed.

We're also involved in several student loan related coalitions and continue to strategize with our counterparts both within and outside of the House of Medicine to push back Additionally, the government relations team has worked closely with the academy's web and content team over the past few weeks to develop a new page on the website that has new resources to help support members as they're navigating these changes.

That page is called Managing Student Loan Debt, and it's linked in the show notes of this episode, so I hope folks will check it out. Finally, many lawsuits have been filed to challenge various pieces of the regulations that have come out of H.R. 1. We expect various courts to start issuing rulings in the coming days, and we will be sure to keep AAFP members updated on that front.

Great. Really appreciate that. And as we wrap up our time, I appreciate the call-out by Mandi on, on checking out the newly created website where we will be continuing to input all of the different deliverables that our team is working on, as well as get a nice overview of our advocacy efforts. So really appreciate the strong collaboration between Megan, Mandi, and other members of the AAFP staff on that.

My last question to Megan, how can family physicians help advocate for improved student debt policies moving forward?

Well, as always, they can sign up to be advocacy ambassadors, which is a program that we have talked about numerous times. But in doing that, they can not only be up to date on what we're doing on our advocacy efforts, but they can be direct links to their members of Congress to help them understand how H.R. 1's implementation of the student loan policies are affecting them, their choices, decisions about where to be, and how it might affect their even specialty choice at this point.

So we will continue to look for our advocacy ambassadors to not only grow the program, but to make sure that the advocacy ambassadors that we already have are very active in this space. Every member of AAFP can participate in our speak-outs. If you don't receive our emails for our speak-outs, please sign up for them so that you can receive them in real time.

But we also have our speak out page where all of our active speak-outs are housed, and you can reach out to your members of Congress any time, utilizing all of the different speak-outs that we have going. And lastly, I, I really want to have members be encouraged to share their story with us. We have numerous outlets in which to do that, whether it's through advocacy ambassadors or other avenues.

Just this past week, Dave, when we were up on the Hill with over 300 of our members for FMAS, you know, we had a number of residents and medical students that were going to their members of Congress and their senators talking about how the student loan limits are really affecting their practice choice.

You know, many of them do not feel comfortable going back to the rural communities that they really want to serve in because they're concerned that the, the level of income that they are going to make is not going to be enough for them to even cover their, their monthly student loan payments, especially given the uncertainty around the private lender market and how that's going to play into things.

And we're really starting to hear these stories on the ground. So those are the ways in which our members can be involved, and if at any time you need to reach out to myself or Mandi to talk about these things and ways that you can get involved, we're more than happy to offer any of that to our members.

Great. Well, that's a great place to end our time together. And Megan and Mandi, I want to thank you for joining us on the podcast, and I appreciate the ongoing collaboration between you both in kind of looking at our student loan issues from the legislative angle and the regulatory angle. So thank you for coming back to the podcast, and I know that we'll bring you all back in the future as developments continue to arise in the space.

Thanks, Dave.

Thank you. Thanks for joining us today. You can find out what the AAFP is doing to advocate for you, your patients, and your practices, and how you can get involved by visiting our website at aafp.org/advocacy. Be sure to check out the show notes for more links and details about today's episode.

If you've enjoyed today's episode, let us know by dropping a line to aafpnews@aafp.org. Be sure to share the episode with your followers on social media and tag the AAFP. We will talk to you soon.