Jefferson Vasquez-Reyes spent enough time as a child in doctors’ offices, translating for his primarily Spanish-speaking relatives, to know he would one day study medicine.

The senior at the University of Maryland, College Park, has spent his college career preparing to earn admission into a medical program and achieve his dreams of becoming a doctor.

But, even if Vasquez-Reyes aces the entrance exam, he may not be able to attend medical school, after the curtailing of a federal loan program as part of this summer’s “One Big Beautiful Bill” act, signed into law by President Donald Trump.

The 21-year old is one of over a million students who will be impacted by this new policy, which national loan experts fear will deter the next generation of students from attending graduate school. The fallout could reduce the number of lower-income candidates and drive students toward private loans with conditions less favorable to borrowers, loan policy experts say. It could also be disastrous for the state of Maryland, which is facing a steep doctor shortage.

The new policy has “completely obliterated the funding stream that students rely on in order to get this type of professional education,” said Aissa Canchola Bañez, policy director at Protect Borrowers, a nonprofit focused on student debt.

“This will impact fields that we know rural communities and other high-need communities are lacking,” Canchola Bañez said. “Nursing professionals, medical professionals, social workers and educators. These are positions that we desperately need to fill.”

The Grad PLUS loan program, established by a Republican-led Congress in 2006 to help middle- and low-income Americans afford a graduate education, has allowed students to take out federal loans for the total cost of their tuition, minus the amount of institutional aid they receive.

Under the new rules, professional students — including those studying to become doctors, veterinarians, lawyers, dentists, clinical psychologists and theologists — will be able to take out a total loan of only $200,000, or $50,000 a year. Critics of Grad PLUS loans applauded the decision, which was made with the belief that the program encouraged universities to charge more for graduate programs.

According to a report from American University, 40% of all graduate students, or about 1.4 million people, borrowed from the federal government to pay for their education in 2020. About 70% of those in professional programs took out Grad PLUS loans, with 370,000 students borrowing more than the new limits allowed.

Estimated tuition at the University of Maryland, Baltimore’s medical school, the state’s only public medical school, is over $365,000 for four years, exceeding the new $200,000 Grad PLUS cap.

In-state dental students will have to pay more than $450,000 for four years of schooling, while the in-state law school total is estimated to be over $200,000.

Of the 6,784 total students enrolled at the University of Maryland, Baltimore, 1,993 have a federal Grad PLUS loan, according to Alex Likowski, a university spokesperson. That’s about 30%.

The loan caps are stricter for students getting their master’s degrees or graduate certificates. Federal loans are limited to $20,500 annually for nonprofessional programs, with a $100,000 total cap.

But loan policy experts fear a cap on federal aid will prompt students to seek private loans, which have higher borrowing limits but also tend to have higher interest rates and fewer forgiveness programs to pay off debts. There’s also a chance students will not qualify. Private-loan vendors usually look at applicants’ FICO scores to determine their eligibility. Many low-income students don’t have enough credit history to be considered.

In 2020, only about 4.6% of graduate students relied on private loans to finance their studies, according to the American University report. That number is likely to skyrocket with the change to Grad PLUS loans.

Michele Zampini, associate vice president for federal policy and advocacy at the Institute for College Access & Success, believes the new policy will impact low-income students and students of color, especially those who are Black.

“They have less generational wealth to draw on, less parental income to draw on, and so they are facing higher out-of-pocket costs and in turn have to cover those costs through loans,” she said. “Unfortunately, Black students in particular are not as well served by the private lending market.”

Zampini believes the new loan caps are unlikely to cause tuition prices to decrease. Instead, she said, the change will only limit who can afford to attend graduate programs.

“We are really concerned about access for students of color and for students from low- and moderate-income backgrounds,” she said. “For medical school in particular, it’s going to be very difficult for a lot of these students.”

The American Medical Association released a letter in June, before the bill passed, warning that the change would “reduce the pipeline of future physicians by making medical school unaffordable for many prospective students, limiting the borrowing and repayment options for physicians in training, and deterring physicians from serving in critically underserved regions.”

That could be detrimental to Maryland, which is projected to be short over 1,000 doctors. Fourteen of Maryland’s 24 counties are health professional shortage areas.

Data shows the Grad PLUS loan program has encouraged more students to attend graduate school. According to 2021 census data, in the two decades since the program was implemented, the number of Americans with a postgraduate degree has doubled.

Graduate students make up about 15% of higher education enrollment in the U.S. but account for nearly 40% of outstanding student debt, according to a 2020 report from the Congressional Budget Office.

Vasquez-Reyes, who testified about the changes in front of state lawmakers in September, said he still plans to attend medical school.

“I still see myself achieving this goal,” he said. “I may have a different balance than other graduates, but at the end of the day I am very confident I will be able to accomplish this.”

He’s just not sure when.

Though he had planned to apply immediately after earning his bachelor’s degree this spring, he now thinks he will take a few years to see if any more changes to the loan policy take place.

He wasn’t always sure he would persevere.

“Am I going to keep going for this dream and aspiration and calling to heal?” Vasquez-Reyes asked himself when he learned of the change. “How much debt can I truly take?”

About the Education Hub

This reporting is part of The Banner’s Education Hub, community-funded journalism that provides parents with resources they need to make decisions about how their children learn. Read more.