Changes in federal financial aid that will become effective later this year could result in medical students, who find themselves burdened with loans to pay for their education choosing to practice higher-paying specialties instead of primary care, which would further impact medical care in underserved areas of the state.
“The big worry is it will drive a financial pressure already there,” said Dr. Brent Smith, a member of the Advocacy Committee of the Mississippi Academy of Family Physicians.
“It’s not going to discourage people from going to medical school but make it difficult for the next generation of family physicians and pediatricians to be created.”
The One Big Beautiful Bill Act, signed by the President on July 4, 2025, will make significant changes to federal student financial aid programs, effective July 1, for new borrowers. The act caps the amount of money graduate students, who are new borrowers, may obtain from the federal government to pay for school.
The American Medical Association has warned that the financial aid caps could worsen the physician shortage by making medical education less achievable, said Richard Roberson, president/CEO of the Mississippi Hospital Association. He expects the impact of the changes to be felt nationally but especially pronounced in Mississippi’s rural areas and other areas already experiencing workforce issues.
“Higher education costs are known barriers to entry, especially for students from rural or low-income backgrounds, which are more common in Mississippi,” he said. “This change could undermine efforts to recruit and train health care professionals who are more likely to serve already underserved communities.”
Roberson, like Smith, expects limiting federal financial support will likely lead to greater reliance on private loans with higher interest rates.
“Some low-income students may not be able to enroll at all, as these private loans often require a co-signer,” he said. “The challenge is to work with our institutions, state officials and medical stakeholders to make degrees more affordable.”
For low-income or students without access to credit, the cost of obtaining a degree will be a front-end barrier rather than just a repayment issue, Roberson said.
Students will not be able to get unsubsidized federal financial aid loans of more than $100,000 total for a master’s degree or $200,000 total for a doctoral, medical or professional degrees. The caps replace Grad PLUS, which allowed unlimited borrowing up to the cost of attendance, for new borrowers.
The act also established a lifetime student loan borrowing limit of $257,000.
The University of Mississippi Medical Center educates at the master’s and professional level many of the state’s medical professionals, including physicians, dentists, nurse practitioners, occupational therapists and physical therapists. William Carey University offers the only other option in the state to become trained as a physician or a pharmacist.
The estimated cost of attendance at the University of Mississippi School of Medicine for the 2025-2026 year is $80,200 for a first-year medical student; $82,891 for second-year student; $80,635 for a third-year student; and $84,325 for a fourth-year student.
The Office of Communications and Marketing at the University of Mississippi Medical Center screens requests for interviews with its employees and would not make anyone available to discuss the changes in federal financial aid. Patrice Guilfoyle, communications director, responded in an email: “We are declining the interview.”
Federal loans are especially important for students earning medical degrees, law degrees and other advanced degrees that lead to doctorates, said Smith, who lives in Cleveland and works in Greenville.
“As you get into those, the expectation is that you wouldn’t be working because of the rigor of the studies,” he said. “Students depend upon those loans for the cost of school and the cost of living and paying basic bills to exist. When you do the math over four years, those numbers add up quickly, plus many schools are in urban environments where the cost of living is higher.”
Smith said he’s heard the argument that capping the amount of federal loans will force schools to provide a cheaper education or to become more fiscally responsible.
Academic medical centers do not exist in isolation, he said, but are “three-legged stools” that consist of patient care, education and research. “Those three fund the overall mission.”
Academic medical centers do not have the capacity to reduce the costs of education, he said.
“It doesn’t work that way,” Smith said. “It will shift a larger percentage into the private sector for loans.”
Private loans are less flexible and borrower-friendly, may not offer the same forbearance or deferment for situations like financial hardship, as federal loans, come with higher interest rates and do not offer public service loan forgiveness programs to students who work in underserved areas, he said.
Smith, the son a teacher/football coach and a nurse, said he worked his way through undergraduate school at Ouachita Baptist University in Arkadelphia, Ark., but relied on federal student loans “100 percent” when he was in medical school at the University of Mississippi.
He owed “almost $200,000” when he graduated.
Andrew Clark, who earned his Pharm.D. degree from the University of Tennessee College of Pharmacy and opened Northtown Pharmacy on Old Canton Road in 2021, said pharmacy students also rely on student loans to pay for their tuition and fees and costs of living while they are in school. “The program is so intense and time-consuming that you don’t have extra time to work,” he said.
Federal student loans were necessary for his education, Clark said, and for most of his fellow pharmacy students.
Some parents may be able to pay for a student’s undergraduate years, but even many of those will leave it up to their student to foot the bill for a graduate degree and beyond, he said.
Clark’s daughter is in her fourth year of pharmacy school at the University of Tennessee. “She’s responsible for paying for school,” he said.
Smith hopes to see the public service loan forgiveness program preserved and for a limit to be placed on the interest rates of private loans. “If they cap what federally subsidized loans, no reason they can’t put a limit on the interest rates on private loans,” he said.
Consisting of 870 pages, the One Big Beautiful Bill is such a large piece of legislation with details to clarify, Smith said.
“How it’s going to act or work isn’t fully understood,” he said.
On an optimistic note, Roberson believes change creates opportunities for innovation. “We hope to work with our education community and medical stakeholders to expand the pipeline of medical professionals,” he said.
This coverage is supported by a grant from Press Forward Mississippi, part of a nationwide philanthropic effort to strengthen local news so communities stay informed, connected and engaged.
