Federal loan caps take effect July 1 for physician assistant programs

Beginning 1 July, federal graduate student loans for physician assistant programs will be capped at $20,500 per year under changes in the One Big Beautiful Bill Act. The limit is less than half the median annual cost of such programs, according to groups representing physician assistants.

The Department of Education classified most physician assistant programs as graduate rather than professional education, triggering the lower cap. Groups argue the programs meet criteria for the higher $50,000 professional-education limit set by the same law.

Background on the policy change The overhaul ends the Grad Plus loan program and replaces it with the new annual and lifetime caps. Physician assistant training typically lasts up to 27 months and carries a median total cost of $103,000, according to the PA Education Association.

Students also borrow for living expenses because programs often require 60 to 80 hours of work per week. Private loans carry variable interest rates that can reach nearly 18 percent and require credit checks that some applicants may not pass.

Lawsuits and rural-health context A coalition of 24 Democratic attorneys general, one non-partisan attorney general, and two governors filed suit in May seeking to block the changes. Nursing associations, the American Academy of Physician Associates, and the PA Education Association filed a separate suit in June requesting an emergency injunction.

A federal judge in Washington heard arguments in the second case this week, and a ruling on the injunction is expected soon. The same legislation that imposed the loan caps also created a $50 billion Rural Health Transformation Program intended to expand the use of physician assistants and other providers in underserved areas.