The student loan landscape changed significantly as a result of the 2025 One Big Beautiful Bill Act (OBBBA), including a new Income Driven Repayment (IDR) program known as RAP and the elimination of some of the old ones. Public Service Loan Forgiveness (PSLF) was not changed, but there WAS a major change that will affect current medical (and other professional) students starting in July 2026. There is now a $50,000 per year/$200,000 total (not indexed to inflation) cap on federal student loans for medical school. Since many medical schools have a cost of attendance higher than that and since many medical students (73%) are borrowing to pay for most, if not all, of the cost of school, a “gap” now exists between what they can get in federal loans and what they need to pay.
Only 350 out of 7,333 program-institution combinations have a cost of attendance under $50,000 per year, and pretty much none of those are medical or dental schools. The median medical student faces a $35,614 annual gap, and the median dental student faces a $49,869 gap each year. That gap for all professional students totals almost $52 billion per year. That's obviously a huge market, especially since the private student loan lending market is only about $14 billion per year right now. It's obviously about to get a whole lot bigger.
How WCI Can Help with Medical School Loans
More than a decade ago, The White Coat Investor recognized that it could help its audience with student loan refinancing. Residents and attending physicians (and similar professionals) discovered they could get much better interest rates with private loans than with federal loans, so once they knew they no longer needed/wanted the benefits of IDR programs or PSLF, they did so.
We curated a list of lenders who could specifically work with docs and others. Our audience got an even better deal by applying for these loans via our links than they could get by going directly to the lenders. That usually meant a cash bonus and, often, a WCI online course (which had even more value in the long term) thrown in to boot. So, you get a lower rate, cash back, and a free course to help you get a financial plan in place; you get better service than your federal student loan company was providing, and you get to support the WCI mission. What's not to like?
When the pandemic hit and student loan payments (and interest) were paused for 3 1/2 years, that particular “product line” for WCI dramatically decreased. Who's going to refinance federal student loans when you have zero payments and 0% interest? Almost no one. But we still maintained those relationships and deals with the lenders for those with private loans. When OBBBA was passed and we saw what would be happening this summer, we started working with those lenders to get the very best deals out there on private student loans for current medical students. We now have those contracts in place in time for you to borrow for the 2026-2027 school year.
More information here:
Helping a Pre-Med Run the Numbers on Medical School
Borrow Federal Student Loans Before July, If You Can
Remember, these changes take place in July. It's now May. If you can get more federal student loan money this year to pay for next year, it's probably a good idea to do so. Especially if you think there's a chance PSLF might be in your future. But once July hits, that's it. You can only take out $50,000 per year, and if you need more than that, you'll need private loans.
Time to Be Frugal Again
Back when WCI started in 2011, I gave advice to medical students to live as frugally as they could so they could limit how much they had in student loans. Basically, everything they buy will really cost them 2X-3X+ as much as the sticker price by the time they pay back the loans, so buy as little as they can. As the years went on and student loan policy became more and more generous, I didn't feel like I could give that advice in good faith. With docs receiving tax-free PSLF of $400,000 or more, maybe the right move was to take out as much as you possibly could in federal loans just in case you ended up with a PSLF-qualifying job. Especially with $0, 0% interest payments.
Well, the pendulum has swung back. You're definitely not going to get PSLF for your private student loans, so limit them as much as you can. Find roommates. Send your partner to work. Consider a part-time job yourself. See if your family can help. Use your savings (at least non-retirement account savings). Stop eating out. Drive a beater (or ride your bike). Go to the free lunch-and-learns. You know the drill. Take out as little as you can in private student loans.
But for those who do need them, we can help.
More information here:
The AMA Has Thoughts About Student Loans — Here’s What I Like and What I Really, Really Don’t
WCI Private Student Loan Partners
Who are the WCI student loan partners? They're mostly the same folks we've been working with for the last 10-15 years to refinance student loans for doctors. We know they can provide great service and fair terms (plus, again, the cash back and a free WCI course we've negotiated for you). They want your business. You want what they're offering. WCI gets you a better deal, and we get paid for doing so. It's a real win-win-win here.
† Bonus may include cash rebates and value of free course. Student loan borrowers who use the WCI links will be enrolled in The White Coat Investor’s flagship course, Fire Your Financial Advisor: STUDENT for free ($99 value). Borrowers may still receive the amazing cash rebates that WCI has negotiated with lenders. Offer valid for loan applications submitted from May 1, 2026 through October 31, 2026. Free course must be claimed within 90 days of loan disbursement. To claim free course enrollment, visit https://www.whitecoatinvestor.com/loanbonus.
We recommend you check with two or three of these companies and go with the one offering you the lowest interest rate and best terms.
While I hate to see people go into debt, I do think medical school is still a good financial decision—even if you have to borrow the entire cost of attendance—as long as all of the following occur:
- You get into school.
- You get through school in good standing and match into your chosen specialty.
- You finish residency in good standing and get at least the average-paying job in your chosen specialty.
- You work full-time for at least five years.
- You learn how to manage money (i.e., either qualify for PSLF and/or live like a resident for 2-5 years and send big payments to your lender).
Minimizing your student loan debt, managing it properly, and then getting rid of it ASAP will help you to reach your financial goals so you can concentrate on what really matters in your life. We'll help you with every step along the way, including:
- Getting the loans.
- Living frugally.
- Managing your federal loans properly.
- Refinancing the loans as needed.
- Getting paid what you're worth.
- Learning to live on a budget and pay them off quickly.
What do you think? How has your borrowing strategy changed post-OBBBA? How much will you be borrowing in private loans this year?