--- title: "Entering medical school and taking the first loans" canonical: "https://www.joinandwise.com/crossings/entering-medical-school" checked: "2026-10-21" claim: "andwise:crossing/entering-medical-school@2026-10-21" license: "CC BY 4.0" --- # Entering medical school and taking the first loans Federal borrowing for medical school changed on July 1, 2026. This page sets out the limits, the gap they leave, which costs arrive in residency, and how each lender is paid. **The decision:** Accepting a seat, and the federal and private loans that pay for it. ## What changes - For periods of instruction starting on or after July 1, 2026, Grad PLUS loans end. Medical students can borrow up to $50,000 a year and $200,000 in total in Direct Unsubsidized loans, inside a $257,500 lifetime cap on federal student loans. Repaid or forgiven amounts still count toward the lifetime cap. ([Public Law 119-21 (2025), Title VIII, §§81001 and 82001–82004](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm); [Federal Student Aid: loan limits and definitions from July 1, 2026](https://studentaid.gov/announcements-events/big-updates/definitions); checked 2026-10-21) - AAMC's median first-year cost of attendance for 2025–26 was $75,654 at public schools and $106,787 at private schools. Before scholarships or family support, that is $25,654 and $56,787 above the $50,000 annual federal limit. ([AAMC FIRST, Debt, Costs, and Loan Repayment Fact Card, Class of 2025 (October 2025)](https://store.aamc.org/downloadable/download/sample/sample_id/652/); checked 2026-10-21) - Federal loans first disbursed on or after July 1, 2026 can be repaid only under the Repayment Assistance Plan (RAP) or the Tiered Standard plan. Tiered Standard payments do not count toward Public Service Loan Forgiveness (PSLF). ([Public Law 119-21 (2025), Title VIII, §§81001 and 82001–82004](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm); [34 CFR 685.219, Public Service Loan Forgiveness](https://www.ecfr.gov/current/title-34/section-685.219); checked 2026-10-21) - Students enrolled in their program and holding a Direct Loan for it before July 1, 2026 keep the earlier limits, including Grad PLUS, for up to three academic years. Leaving the program ends that exception; an approved leave of absence does not. ([Federal Student Aid: loan limits and definitions from July 1, 2026](https://studentaid.gov/announcements-events/big-updates/definitions); [Public Law 119-21 (2025), Title VIII, §§81001 and 82001–82004](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm); checked 2026-10-21) - Schools may set lower program-wide federal limits than the law allows. ([Federal Student Aid: loan limits and definitions from July 1, 2026](https://studentaid.gov/announcements-events/big-updates/definitions); checked 2026-10-21) - Not measured: Nothing is published on how medical-school financial aid offices are evaluated or rewarded. Federal rules bar a school with a preferred-lender arrangement from sharing revenue with any lender. ## Who is paid for what - **U.S. Department of Education (Direct Loans).** Lends at a fixed rate set each year by statute, plus an origination fee deducted from each disbursement. ([Federal Student Aid: interest rates and fees](https://studentaid.gov/understand-aid/types/loans/interest-rates)) Not part of its role: Lending above the federal limits, or comparing its loans with private ones. - **Private student lender.** Earns the interest and fees stated in the approval disclosure, which federal rules require before the loan is made. ([12 CFR 1026.47, private education loan disclosures](https://www.consumerfinance.gov/rules-policy/regulations/1026/47/)) Not part of its role: Comparing its loan with federal loans, which carry income-driven repayment and PSLF. ## Costs that come later - Private loans to cover the gap above the federal limit → Residency, when payments come from a resident's salary and no federal income-driven plan applies to those loans — https://www.joinandwise.com/loans - Total federal borrowing toward the $257,500 lifetime cap → Any later graduate program, such as an MPH or MBA — https://www.joinandwise.com/loans#borrowing-limits - Federal loans first disbursed on or after July 1, 2026 (RAP or Tiered Standard only) → Repayment after training, and whether payments count toward PSLF — https://www.joinandwise.com/loans/repayment ## What is fixed and what moves - Federal annual and aggregate limits: Set by law. Higher Education Act §455(a), as amended by Public Law 119-21 §81001. ([Public Law 119-21 (2025), Title VIII, §§81001 and 82001–82004](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm)) - Federal interest rate: Set by law. Fixed for each academic year by the statutory formula. ([Federal Student Aid: interest rates and fees](https://studentaid.gov/understand-aid/types/loans/interest-rates)) ## Deadlines - A private loan offer: at least 30 days to accept after the approval disclosure, and until midnight of the third business day after the final disclosure to cancel without penalty; no money is disbursed before then — Set by law - A Direct Loan disbursement: the school's written notice gives a window to cancel all or part of it — Set by law - July 1, 2026: the limits apply to periods of instruction starting on or after this date — Set by law ## Tools - [Loan rules and limits](https://www.joinandwise.com/loans): Federal limits, plans and PSLF rules with statute citations. - [Loan repayment comparison](https://www.joinandwise.com/loans/repayment): RAP, IBR and Tiered Standard side by side. - [For medical students](https://www.joinandwise.com/stages/medical-students): Articles and the stage checklist. ## Questions ### The school's financial aid office - What is the full cost of attendance for each year, and how much of it does institutional aid cover? - Does the school set a lower federal borrowing limit than the law allows? ### A private lender - What payment does the loan require during residency, on a resident's salary? - Is there any payment option tied to income, and does interest accrue during training? - Is there a cosigner release, and on what conditions? ## Sources - [Public Law 119-21 (2025), Title VIII, §§81001 and 82001–82004](https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm) - [Federal Student Aid: loan limits and definitions from July 1, 2026](https://studentaid.gov/announcements-events/big-updates/definitions) - [AAMC FIRST, Debt, Costs, and Loan Repayment Fact Card, Class of 2025 (October 2025)](https://store.aamc.org/downloadable/download/sample/sample_id/652/) - [34 CFR 685.219, Public Service Loan Forgiveness](https://www.ecfr.gov/current/title-34/section-685.219) - [Federal Student Aid: interest rates and fees](https://studentaid.gov/understand-aid/types/loans/interest-rates) - [12 CFR 1026.47, private education loan disclosures](https://www.consumerfinance.gov/rules-policy/regulations/1026/47/) - [12 CFR 1026.48, acceptance period and right to cancel](https://www.consumerfinance.gov/rules-policy/regulations/1026/48/) - [FSA Handbook 2026–27, Vol. 4 Ch. 2, disbursing Title IV funds](https://fsapartners.ed.gov/knowledge-center/fsa-handbook/2026-2027/vol4/ch2-disbursing-title-iv-funds) Reviewed 2026-10-27; oldest source check 2026-10-21. General information, not legal, tax or financial advice. The site describes what the law and rules say; it does not say whether a clause is enforceable or what you should do.