New federal loan caps: Resources for osteopathic medical students who are navigating funding gaps

The U.S. Department of Education recently amended Title IV of the Higher Education Act (HEA) of 1965 to establish new, lower loan limits for graduate and professional students using federal student loan programs. This is affecting many osteopathic medical students as federal direct unsubsidized loans are now capped at $50,000 a year, and $200,000 total, with a lifetime loan cap of $257,000 for medical school students.

Also, another amendment sunsetted the federal Grad Plus program, which had previously allowed borrowing up to the cost of attendance.

Both amendments became effective on July 1.

A Medscape article on the new limits notes that medical schools and medical student associations have taken steps to help students; these include reaching out to inform students of the new limits, boosting scholarship funding and creating new partnerships with lenders.

According to the American Association of Colleges of Osteopathic Medicine (AACOM), the average four-year total cost of attendance at a U.S. college of osteopathic medicine (COM) in 2025 was $385,260, averaging to $96,159 yearly. AACOM, along with the American Association of Medical Colleges (AAMC), is working to keep students informed and help them find alternative funding.

“This does leave a massive gap for most students,” said Brandon Barfield, the founder and executive director of Student Loan Professor (SLP), a student loan advisory company that offers discounts to AOA members. “Some schools have rolled out scholarships or increased funding for LDS (loans for disadvantaged students) or primary care loans. But most students are having to take out private loans to fill the gap left by the new $50k federal borrowing limit. In the current marketplace the interest rates on these private loans are just as good, and sometimes even better, than federal rates. On the back end, however, the repayment and forgiveness options are fewer and more costly.”

Barfield cautions borrowers who use private lenders to shop around every year to find the best deal.

“We want borrowers to understand what they’re getting into,” he says. “We highly recommend loan-shopping once per year, leading into the new academic year.”

How to find the right private loan

There are a few different ways students can shop around for loans:

• Try the lenders on your COM’s preferred lender list.
• Try the lenders on SLP’s preferred lender list.
• Use web searches to identify lenders who have loan products specifically for medical students (with deferment options during training).
• Check rates with a soft credit pull; most lenders will allow this, and it does not impact your credit score.

Thinking ahead to repayment

Borrowers will also want to look ahead to what repayment will look like after graduating, Barfield notes, adding that 2027 and later grads now have a 25-year standard repayment plan for their federal loans. For a medical graduate with the average amount of debt, monthly payments on this plan will be over $2,000. Most residents will need to either transition to an income-driven repayment (IDR) plan or forbear their loans until they are done with residency.

Current DO students can make flat payments on their medical school loans during school, Barfield says, noting he has been advising most borrowers to go those route if they can. The payments are often standardized at $25 per month and cause the loan to stay in repayment status throughout schooling instead of deferment. Doing this will reduce the interest loans accrue during medical school.

Help navigating funding gaps

The DO has assembled the list below to share loan options, scholarship information and financial literacy tools with affected osteopathic medical students.

AOA

The AOA has many financial resources for DOs and students.

• Student Loan Professor: SLP offers free loan refinancing assistance, and has promotions available throughout the year.
• SoFi offers AOA members a 0.25% rate discount when refinancing student loans through SoFi. SoFi offers a $250 bonus on new loans, which can cover tuition and other costs of schooling including room and board, books, supplies and transportation.
• KeyBank: To help with recent funding gaps, AOA members have access to a complimentary 30-minute student loan consultation with a KeyBank student loan expert, who will offer personalized guidance and answers tailored to their unique situation.
• Huntington: Huntington offers both AOA and its Student Osteopathic Medical Association (SOMA) members access to PhysicianLoans, designed to support home financing for medical students and DOs.
• American Osteopathic Foundation (AOF): AOF offers several scholarships and grants to osteopathic medical students; details are on AOF’s website.

SOMA

Financial resources available for SOMA members include the following:

• SOMA Foundation: The SOMA foundation provides scholarships, grants and other forms of philanthropic support. This funding is available for osteopathic medical students and has application cycles in the fall and spring.
• Financial literacy workshop: National SOMA and Panacea hosted a financial literacy workshop in 2025 that included advice on navigating student loans, in addition to other financial planning topics. The recording is available on the main SOMA site.
• Juno: This free service with a grassroots organization uses collective negotiation to assist members in getting lower interest rates and provides DO-specific loan options, as well as greater flexibility and guidance on loan options. There are also other benefits, like automatic residency deferment and multi-year eligibility. 
• Panacea Financial: Panacea offers SOMA members 0.25% interest rate discounts on Panacea PRN personal loans to offset costs related to applications, licensure and board exams, among other eligible items. SOMA members can also get access to a private banker and 24/7 live service for guidance.
• Huntington Bank: Huntington offers SOMA members (and AOA members!) access to PhysicianLoans, which are designed to support home financing, in addition to scholarships to support SOMA students.

AACOM

On Aug. 13, AACOM announced a partnership with Sallie Mae, which will allow AACOM-referred students access to Sallie Mae’s medical school loans. These offer competitive interest rates, no origination fees, financing for up to 100% of the cost of attendance, multiple repayment options and an extended grace period. It also includes financing for eligible expenses related to residency and the costs associated with travel, moving and other expenses, as well as dedicated student and school support, financial wellness resources and U.S.-based loan servicing.

In addition, eligible AACOM-referred borrowers may receive a 0.50 percentage-point interest rate reduction for the life of the loan after making 12 consecutive on-time payments of the billed principal and interest amount. Combined with Sallie Mae’s 0.25 percentage-point auto-debit interest rate reduction, eligible borrowers may qualify for a total rate reduction of up to 0.75 percentage points. The AACOM on-time payment benefit is available on both the Medical School Loan and the Medical Residency and Relocation Loan for students who apply through AACOM’s designated application link, directly connected to Sallie Mae.

AAMC

In conjunction with ELFI, a division of SouthEast Bank that specializes in private student loans and refinancing, AAMC recently announced a collaboration with the MedLoans borrower benefit program. The joint venture aims to support medical students facing urgent education funding gaps, and will originate loans through its EdMed loan product.

Related reading:

Navigating medical school debt: A guide to loan repayment options

Unexpected costs in med school: How to anticipate and plan for them