WASHINGTON, D.C. — A new federal student loan system under the One Big Beautiful Bill Act is set to take effect on July 1, 2025, prompting lawsuits from state attorneys general and health professional associations. The changes cap federal graduate loans at $20,000 per year and professional education loans at $50,000 annually, while also ending the Grad Plus federal loan program.

The Department of Education categorized most physician assistant programs as graduate programs, not professional programs, which means they are subject to the lower $20,000 loan cap. The median cost for physician assistant training is $103,000 for up to 27 months. For example, the State University of New York Downstate charges over $58,000 for in-state physician assistant students and $113,000 for out-of-state students.

In May, a coalition of 24 Democratic attorneys general, one non-partisan attorney general, and two governors sued the administration, seeking a permanent injunction against the implementation of these student loan changes. Separate legal action followed in June, when nursing associations, the American Academy of Physician Associates, and the PA Education Association filed a lawsuit requesting an immediate injunction against the changes. A federal judge in Washington heard arguments in the case.

Todd Pickard, president of the American Academy of Physician Associates, stated that physician assistants "got swept up in this big net without any real analysis and decision-making." He also noted a perceived contradiction between the administration's stated goals and the loan changes: "On the one hand, you have the Trump administration saying we need more PAs and we need them to be doing good work and the work that they can." The American Academy of Physician Associates represents more than 200,000 physician assistants nationally. Col James Jones, a physician assistant, holds the role referred to as the government doctor and is the first physician assistant to fill that position.

Sara Fletcher, executive director of the PA Education Association, said that tuition costs "are set by institutions." She described the issue as "a bigger system issue than just a PA program."

Why It Matters

The impending changes to the federal student loan system by the Department of Education would alter financing options for students pursuing graduate and professional degrees, particularly impacting physician assistant programs. The new loan caps and the elimination of the Grad Plus program could lead to challenges in covering the full cost of education, potentially affecting the number of future healthcare providers. The lawsuits filed by state attorneys general and professional associations indicate a legal challenge to these changes before their July 1, 2025, effective date.

The contrast between federal graduate loans, which currently have an average interest rate of approximately 8%, and private student loans, which can have interest rates ranging from 3% to 17.95%, illustrates financial factors for students. Congress ended the previous system of reliance on private lenders for student loans in 2006. Physician assistants are able to prescribe medication, conduct physical exams, interpret diagnostic tests, and perform some procedures. Approximately a quarter of physician assistants work in rural settings, and ten Republican-led states employ more physician assistants than doctors.