Proposed PSLF Changes Threaten Doctor Access, Especially in Underserved Areas

⁤ Updated May‍ 25, 2025

A Republican budget ⁢bill currently under debate in ⁤Congress has ​sparked ​concern among medical students and physicians. The proposed legislation includes language that would exclude residency years from counting toward the⁣ Public Service Loan Forgiveness (PSLF) ‍program. ‌This program is a critical tool for doctors managing ‍medical student debt.

The PSLF program offers debt relief to medical professionals who commit to working in⁤ qualifying hospitals or clinics for 10 ⁤years while​ making 120 monthly loan ⁣repayments. For many, it is the only viable path to managing ​the average medical school ⁣debt, which⁤ exceeds $230,000.

Shannon Udovic-Constant, president of ‍the California ​Medical Association,‍ warned that ⁢the proposed changes would create new financial barriers, disproportionately harming low-income students at a time when the country urgently⁢ needs more doctors, especially in underserved areas.⁣ The potential impact on access to healthcare is ⁤a major concern.

The Department of​ Education is also holding public hearings to consider limiting which hospitals and clinics are eligible for PSLF.Currently, rural and⁢ community hospitals, Veteran Affairs health⁣ services, and most nonprofit and academic medical institutions qualify. Graduates can begin their ‌10-year commitment during residency.

Critics of ⁢the ‌proposed changes argue that ⁣making it harder ⁤for new doctors to use PSLF will⁤ discourage them‌ from choosing lower-paid specialties like primary care or pediatrics. ‌This could further reduce access to care in rural or underserved regions, exacerbating⁤ existing healthcare disparities.

Brittany Bruggerman, a pediatric endocrinologist at the University of​ Florida, shared her concerns on Facebook.She said she chose her specialty knowing she would qualify for PSLF. “If I thought I would have to pay ⁤back my $200k‍ of loans on my⁢ own… I may have made a different choice,” she wrote.

While the​ PSLF ⁣program has been an important lifeline for many, it ‌is not without its‍ flaws. Dimitri Koustas,an ⁣assistant professor⁤ at the Harris School of Public Policy,University ​of Chicago,noted that the program suffers from bureaucratic hurdles and⁤ a lack of clarity. He added that the proposed changes reduce rather than expand ​eligibility.

Audra McGeorge, communications director of the Republican-controlled House Committee on‍ Education & ⁢the Workforce, explained that the intent⁤ is ⁣to address what is ‌referred ⁣to as the “doctors’ loophole.” Supporters of the changes argue that residency ‌years should​ be considered part of doctors’ education, not employment.

The budget bill would allow ​physicians and dentists to defer loan payments during their residency years without accruing interest, based on the premise that residency is education, not employment. ‌McGeorge said this would benefit residents earning lower salaries. Currently, federal ⁢loan payments ‌can be deferred during residency, but in some cases, interest continues to accrue.

Jim Dahle, an emergency physician and the founder of The​ White Coat Investor, a personal finance site for doctors, said reducing PSLF’s benefits for medical students “could‍ have the⁤ effect of pushing indebted medical ⁣students away from academic practice ‍and away ⁢from lower paying specialties.”

Santoshi Billakota, a neurologist and epileptologist at wyckoff Heights in Brooklyn, NY, and⁤ the co-host of Be Empowered, a podcast offering financial advice for doctors, ‌said that having residency years no ⁢longer qualify⁣ for PSLF “would be​ a major blow.” She⁢ added,“PSLF was one of the few⁤ incentives encouraging new doctors to ⁣work in underserved ⁢or rural areas that often pay substantially less.”

Koustas’ research indicates that when the incentive of debt forgiveness is ⁤removed, people tend to leave ​their posts and gravitate toward⁤ higher-paying positions. This trend was observed during the Biden administration’s one-time adjustment that included payments ‍made outside⁢ of qualifying employment ⁢toward debt forgiveness.

Mary Flaherty, a neurologist enrolled in PSLF, shared her personal story. “it ⁢saddens me that other people from my background will not be able to access higher education ​to make our country better.‍ I would not‌ be where I ‌am today if it were not for federal student loans,” she said.

Austin Miller,an incoming resident in Physical Medicine and Rehabilitation at ⁤Sinai Hospital⁢ of Baltimore,wrote‍ in a comment to the Department of Education,”The PSLF program has been the only realistic path forward to both manage [my] debt and serve in a lower-paying but essential public sector role,such as practicing at the VA after residency.”

What’s ‍next

The budget bill is still under consideration in Congress, and the Department​ of education is continuing⁢ to hold public hearings on⁢ student loan ⁣program rules. The outcomes ⁣of these processes will determine the future of PSLF and its impact on access to healthcare in underserved communities. Medical students and professionals ⁤are closely monitoring these developments, advocating for policies​ that support their ability to serve where they are needed most.