Kansas City University is home to the fourth largest medical school in the U.S.by class size. However, president and CEO Marc Hahn is worried about students being able to afford classes after July.
Federal student loans have undergone massive changes under the Trump administration. Republicans’ massive tax and spending bill passed last July placed borrowing limits on graduate and professional degrees. This month, the Education Department gutted the Biden-era SAVE loan forgiveness plan.
“This is a full time effort for those students,” Hahn said. “They really don’t have the luxury of being able to take a part-time job to pay for some of their costs.”
The Education Department has narrowed the distinction between graduate and professional degrees to limit federal spending. Graduate degrees cover masters and doctoral programs such as nursing, physical therapy and social work. 11 professional degrees include medicine, law, pharmacy, dentistry, veterinary medicine, optometry, osteopathic medicine, podiatry, chiropractic, theology, and clinical psychology.
Under new legislation, graduate students earning a master’s degree will only be able to borrow a little more than $20,000 annually or $100,000 total. Professional students studying law or medicine can borrow $50,000 annually or $200,000 total. For context, a study by an education research group calling itself the Education Data Initiative shows that the average cost of medical school is a little less than $60,000 per year.
What’s more, these lifetime caps include undergraduate debt, meaning students who took out loans to get their bachelor’s degree have less they can borrow for grad school.
Chris Hicks is a senior policy advisor at nonprofit Protect Borrowers.
“We need those sorts of workers in all of our communities and that's why we need to advocate for a better higher education system that puts those people first,” Hicks said. “Not the student loan servicers and debt collectors.”
Rising costs can reflect in profession shortages.
There is a growing doctor shortage across the country. Missouri ranks in the bottom half of states for healthcare access. A study by the conservative Cicero Institute think tank shows 111 of Missouri’s 114 counties are health professional shortage areas.
Amidst loan restrictions, KCU is now forming relationships with private lenders to help students with finances. However, Hahn says private loans are not accessible to everyone and will not be able to fill the gap the federal government is opening.
“Kids from diverse backgrounds, kids that are first generation going to school, these are kids that may really have a difficult time borrowing money at a favorable rate,” Hahn said. “And if that’s the case, that may worsen the shortages in these communities.”
Graduate school is not the only facet of higher education facing cuts. The Education Department, in a joint settlement with the State of Missouri, ended the SAVE plan, leaving 7.5 million borrowers to transition into new plans.
Due to court battles, SAVE borrowers had been placed in a mandatory forbearance with accruing interest.
Abby Shafroth is the Managing Director of Advocacy at the National Consumer Law Center. Due to the timing of this decision, she thinks a lot of people will be caught off guard.
“If they're unable to pay, they'll start becoming delinquent which hurts the credit,” Shafroth said. “Ultimately if they're delinquent for nine months they default.”
When someone defaults, they’re ineligible for further student loans and can have their tax refund seized, salary garnished and can even get sued. Borrowers have limited repayment options for closing debt. Experts worry federal loan cuts in the midst of an affordability crisis will have consequences.
