Public Service Loan Forgiveness has long been one of the few financial incentives pulling physicians toward the places that need them most: rural towns, urban cores, federally qualified health centers and lower-paying specialties such as family medicine and pediatrics.
Marc Hahn, DO, president and CEO of Kansas City (Mo.) University, said new federal borrowing limits are weakening that pull.
Under HR 1, medical students can borrow up to $50,000 a year and $200,000 total in federal loans for professional school. Students whose costs exceed those limits must turn to private lenders, and private loans do not qualify for the Public Service Loan Forgiveness program.
The shift matters because the program works only with federal loans.
“Private lenders do not participate in that,” Dr. Hahn said in an interview with Becker’s. “So with the government limiting their exposure, it also negatively impacts programs that incentivize physicians to go and practice in those underrepresented areas.”
Dr. Hahn, an anesthesiologist, has spent about 25 years in academic administration and has led Kansas City University for more than 13 years. The school operates two medical school campuses: its original campus in Kansas City’s urban core and a second, rural campus in Joplin, Mo., that also houses a college of dental medicine. Dr. Hahn said Kansas City University is the No. 1 producer of physicians for Missouri and the No. 2 producer for Kansas, and about half of its medical graduates go into primary care.
That mission puts the university squarely in the path of the policy change. A student who takes on private debt to finish medical school gives up the option of having those loans forgiven in exchange for years of service in a shortage area.
“So now they don’t qualify for that Public Service Loan Forgiveness, and that’s another disincentive for a medical student to choose to practice in an underserved area, or to go work at a federally qualified health center, or go practice in a specialty that’s underrepresented, such as family medicine or pediatrics or general internal medicine,” Dr. Hahn said. “So once again, another unintended consequence.”
The physician workforce already suffers from maldistribution, both geographically and by specialty, and Dr. Hahn said finances are sometimes the driver. A student may want to return to a rural hometown as a primary care physician, but “if finances make it such that they can’t make that decision, then small towns may not have a family physician, pediatrician or an obstetrician,” he said.
Dr. Hahn said students from rural communities and the urban core, first-generation students, veterans and those from historically underrepresented backgrounds are less likely to have access to credit. Kansas City University has reached out to eight or nine financial institutions on its students’ behalf and has secured loans for most students who need them, but interest rates range from 6% to 16% depending on credit risk.
“Kids coming from a single-family household or a single-parent household may be less likely to get a favorable interest rate for their loans than somebody that’s coming from a two-parent household where both parents are working in professional jobs,” Dr. Hahn said.
That gap has consequences beyond the balance sheet. Physicians who share a background with their patients bring context that affects the care itself.
“We know that patients do better when their physician has a similar background,” Dr. Hahn said. “Whether it’s a kid that grew up in the urban core or a kid that grew up in the rural part of the United States heartland, we know that those physicians are able to better relate to the patients that they’re caring for, and that means that we have improved outcomes.”
Dr. Hahn acknowledged that lawmakers likely had good intentions in capping graduate borrowing out of concern for student debt, since some graduate degrees can leave borrowers with balances that are difficult to repay. But he argued medical students are not that population. The default rate for medical students is routinely less than 1.5%, he said, and Kansas City University’s rate has stayed below 1% for the last 10 years.
“Students borrow the money, they get their education, and they go and they pay it back, and then they go into the practices that interest them, and they settle in the regions that they’re interested in as well,” he said.
Schools have also had little time to adjust. Dr. Hahn said the Education Department did not issue instructions on the new limits from the law’s passage in July 2025 until late spring of 2026, leaving institutions scrambling to anticipate what incoming students would need.
For Dr. Hahn, the result is measured in access. Patients already wait weeks for primary care and months for some specialists, and the loan caps threaten to widen the gaps where physicians are hardest to find.
“We know that it may take a month to see your primary care physician. It may take six months to go find a rheumatologist. And certainly, if you’re in a rural community, it may be impossible for you to see a physician in a reasonable distance or a reasonable time period,” he said. “These are all unintended consequences that are going to make our country sicker than it is today.”
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