College Funding in 2025-26: OBBBA Loan Changes

Paying for college is never simple, and for physicians, it’s often one of the largest financial commitments you’ll make before retirement. Between your own student loan history, complex compensation, and competing savings goals, even small policy changes can have a big impact.

This year, a new federal law, the One Big Beautiful Bill Act (OBBBA), reshapes how families borrow for college starting in the 2025-26 school year. A recent PayForED article highlighted the technical details, but at Your Planning Partner, we want to translate that complexity into clear strategies for physicians and their families.

Here’s what the changes mean for you, and how to plan smarter.

OBBBA Loan Changes: What’s Actually Different for Physician Families

→ Borrowing limits are lower. Starting July 1, 2026, students and parents together can borrow about $92,000 total over four years from federal loans. That may only cover a single year at many private universities.

→ Private loans step in sooner. With lower federal limits, families will need private loans earlier. These require full underwriting: credit, income, and existing debt are all factors. High-earning physician families may qualify, but rates will vary.

→ Repayment options shrink. Students borrowing after July 2026 will have only two repayment paths (fixed or income-driven). Parents lose access to income-driven repayment and even PSLF for loans originated after that date.

→ Graduate and professional students face higher costs. Grad PLUS loans are eliminated, leaving future medical, dental, and law students with much greater private borrowing requirements.

Why OBBBA Loan Changes Matter for Physicians

For physician families, these changes go beyond tuition.

They directly affect your overall financial plan.

→ Your own debt counts. Existing physician student loans or practice debt could impact your child’s private loan approvals and interest rates.

→ Sibling planning matters. Borrowing for one child may increase costs or limit access for the next.

→ Retirement trade-offs grow. Tuition funding may conflict with saving for your retirement goals, like Roth IRAs or 403(b)s.

→ Forgiveness opportunities may vanish. If you work in nonprofit healthcare, missing the pre-2026 borrowing window could remove PSLF options.

YPP Pro Tip: Treat your child’s education funding like a multi-year treatment plan. You need to map out all four years (and future siblings) to avoid costly surprises.

A Real Example: The Cost of Waiting

Let’s say a physician couple has twins starting college in 2026 with tuition of $60,000 each per year.

Old rules: The family could borrow up to the full Cost of Attendance using federal loans.

New rules: They’ll cap out at ~$92,000 over four years. That leaves $388,000 to be covered by savings, income, or private loans – with higher rates and stricter underwriting.

This is why early planning is critical. Waiting too long could add hundreds of thousands in costs.

How Physicians Can Prepare for 2025-26 College Bills

→ Review existing Parent PLUS loans. Lock in borrowing under the old rules before June 30, 2026, if eligible.

→ Run the full four-year numbers. Don’t stop at freshman year – calculate the entire cost of a degree for each child.

→ Consider sibling impact. Debt for your first child will influence private loan rates for the next.

→ Explore savings tools. 529s, investment accounts, and even moonlighting income for physicians can help offset costs.

→ Plan ahead for graduate school. Future med, dental, and law students will face stricter borrowing caps.

→ Integrate with retirement strategy. Align tuition funding with your retirement savings strategy for doctors to avoid sacrificing long-term security.

→ Work with a financial planner. Physician finances are unique. Professional guidance can help balance tax planning, loan strategy, and investment goals.

The Bottom Line

The OBBBA loan changes may sound technical, but they represent a major shift in how physician families pay for college. With lower federal limits, more reliance on private loans, and fewer repayment options, the old “figure it out later” approach might not work.

At Your Planning Partner, we specialize in financial planning for doctors. We’ll help you design a college funding strategy that works alongside your career income, retirement plan, and long-term wealth goals.

Don’t let loan changes derail your child’s education or your retirement. 

Book your consultation today and get a strategy that works for your whole financial picture.

Frequently Asked Questions About Paying for College in 2025-26

What are the new federal student loan limits for 2025-26?

Starting July 1, 2026, federal borrowing for dependent students and parents will be capped at about $92,000 over four years, compared to previous limits that covered the full Cost of Attendance.

How do OBBBA loan changes affect physicians and their families?

Physician families may need to rely on private loans sooner, with stricter credit requirements. Existing debt and income can affect rates, making planning critical.

Can doctors still qualify for Public Service Loan Forgiveness after 2026?

Yes,if loans are originated before July 1, 2026. Parent PLUS loans taken after that date will not be eligible for PSLF, and repayment options will be limited.

What’s the best way for physician families to prepare now?

Plan early. 

Review current loans, run the full four-year tuition costs, consider sibling impact, and integrate college funding into your broader financial planning for doctors.