The AF still fills. I haven't been interviewing applicants, but I've been told the applicant pool has changed over the last few years. What other's have said above doesn't really surprise me. We still do get good, highly qualified people, but my impression is less so than in the past. Some of that is cyclical or due to the business cycle/economy.
While I'm sure there are some cyclic characteristics, the macro trend is concerning. It's been concerning for a long time.
30 years ago, HPSP had significant numbers of people from Ivys and other top tier schools. That isn't the case any more. Now it's absolutely dominated by newer, very expensive DO schools. When was the last time you ran into a HPSP'er from Harvard?
Posters on this forum, wherever they fall on the pro/con spectrum, are universally in agreement that it is unwise to take HPSP for just for the money. But obviously, if you look at the trend of matriculants in the last three decades, taking it for the money is what is actually happening. If the military GME opportunities, circumstances of attending practice, or relative pay were on par with the 1990s we'd still have top schools well represented in HPSP. But they're not - the people who've been signing up for HPSP the last 15-20 years are mostly those who need to cover the outlandishly escalating tuition of a certain group of schools.
For this reason alone, HPSP is going to continue to fill. We saw in the ~2006 time frame, when Iraq was getting 'Nam-ish, when the program didn't fill, that the services immediately threw a bunch more money at the program (signing bonuses, increased stipends) and the program filled again. It's the money.
We can bark up the "don't do it for the money" tree all we want, but that's why people join.
As for still getting good, highly qualified people ... that trend has also been downward over the last couple decades. You can probably reasonably argue that the people we've been getting have been good enough. Anyone who gets into any medical school, anywhere, is definitely on the right tail of the overall bell curve of society. But we can't reasonably argue that the people we've been getting have been among the best. I probably don't need to rehash or compare the gpa/MCAT profiles of average matriculants at different schools. We all know that the expensive osteopathic schools without affiliated teaching hospitals are getting the students who couldn't get into state/public universities or the old allopathic privates, and we know where the fertile HPSP recruiting grounds are.