The Ultimate Guide to Paying off Medical School Debt

Is Medical School Worth It?
Paying for Medical School
Medical School Loan Repayment Programs
Paying Down Your Medical School Debt
Frequently Asked Questions

Part I: Is Medical School Worth It?

Getting accepted to medical school is a major accomplishment, but graduating from medical school can be life-changing for your finances. According to The College Payoff , a collaborative study conducted by the Georgetown University Center on Education and the Workforce, individuals with a doctoral-level degree enjoyed median lifetime earnings of $3,252,000 in 2009 dollars. This figure compares favorably to degrees that require a smaller commitment of time and resources, showing that pursuing a medical degree can pay off.
Now on to the bad news. While earning more money over a lifetime is advantageous, there’s a notable downside to going to medical school. While doctoral-level degrees can pay off with a lifetime of higher wages, the costs of pursuing this degree can be astronomical.
As the Association of American Medical Colleges notes, the average indebted 2016 medical school graduate left college with a median medical school debt of $190,000. No matter how you cut it, that’s a lot of money to borrow and spend.

Medical school debt in the U.S.
The Association of American Medical Colleges shares statistics on average medical school debt. As of 2016, indebted medical school graduates left school with a median debt loan of $190,000. At public schools, the median debt load worked out to $180,000. Private medical schools, on the other hand, reported a slightly higher level of debt with a median debt load of $200,000.
The high levels of debt many medical school graduates endure are caused by myriad factors, including the rising costs of tuition. While average medical school tuition hasn’t been tracked since 2009, the price tag of a medical education was $29,890 that year.
In addition to the price of tuition, medical students need to pay for countless other expenses , some of which only apply to those in the medical field:

Room and board
Rent and utilities
Travel and transportation
Health care
Instruments and supplies
Lab fees
Test fees
Relocation for residency

Lifetime earnings for a doctor
While the costs of medical school are high, doctors’ higher salaries can take the sting out of the long-term costs. In 2016, for example, family and general practitioners earned an annual mean wage of $200,810, while physicians and surgeons earned $210,170, on average. Several medical specialties earned even more.
The following table highlights profitable medical careers alongside careers that require only a bachelor’s degree:

Is medical school worth the cost?
If you’re trying to decide between degree programs with varying costs and educational outcomes, it’s important to consider the ROI, or return on investment, for your education. While there’s no hard and fast rule to help you decide, figuring out your post-education monthly payment for medical school debt and comparing it to your potential salary can help.
As an example, the average medical school graduate with $190,000 in debt with a 6% interest rate would need to pay $2,109.39 per month toward their loans if they chose standard, 10-year repayment. According to the Bureau of Labor Statistics, however, the median weekly earnings for someone with a doctoral degree worked out to $1,664 in 2016 .
During a month with four weeks of paydays, a doctoral graduate would bring in $6,656 before taxes and $4,659.20 after taxes, considering a 30% tax rate. While a $2,103.39 payment represents nearly half of this person’s income, it’s only for 10 years. Further, the percentage of income will only decrease as their income grows. And if they choose a higher paying medical specialty, the difference could be even greater.
Also keep in mind that doctors don’t have to choose 10-year, standard repayment as there are plenty of other options available, including repayment plans that span up to 25 years. If the graduate with the same level of debt as above chose to repay their loan over 25 years at the same interest rate, for example, they would pay only $1,224.17 per month.

Part II: Paying for Medical School

Federal student loans are usually the first source of funding medical students turn to as they seek to finance their education. Several different types of federal student loans are available, and each has their own benefits, drawbacks and practical limitations. Federal student loans tend to be a good option for medical students since they offer relatively low, fixed interest rates and help students qualify for federal perks like income-driven repayment, student loan forgiveness programs, deferment and forbearance.

Pros of federal student loans:

Fixed interest rates that can be competitive
Access to federal loan repayment and student loan forgiveness programs
Qualifying for subsidized loans means the government may pay the interest on your loans during school
Access to student loan forbearance and deferment (if you qualify)
No credit check

Cons of federal student loans:

Caps on how much you can borrow
You may need to take out private loans once you exhaust federal loans

Private student loan debt for medical school
Private student loans are commonly used once medical students max out the amount of federal money they can borrow for school. These loans are offered through private lenders, which means their rates and repayment terms are not fixed by the government. As a result, they can vary greatly but may be lower than rates offered through government programs.

Pros of private student loans:

Interest rates may be lower than federal student loans
Loan limits can be high enough to cover the entire cost of medical school
Loan disbursement may be faster
You can shop around among lenders to find the best deal

Cons of private student loans:

You need good or excellent credit to qualify on your own
Without good credit, you may need a co-signer
Interest rates can be fixed or variable
Private loans do not offer federal student loan forgiveness, income-driven repayment, or federally sponsored deferment or forbearance
You may need to make payments or pay interest while still in school

When to consider private student loans:

You’ve maxed out on federal student loan amounts
Private loans offer a better interest rate
You don’t plan to take advantage of government programs when it comes to repaying your loans

Private student loan lenders to consider

Grants for medical students
Grants for medical school students are offered through the government, research facilities, corporations and institutions of higher education. Students can seek out information on available grants by asking their school’s financial aid office, searching the internet, or checking government resources that cover the medical field.
Here are some popular grants available to medical students:

National Institute of General Medical Sciences Grant

This Medical Scientist Training Program grant was created to assist students pursuing degrees in clinical and biomedical research. This program is offered at over 47 universities that help facilitate the grant.

Award amount: Amounts vary
Qualifications: Available to qualified M.D.-Ph.D. dual-degree students with a GPA of 3.0 or higher
Deadline to apply in 2017: Depends on the participating institution

Ford Foundation Fellowship Program

The Ford Foundation Fellowship Program seeks to increase diversity and offers grants to medical students pursuing a Ph.D. with the goal of participating in medical research or teaching. Other Ph.D. students are considered as well.

Award amount: $20,000 to $45,000, depending on the specific program
Qualifications: Medical students in pursuit of a Ph.D. can apply
Deadline to apply in 2017: Applications open in December 2017

Anne C. Carter Global Health Fellowship

This American Medical Women’s Association grant awards four AWMA student members every year. This two-year fellowship focuses on global health and includes a trip to Uganda.

Award amount: $1,000 to fund local project planning and subsidize experiential education in Uganda
Qualifications: Must be AWMA member pursuing a medical education
Deadline to apply in 2017: The next application cycle is Aug. 1, 2018, to Oct. 30, 2018

Research Medical Student Grant

This grant, which is offered through the Radiological Society of North America , was created for medical students considering academic radiology.

Award amount: $3,000 to be matched by a sponsoring department for a total of $6,000
Qualifications: Must be a full-time medical student and RSNA member
Deadline to apply: Feb. 1, 2008

Overseas Assistance Grants

This program , which is offered through the American Medical Women’s Association, is available to medical students and residents working in clinics around the world.

Award amount: Up to $1,000 in transportation assistance costs
Qualifications: Students must work in an off-campus clinic where the medically neglected will benefit, be an AMWA member in at least their second year of school, and must spend four weeks to one year serving the medically underserved
Deadline to apply in 2017: Applications are accepted Jan. 5, April 5, July 5 and Oct. 5

Scholarships for medical students
Scholarships are available to medical students from all walks of life and all backgrounds, although requirements vary based on the program. Medical students can seek out merit-based scholarships, institution-based scholarships and various other scholarships offered through research facilities and corporations.
Here are a handful of popular scholarship options for medical students:

Physicians of Tomorrow Awards

This grant, offered through the American Medical Association , doles out scholarships to medical students who meet certain criteria. The goal of this program is to reduce the debt burden on medical school students across the country.

Award amount: $10,000
Qualifications: Must be a medical student who is nominated by their school dean and approaching their last year of medical school
Deadline to apply in 2017: Nomination applications are available every fall

Herbert W. Nickens Award

The Herbert W. Nickens Award is available to third-year medical students who have shown proven leadership in the area of medical equality for all.

Award amount: $10,000
Qualifications: Must be a medical student who is nominated for excellence in leadership; checklist is available here
Deadline to apply in 2017: Applications due in April each year

Tylenol Future Care Scholarship

This scholarship is open to all students pursuing a service career in health care, including medical students considering any medical field.

Award amount: $5,000 to $10,000
Qualifications: Must be a medical student with at least one year of medical school remaining
Deadline to apply in 2017: Application opens at the beginning of May each year and closes at the end of June

Chinese American Physician Society

This scholarship is available to all medical students with financial need regardless of their gender, race or ethnicity. Applicants are judged on financial need, achievements, essays and community service records.

Award amount: $2,000 to $5,000
Qualifications: Must be a medical student who can demonstrate financial need and complete the application process
Deadline to apply in 2017: Applications for 2018 will open at the end of 2017

Harvey Fellows Program

The Harvey Fellows Program was created for Christian students pursuing higher education in important fields such as medicine.

Award amount: $16,000
Qualifications: Must be a student who identifies as Christian and attends service regularly
Deadline to apply in 2017: Application deadline is Nov. 1 of each year

Part III: Medical School Loan Repayment Programs

Income-driven repayment (for federal student loan debt)
Income-driven repayment programs allow medical students to pay only a percentage of their income toward their federal student loans for 20 to 25 years no matter how much they owe. These programs can be advantageous since they let medical students with large debt loads pay a smaller percentage of their income every month than they would with standard, 10-year repayment. Several different income-driven repayment programs are available, each with their own rules and benefits. The following table highlights each program and how it works:

Pros of income-driven repayment:

Pay a smaller amount of your income for up to 25 years
Have your student loan balance forgiven once you complete the program
Pay off your debts slowly and at your own pace

Cons of income-driven repayment:

You may have to pay income taxes on forgiven loan amounts
You may not qualify if you earn too much

Who is eligible?
These programs are available to graduates who have federal student loans and meet income requirements.
How to apply
You can apply for income-driven repayment programs using the U.S. Department of Education website .
Medical school loan forgiveness for doctors
There are numerous loan forgiveness programs available to doctors, each with their own criteria for applicants. Commonly, these programs offer loan forgiveness in exchange for service in a specific field or for a certain type of employer.
Some examples include:

Oregon Primary Care Loan Forgiveness Program offers up to $35,000 per year of forgiveness in exchange for one year of employment in rural Oregon.
The Minnesota Rural Physician Loan Forgiveness Program offers up to $25,000 per year for practicing physicians willing to work for a minimum of three years in rural Minnesota.

Who is eligible?
Since loan forgiveness programs vary in their details and requirements, you’ll need to read terms and conditions of applicable programs to determine if you qualify.
Is this option right for you?
If you are willing to relocate or know that a loan forgiveness program is already available in your area, then loan forgiveness programs offer a great way to earn a living while having part of your debt forgiven. For this option to be right for you, however, you have to be willing to meet special program requirements such as working in an urban, rural or underserved community.
National Health Service Corps Loan Repayment Program
This program offers loan repayment assistance for individuals entering qualified health care careers in medical or dental fields. Licensed health care providers may earn up to $50,000 of tax-free loan forgiveness for a two-year commitment to NHSC-approved employment in a high-need area.
Who is eligible?
Medical graduates who agree to work in an NHSC-approved career for at least two years may qualify for this assistance.
How to apply
Contact the National Health Service Corps or visit the NHSC website for tips on the application process.
Is this option right for you?
If you’re willing to work in an area of high need after you graduate, this program may work well at the beginning of your medical career.
U.S. military loan repayment programs
United States Army
Army Student Loan Assistance offers up to $45,000 per year in loan assistance, along with a monthly stipend of up to $2,000. This assistance is available to U.S. residents working to complete an accredited residency.
The U.S. Army also offers up to $120,000 to pay down medical school debt in exchange for three years of service.
Lastly, the U.S. Army offers a Health Care Professionals Loan Repayment Program that provides up to $250,000 for repayment of “education loans for physicians in certain specialties who are serving in an Army Reserve Troop Program Units, AMEDD Professional Management Command, or the Individual Mobilization Program.”
How to apply
For additional information, contact your local Army recruiter, call 1-800-USA-Army, or visit
United States Navy
The Navy Student Loan Repayment Program offers up to $65,000 in repayment assistance, depending on your loan amount and year in school. Eligible applicants serve in the U.S. Navy and have federal student loans.
You may also qualify for the U.S. Navy’s loan forgiveness and repayment program , which offers up to $40,000 per year in loan assistance before taxes. You must be a final year medical student ready to join the U.S. Navy.
Lastly, the Navy Financial Assistance Program offers up to $275,000 in loan repayment assistance plus a monthly stipend to medical residents who agree to serve in the U.S. Navy. Physician sign-up bonuses may also be available.
How to apply
Contact your local Navy recruiter or visit the Navy Recruiting Command website .
United States Air Force
The Air Force Health Professions Scholarship Program offers up to $45,000 per year plus a monthly stipend up to $2,000 for medical students who join the U.S. Air Force and serve their country as a medical professional. Once you complete your residency, you’ll have a one-year obligation for each year you participate in the program plus one extra year.
How to apply
Contact a U.S. Air Force recruiter for more information, or visit the U.S. Air Force application page to apply.
State-level loan repayment programs for doctors

Part IV: Paying Down Your Medical School Debt

While the very idea of medical school debt could have you feeling overwhelmed, it’s important to understand the many options available when it comes to paying off your loans sooner rather than later. In addition to paying off your loans faster, some strategies can help you save money on interest or secure a more manageable monthly payment.
Here are some tips that can help as you pay down medical school debt:
#1: Refinance your student loans to a lower rate.
Refinancing your student loans to a new loan product with a lower interest rate and better terms can help you save money and possibly even lower your monthly payment. With a lower interest rate, you’ll save money on interest each month, which could help you save money and pay off your loans faster, provided you keep making the same monthly payment.
Keep in mind, however, that there are notable disadvantages that come with refinancing federal loans with a private lender. When you refinance federal loans with a private lender, you lose out on special protections afforded to federal loan borrowers like deferment and forbearance. You also disqualify yourself from federally sponsored income-driven repayment and loan forgiveness programs.
Recommended lenders for refinancing your medical school loans

Lender Transparency Score Max Term Fixed APR Variable APR Max Loan Amount  

Years 3.35% - 7.125%
Fixed Rate * 2.815% - 6.740%
Variable Rate * No Max
Max Loan

Years 3.35% - 6.39%
Fixed Rate 2.81% - 6.19%
Variable Rate No Max
Max Loan

Years 3.35% - 6.74%
Fixed Rate 2.80% - 6.73%
Variable Rate No Max
Max Loan

Years 3.25% - 7.26%
Fixed Rate 2.67% - 6.06%
Variable Rate $125k / $175k
Max Loan

#2: Find ways to save on monthly expenses.
While graduating from medical school can be a momentous occasion, you can put yourself in a better financial position by living a modest “student” lifestyle as long as you can. Ways to save money include, but aren’t limited to, finding a roommate to share living expenses, skipping pricey dinners out, living without cable television, driving your older car as long as you can, and preventing lifestyle inflation as you start earning more.
#3: Pay all of your monthly payments on time.
Federal Direct Loans and some private lenders offer interest rate discounts after you complete a specific number of on-time monthly payments. Check with your lender to see if they offer this option. If not, you should still make on-time monthly payments to avoid late fees and keep your loans in good standing.
#4: Pay extra toward the principal of your loans.
If you don’t want to go through the trouble of refinancing, you can still pay off your loans faster by paying more than the minimum payment on your student loans each month. Throwing extra money at the principal of your loans reduces the amount of interest you owe with each passing month, helping you save money while paying off your loans faster.
#5: Pay interest while in school.
Some medical student loans let interest accrue while you’re still in school. If you have the financial means to make interest-only payments while you’re still in school, doing so can help you prevent your student loan balance from ballooning before you graduate.

Frequently Asked Questions

Can I save money by choosing a different school?

Tuition at medical schools is not fixed, meaning it can pay to shop around before you choose an institution. Private schools tend to be more expensive than public schools as well, meaning you can usually save money if you decide on a public education for your medical degree.

How much money can I save by refinancing my medical school loans?

The amount you can save depends on your current interest rate and your new loan rate and its terms. To find out how much you could potentially save by refinancing, enter your old loan and new loan information in a student loan calculator.

What is the best way to lower the monthly payment on my student loans?

You can lower the payment on your student loans in a few different ways. First, you can refinance your student loans into a new loan product with a lower interest rate or longer repayment timeline. Second, you can choose an extended repayment plan or even income-driven repayment.

What are the advantages of maxing out federal student loans before turning to private loans?

Federal student loans come with important federal benefits and protections such as deferment and forbearance. They also leave you eligible for income-driven repayment plans and federal loan forgiveness.

What is the best way to find the best student loan for my needs?

As you shop for student loans for medical school, remember that the terms of your loan can make a big difference in how much you’ll pay over time. Compare loans based on the interest rate, any applicable fees, and the monthly payment amount you’ll need to make. You can also check student loan providers’ profiles with the Better Business Bureau and read student loan reviews for even more insight.