At a Glance
If you’re considering a career as a doctor or other physician, you may be concerned about the cost of medical school and the amount of debt you’ll incur as a result.
This is a genuine concern for many students. The total education debt among medical school graduates each year totals about $4.39 billion, and the average medical school grad owes more than six times as much in educational debt than an average college student.
While that debt may be worth it if you get the post-medical school job and salary you’re looking for, it can also be a huge burden when starting the rest of your life.
Paying off student loan debt can feel overwhelming, but there are things you can do to pay it off and become debt-free. In this article, read more about:
What is the average medical school debt?
The average medical student graduates with about $241,600 in total student loan debt. Excluding premedical undergraduate and other educational debt, the total is about $215,900.
In fact, between about 73% of medical school graduates have educational debt, and 55% of medical school students use loans specifically to help pay for medical school (as opposed to undergraduate or premed).
Some other facts about medical school debt and those who have it:
- The average debt increased 177.7% over the past 15 years.
- If debt continues to outpace the cost of attendance, the average medical student debt will exceed $300,000 by 2024.
- The average physician will ultimately pay between $365,000 – $440,000 (on average) for educational loans plus interest.
- The minimum monthly payment for the average medical school grad (to pay off debts within 10 years) is $2,480.
Those who attend public medical school owe about $2,000 less (on average) than private medical school, even though the cost of private school can be significantly higher. This may be because private schools offer more scholarships and grants than public schools, which is something to keep in mind when applying.
To get an idea of how much the average medical school debt would cost you, you can use a debt payoff calculator to estimate potential costs, including the loan amount, interest paid, and average monthly payments.
Average interest rates on loans for medical school
There are primarily three types of loans, each with different interest rates. Graduating medical students may have one, two, or all three types after they graduate:
|Type of Loan||Average Interest Rate (from 2010-2022)||Maximum Available to Borrow|
|Direct Subsidized and Unsubsidized Loans (undergraduate)||4.32%||Between $5,500 and $12,500, depending on your year in school and dependency status|
|Direct Unsubsidized Loans (graduate)||6.02%||$20,500|
|Direct PLUS Loans||7.05%||Cost of attendance, minus other financial aid received|
Private loan rates can be either fixed, meaning they won’t change over the life of the loan, or variable, meaning they can change throughout the years. Rates can start as low as 1.49% but reach 13% or higher.
There are some private loans specifically for medical students, such as the College Ave Medical Student Loan or Ascent Medical Student Loan. Those rates can vary, and some may have a minimum credit score requirement, but exploring all your options can help ensure you’re getting the best loan and interest rate possible.
How to pay off medical school debt
The average physician’s salary in 2020 was about $243,000, while specialists earned an average of $346,000, so you may be able to pay off debt faster than those in other industries. However, your ability to pay off medical debt, and how fast you’re able to do it, can depend on your specific field or specialty.
For example, you may have to enter postgraduate training or a residency program, which can add additional years to your training that you won’t be making a full salary Or, you may fall into the entry-level physician salary (with less than one year of experience) and make a lower average salary.
Once you’ve graduated from medical school, you’ll likely need to start repaying your debt within a few months. There are a few different strategies and options for paying off debt including:
- Choosing a different repayment plan. If you have federal loans, you may be eligible for income-driven repayment plans based on your income, family size, discretionary income, and meeting requirements to qualify you for partial financial hardship.
Examples include the Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). Depending on the plan you choose, you can make payments over 10 to 25 years, with the remainder forgiven. Not only can this lower your monthly payments, but it could also decrease the amount you owe over time due to savings on interest.
- Pursuing Public Service Loan Forgiveness (PSLF). You may qualify if you are employed by a U.S. federal, state, local, or tribal government or not-for-profit organization. This program forgives the remaining balance on your Direct Loans after you’ve made 120 qualifying monthly payments under a qualifying repayment plan, while also working full-time for a qualifying employer.
- Refinancing your loans. Depending on your credit, you may qualify for lower interest rates, which could help you pay less over time and pay off your debt faster. It may also reduce your payments.
- Consolidating your student loans. Ideally, this would also be at a lower interest rate, while also giving you only one debt to manage instead of multiple different student loans.
- Using a DIY debt payoff method, such as debt snowball or debt avalanche methods, to repay your debts over time and hopefully eliminate them as quickly as possible, saving you money on interest in the long-term and getting you debt-free faster.
- Repaying while in school. Interest on unsubsidized loans accrues daily and starts immediately, so if you can start paying partial or full contributions to that interest, it can reduce the amount of debt you’ll have long-term.
Remember that how much you have to pay off depends on:
- The interest rate on your loans.
- How long it takes you to pay your loans back, since the longer it takes to repay them, the more interest will accumulate, and the more you’ll end up having to pay off.
- Whether you qualify for any type of loan forgiveness or lower refinancing or consolidation rates.
Commonly asked questions
How long does it take to pay off medical school debt?
How long it will take to repay your medical school debt depends on a number of factors, such as your repayment plan, income, whether you qualify for assistance or forgiveness, and how much debt you have in total. The standard repayment term for federal student loans is 10 years, but you may qualify for extended repayment up to 30 years.
Is medical school worth the debt?
Most of those who’ve graduated and started their careers will agree that medical school is worth it, though it can depend on your salary after school and your specific specialty or field. Some physicians make more than others, making it easier to pay off their debts faster. According to some studies, doctors rate their career happiness in the top 35% of careers and are either “extremely satisfied” or “very satisfied” with their jobs.
What happens to medical school debt if you die?
If you die, all of your federal student loans will be discharged, meaning no further payments are required. If you have a Parent PLUS loan and the parent borrower dies or the student on whose behalf the parent took out the loan dies, the loan is also discharged. Your surviving family member must apply for loan discharge and submit proof of death to your loan servicer.