Completing medical school takes dedication, discipline, academic rigor, and a significant financial investment – nearly 75% of people who complete medical school graduate with student loan debt. In fact, medical school graduates owe four times as much as other college grads on average.
As you begin your medical career, your medical student debt burden can feel overwhelming. However, with the right tools and planning, you can stress less about your medical student loan debt, freeing up your time and energy to focus on your career and patients.
Average medical student debt: the data
On average, students graduate from medical school with about $227,000 in student loan debt, including both graduate school and undergraduate pre-medical programs, the Association of American Medical Colleges (AAMC) reports. That figure breaks down into about $200,000 for medical school and $27,000 for premedical education.
While medical school is typically the start of a rewarding, lucrative career, it’s an expensive first step. According to the AAMC, the median cost of attendance (including tuition, fees, and health insurance) at medical school for the 2023-2024 academic year was $41,737 at a public university and $60,673 at a private university. Expenses add up quickly over four years of medical school, often leaving graduates with staggering six-figure medical school debt.
How do average salaries compare?
A doctor’s salary may offset their debts later in their career. However, during residency, you could typically expect to make a salary of around $60,000, with tiered increases as you move through each year of your residency. Residency may last up to seven years, in addition to 1-3 years of fellowship, depending on your specialty. It takes time and effort, during residency and beyond, to build a successful medical career.
On average, physicians make about $352,000 a year, according to Medscape. However, specializing could drastically increase your income in the long run. Primary care providers make $265,000 a year on average, and specialists make $382,000. Top earning specialties include plastic surgery ($619,000), orthopedics ($573,000), and cardiology ($507,000). On the lower-earning end of the spectrum are family medicine ($255,000), pediatrics ($251,000, and public health ($249,000).
Pursuing a high-paying specialty could make repaying medical school debt easier, but it isn’t your only option.
How to manage student debt
Managing high student loan debt while performing the intense work of a physician is no easy feat, especially during residency and training. Fortunately, a few resources and strategies could lighten the burden.
Student loan forgiveness programs
Physicians could be eligible for federal student loan forgiveness programs such as Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF).
Income-Driven Repayment
With an IDR plan, borrowers’ monthly loan payments are based on socioeconomic factors such as their current income level and family size. IDR plans may relieve new doctors’ monthly student loan burden during residency. While federal student loan forgiveness plans may not offer immediate, total relief from debt, they could make a difference in the long term.
Pursuing a high-paying specialty could make repaying medical school debt easier, but it isn’t your only option.
IDR Comparison Chart
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Applications for SAVE, other IDR plans, and loan consolidation are available on http://studentaid.gov. You can also submit a PDF application to your loan servicer by uploading it to your servicer’s website, or mailing it to them. Expect a delay in processing times. The Education Department recommends checking its website for updates – there is no processing time estimate available. |
|
Plan |
Monthly Payments |
Repayment Period |
Status |
|
SAVE (formerly REPAYE) |
- 5% of discretionary income for Undergraduate Loans
- 10% of discretionary income for Graduate Loans
- Weighted average for borrowers who have both
|
- 10 years for low-balance borrowers (less than $12,000)
- 20 years for only undergraduate loans
- 25 years for any Graduate Loans
|
Replaced REPAYE |
|
Income-Based Repayment (IBR) |
- 10-15% of your discretionary income (and your spouse’s if filing jointly)
- Never more than federal 10-year Standard Repayment Plan amount
|
20-25 years, depending on when you become a new borrower |
Remains available but borrowers cannot select plan after 60 payments on REPAYE that occur on/after July 1, 2024 |
|
Income-Contingent Repayment (ICR) |
The lesser of the following: - 20% of your discretionary income or
- What you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income
|
25 years |
Not accepting enrollments for current students; only available to future borrowers with consolidated Parent PLUS loans |
|
Pay as You Earn (PAYE) |
- 10% of your discretionary income (and your spouse’s if filing jointly)
- Never more than federal 10-year Standard Repayment Plan amount
|
20 years |
Not accepting new enrollments |
New IDR Plan Options
Saving On Valuable Education (SAVE) – SAVE replaced the Revised Pay as You Earn IDR plan in 2023. SAVE could lower physicians’ bills, especially during residency. Monthly payments equal 5% of discretionary income for undergraduate debt and 10% for graduate debt, including medical school.
Multiple legal challenges made by states to the Saving on A Valuable Education (SAVE) plan could impact implementation of key aspects of the plan. For the most up-to-date developments, visit studentaid.gov.
Public Service Loan Forgiveness (PSLF)
Through the Public Service Loan Forgiveness (PSLF) program, the US Department of Education offers total student loan forgiveness to borrowers who have worked in eligible government or nonprofit organizations while making 120 qualifying payments, typically while enrolled in an IDR program. Doctors who work in public hospitals or health organizations may be eligible for PSLF and could have their remaining student loan balance forgiven after ten years of qualifying payments.
Service-based loan repayment
Doctors may also consider service-based loan repayment programs, which offer forgiveness in exchange for public service in specific underserved areas.
National Health Service Corps (NHSC) Loan Repayment Program
Doctors who work in facilities located in Health Professional Shortage Areas for at least two years may qualify for up to $75,000 in loan repayment from the federal government.
Indian Health Service (IHS) Loan Repayment Program
Doctors and other medical professionals who agree to at least two years of service at certain facilities that serve primarily indigenous people may qualify for up to $50,000 in loan repayment.
Strategies for repayment
While loan forgiveness programs offer a long-term solution for medical school debt, a debt management toolbox should also include some measures to make paying down balances more manageable right now.
Interest makes all the difference for many borrowers – it’s crucial to keep interest in mind while developing a repayment strategy. The longer it takes to repay student loans, the more interest piles up. Repaying medical school debt may feel like one step forward and ten steps back. You could combat this by making sure payments have been applied to the principal loan first, not just the interest. To determine whether monthly payments have been bringing down the principal, check your monthly loan statement. Then, contact your loan servicer to ensure future payments reduce the principal balance first.
If you took out multiple loans to cover school, focusing on the loan with the highest interest rate first could help you save more in the long run. This strategy, called the avalanche method, reduces the amount of interest that accumulates over time. Incorporating medical school debt into your overall monthly budget may help make it less overwhelming.
Other management tools
A few additional tools could help you overcome bumps in the road to find freedom from medical student loan debt. Some employers, like hospital networks, may offer student loan debt repayment as part of their employee benefits package. Under the CARES Act and the Consolidated Appropriations Act, employers can offer up to $5,250 in student loan repayment assistance a year without tax implications for either party through 2025. Employers may offer student loan assistance through a sign-on bonus, payments directly to your lender, or as part of your retirement savings.
You may also consider refinancing your consolidating your student loan debt, depending on what types of loans you have.
Refinancing
Student Loan Consolidation
To refinance, you take out a new loan through a private lender who pays your existing loan. Refinancing aims to achieve more favorable terms, like a lower interest rate or a preferable repayment period. Your refinanced loan takes the place of the original loan. You could also use refinancing to combine multiple private or federal student loans. That way, you only have to manage one monthly payment and interest rate. If you have private loans, refinancing may be an effective pathway to relief from difficult payments. However, if you use a private lender to refinance federal loans, you risk disqualifying yourself from programs like IDR and PSLF, so it’s important to do your research before taking the leap.
Student loan consolidation refers specifically to combining federal Direct Loans into one. You can only consolidate federal student loans through the Department of Education or the Direct Loan Program. When you consolidate, you make one monthly payment to a single servicer. Consolidation often comes with a longer term, which could mean lower monthly payments, and it could potentially give you access to forgiveness programs you didn’t otherwise have. However, the interest rate is a weighted average of each individual loan, so you may end up spending more in the long run. Learn more about consolidating at studentaid.gov.
Don’t fear your medical school debt
While medical school debt is a fact of life for doctors and other medical professionals across the US, you don’t have to bear the heavy burden forever. By developing a plan to tackle debt early in your career, you could save yourself anxiety, time, and maybe even money further down the line. No matter where you are in your medical career, speaking with a knowledgeable expert could help you understand your options for managing your student loans. At Laurel Road, our team members understand doctors’ unique financial and professional trajectories. A student loan forgiveness consultation could help you take the next step toward freedom from medical school debt. Learn more about our tailored student loan solutions for doctors here.
Terms to know
PSLF
Public Service Loan Forgiveness, a federal student loan forgiveness program available to government and qualifying nonprofit workers.
IDR
Income-Driven Repayment, a federal student loan forgiveness program available to federal borrowers regardless of who their employer is.
SAVE
Saving on A Valuable Education, the newest IDR plan introduced in 2023 that replaced REPAYE.
NHSC Loan Repayment Program
The National Health Service Corps' loan repayment program, available to doctors who work in facilities located in Health Professional Shortage Areas for at least two years may qualify for up to $75,000 in loan repayment from the federal government.
IHS Loan Repayment Program
The Indian Health Service's loan repayment program, available to doctors and other medical professionals who agree to at least two years of service at certain facilities that serve primarily indigenous people may qualify for up to $50,000 in loan repayment.
Refinancing
To refinance, you take out a new loan through a private lender who pays your existing loan.
Consolidation
Student loan consolidation refers specifically to combining federal Direct Loans into one.
