But debt can still vary significantly from the average. To determine how much you might expect to spend on medical school, we’ll consider average student debt loads after graduation and how those numbers vary by institution. We’ll also look at how specialization impacts debt, average doctor salaries, and strategies for paying off loans once you graduate.
Average Medical School Debt
About 73% of medical school graduates had medical education debt (including pre-med debt) in 2019, according to the Association of American Medical Colleges (AAMC). Not surprisingly, debt was higher for graduates from private schools relative to those who graduated from public schools. But what’s interesting is that the difference in debt was much smaller than the difference in cost. The average debt was around $20,000 more for private school graduates, while the median cost to attend a private medical school for four years was about $80,000 more. With that said, you’re far more likely to be among those who graduate with significant debt if you attend a private medical school. While only 15% of public university graduates have debt of $300,000 or more, almost twice as many private university graduates (27%) have that much.
Average Debt by School
Where you attend school can have a significant impact on how much debt you graduate with. Not only can tuition costs vary widely, but housing is also a crucial consideration when it comes to debt. For example, someone who has the option to live at home could save tens of thousands of dollars compared to someone who must pay for on-campus or other accommodations. The following table includes average debt loads of graduates earning a first professional degree in medicine at different schools (debt often includes tuition, housing, food, books, and supplies). One-year tuition rates at each school are also provided for comparison to debt loads. But keep in mind that the cost to attend the school is only one piece of the puzzle; the financial aid package you’re offered (and the amount of aid that doesn’t have to be repaid) is crucial.
How Your Medical Specialty Can Affect Debt Payoff
After medical school, students enter a postgraduate training or residency program, which can range from three to nine years, depending on their field or specialty. And though, as a resident, you receive an annual stipend, the length of the specific residency program may impact how soon you can begin paying off debt. This is because stipends are far less than the average physician’s salary of $242,000, and could delay your ability to tackle overwhelming debt. According to an AAMC survey, stipends averaged $58,921 in 2020 for the first year of residency and climbed to $77,543 for the residents in their eighth year (for programs that require that many years). For example, an orthopedic surgeon may have the same medical school debt as a lower-paying specialty. However, they’ll probably need to complete four years of residency in orthopedic surgery and an additional one year in another, more general, practice area—for a total of five years. A pediatric physician would typically only have three years of residency and could start making larger student loan payments earlier. But education debt levels don’t vary much, no matter which specialty is chosen, according to the AAMC study. So, if you’re like most students, you won’t select (or avoid) specialties out of concern about debt.
Will I Make Enough Money To Pay for Medical School Debt?
In many cases, a physician’s starting salary will be near the amount of debt they graduated with, no matter which specialization is chosen. In other words, it’s likely that if you become a full-fledged doctor, you’ll have the means to repay your medical school debt. In fact, according to job search website Salary.com, entry-level physicians with less than one year of experience made, on average, $192,078 in 2021. That said, choosing to specialize can afford you the chance to repay a little faster. While primary-care physicians earned an average of $242,000 in 2020, specialists earned an average of $344,000, according to a 2021 survey of 17,903 doctors by the physician-targeted website Medscape.
Debt From Medical School vs. Other Healthcare Fields
On average, medical school grads face higher debt loads compared to other students who graduate with advanced degrees. But debt for healthcare graduates, in general, tends to be high. To get a sense of graduate medical school debt versus different types of healthcare education debt, compare the debt loads for a variety of healthcare professions:
How To Pay Off Medical School Debt
According to the AAMC, about 45% of all medical school graduates plan to enter a loan forgiveness or repayment program. Here are some options for repaying your debt.
Choose Loan Repayment Based on Income
Income-driven repayment plans may be available for your federal loans, such as Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). These plans may be based on your income, family size, and discretionary income, and may require that you qualify for partial financial hardship. Depending on the plan, you could finish payments in 10 to 25 years, with the remainder forgiven (any amount forgiven may be taxable). These plans lower your monthly payments, but the total you owe could increase over time due to interest.
Choose an Affordable Location
Living in an expensive urban area while practicing a lower-paid medical profession may require a long-term repayment plan or other trade-offs. If possible, choose an area with a lower cost of livingand explore a physician loan as an alternative to a traditional mortgage.
Pursue Loan Forgiveness
After about 10 years, students with Direct Loans (and a few other types) can pursue Public Service Loan Forgiveness (PSLF) if they work in government or a qualifying nonprofit. There are a few requirements—you must be on an income-driven repayment plan, make 120 qualifying payments, and jump through a few online hoops to verify your employment each year. The amount forgiven isn’t taxable. You can also look into state-sponsored forgiveness programs and armed-forces forgiveness and scholarship programs.
Consider Consolidating or Refinancing Your Loans
Combining your existing loans into one is called “consolidation.” Consolidating your existing loans could provide a lower monthly payment and a more extended repayment period. However, you may also receive a higher interest rate, give up your grace period and other federal loan benefits, and have a longer repayment period (and potentially pay more interest). If you refinance your student loans, you can lower your interest rate and thereby your payment. However, you may also forgo your grace period and other federal loan benefits, and have a longer repayment period. With either option, make sure the benefits outweigh the federal protections you stand to lose.
Pursue Discharge
Your payments for federally guaranteed loans may be canceled or forgiven in certain—and fairly extreme—circumstances, such as if:
you diesomeone committed loan fraud in your nameyou have a permanent disabilityyour school is shut down before you finish your med programyou file for bankruptcy and can prove “undue hardship”
In other words, discharge isn’t a promising approach to pay off medical school debt.
Pay While in School and Residency
Making partial or full contributions toward your unsubsidized loan interest—which accrues daily—can reduce your long-term debt even if you’re on a tight budget. Otherwise, your unpaid, accumulating interest will be added to the loan’s original amount, usually at the end of your grace period after graduation. Your total balance will increase, and then your lender will charge interest on that balance. As well, you can only take full advantage of the tax deduction on paid student loan interest while under the income threshold of $85,000, which you’ll probably exceed by the time you’re a working physician.
Strategically Manage Your Debt
Prioritize your highest-rate debt for repayment, even reducing payments to the minimum on the lower-rate debt so you have more cash flow for higher-rate debt. Ask your loan servicer if they offer a 0.25% interest rate deduction for automatic payments. Make voluntary payments to reduce the loan’s principal, if you can. Remember that a shorter repayment schedule will increase your monthly payments but decrease the total amount that must be repaid.
