It’s no secret that medical school is expensive. According to the Association of American Medical Colleges, the average medical school debt for 2021 graduates was $203,062.

If you’re considering medical school or you’re already in the thick of it, it’s important to understand what to expect from the financing process and what your options are for debt repayment and reduction.

What is the average medical school debt?

The average student loan debt for doctors and other medical school graduates is $203,062.

Here are some more details about the average debt after medical school:

  • Seventy-three percent of graduates have med school debt.
  • Nearly 1 in 5 medical school graduates have more than $300,000 in student loan debt.
  • The median pre-med school debt is $27,000.
  • Medical school graduates also have other debts, including a median of $4,000 on credit cards and a median of $10,000 in residency and relocation loans.

What are the average interest rates on medical school loans?

If you have federal student loans, interest rates are updated annually. Private student loans, on the other hand, typically offer a range of interest rates, which depend on your creditworthiness (or your co-signer’s).

For the 2021-22 school year, the interest rate on Direct Unsubsidized Loans for graduate students is 5.28 percent. Direct PLUS Loans — used for graduate and professional students — have an interest rate of 6.28 percent.

Right now, private student loan interest rates range from 1 percent to 13 percent, depending on the lender and your creditworthiness.

Most student loans accrue interest while you’re in school, even if you elect not to make payments. The interest will compound if you choose to continue that deferral through residency. Once you’re ready to make payments, the lender will capitalize the interest, adding it to your principal balance and increasing your monthly payment.

How long does it take to pay off medical school debt?

The standard repayment term for federal student loans is 10 years. If you have a hard time keeping up with your monthly payments, though, you can extend your repayment schedule to up to 30 years with alternative repayment plans:

Repayment Plan Repayment Term
Consolidation Loan Up to 30 years
Extended Up to 25 years
Pay as You Earn 20 years
Revised Pay as You Earn 20 or 25 years
Income-Based 20 or 25 years
Income-Contingent Up to 25 years

Private student loan companies set their own repayment terms, but most private medical school loans will allow you to choose terms from five to 20 years. Of course, you can always refinance your loans to new terms, extending the payoff period. How long it takes you to repay your medical school debt ultimately depends on your salary and other expenses.

How do I reduce my medical school debt?

You may find it difficult to work even a part-time job while in medical school, so you may need to rely on scholarships and grants to reduce your reliance on debt to get you through college.

However, once you finish school, you’ll have a few different options to reduce your student loan balance or at least the amount of interest you pay on the debt.

Student loan forgiveness programs

The federal government offers student loan forgiveness to borrowers who work for a government agency or eligible not-for-profit organization. To qualify for the Public Service Loan Forgiveness program, you’ll need to work full-time for an eligible employer while making 120 qualifying monthly payments.

Once you’ve completed all of the requirements, your remaining debt will be forgiven.

You can also achieve forgiveness by getting on an income-driven repayment plan and completing the repayment term. After 20 to 25 years of payments, your remaining debt will be forgiven.

Student loan repayment assistance programs

Federal agencies and state governments offer a variety of student loan repayment assistance programs. These programs aren’t technically forgiveness programs, because the benefit doesn’t come from the lender, which is the U.S. Department of Education.

However, depending on the program, you could get tens of thousands of dollars in repayment assistance. The Association of American Medical Colleges maintains a list of state and federal programs you may be able to take advantage of.

One thing to remember is that these programs typically only assist borrowers with federal loans. If you have private medical school student loans, they may not be eligible.

Student loan refinancing

Student loan refinancing is the process of replacing one or more existing loans with a new one through a private lender. Depending on your income and credit history, you may qualify for student loan refinance rates that are lower than what you’re currently paying, which can save you money and reduce your monthly payment.

You’ll also have the opportunity to shorten or extend your loan repayment term — lenders typically offer terms ranging from five to 25 years.

Note, however, that if you have federal loans, refinancing may not be the best option if you’re working toward forgiveness, a repayment assistance program or an income-driven repayment plan.

Is medical school worth it?

Ultimately, it’s up to you to decide whether the cost of medical school is worth it. According to the Bureau of Labor Statistics, the median salary for physicians and surgeons is $208,000 or more, so this high salary could offset the high costs of a degree.

Of course, you likely won’t be earning that when you first start, and different specialties can come with higher or lower income ceilings. But earning multiple six figures can make it easier to stomach the staggering amount of debt it takes to complete your education.

If you want to do your due diligence, take some time to talk to others who have gone through med school and ask about their experience. You may also consider using online forums such as Reddit to get some advice and feedback on your career path.

But in the end, if you’re passionate about helping others and the medical field, med school can be a great way to achieve your goals.

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