Paying Off Medical School Debt: 4 Strategies for Doctors

At a fundamental level, student loan debt has to be repaid. Unless it is an extreme circumstance (as in death or disability) then you have to find a way to make your payments. Not paying on time, or at all, can make your financial situation snowball into an avalanche that can be difficult to escape.

Late and missed payments will affect your credit score and follow you for a long, long time.

Secondly, these loans are not free. They weren’t loaned to you out of the kindness of anyone’s heart. The loan is designed so the loan provider can make money from the interest you are paying. Every month that you still carry a balance is another month that someone else is making money off of you.

We understand that it’s not always realistic to avoid debt in the first place or to pay off a large lump sum all at once. So where do you turn when you need answers to questions about the monthly payments that you have right now?

Let’s start by demystifying the student loan landscape. Understanding the broader statistics of medical school debt in the country can mitigate some of the anxiety around making financial decisions that work for you.

Med School Student Loan Statistics

Medical school student loan debt can be crippling for early-career physicians.

The average medical school graduate owes more than 7 times the amount of the average college graduate.

Nearly three-quarters of all medical students graduate with some form of student loan debt.

The median debt owed was more than $200,000 in 2022, but this figure excludes undergraduate student loan debt.

About one-third of medical school graduates carry undergraduate student loans, which can further burden residents and entry-level physicians who have not yet achieved full earning potential.

How much does it cost to go to medical school?

In general, medical schools at public universities are more affordable than private colleges.

In 2022, the average yearly cost of medical school was more than $55,000. Assuming it takes four years to graduate, tuition amounts to an average of $220,000.

Student loan servicers and lenders are sustained by interest. By the time, physicians pay off theri student loans they’ve paid between $135,000–$254,000 just in interest.

On average, public medical school graduates have $15,000 less educational debt than their peers from private colleges.

On average, marginalized and low-income students tend to owe more than their white counterparts.

Demographic % with Student Debt Average Med. School Debt
Indigenous Peoples (American Indian and Alaska Native) 80% $212,375
Asian, not Hispanic 61% $180,000
Black, not Hispanic 91% $230,000
Hispanic 75% $200,000
White, not Hispanic 71% $200,000

Chart from Education Data Initiative (

How To Improve Your Credit So You Can Get Lower Interest Rates

Working on your credit score can help you secure a lower interest rate and get closer to debt-free living sooner.

Tips for Building a Strong Credit History:

  • Improve your credit score by making bill payments on time every month. Never carry credit card debt over from month to month.
  • Try and limit how much of your available credit lines you use. Ideally, you want to stay below 30 percent utilization.
  • If you have older credit cards, don’t get rid of them. Your credit age factors into your credit score. If you don’t want to use them any longer, pay them off and set them aside, unless they have an annual fee you want to avoid.
  • If you don’t have any credit cards, get one, use it, and pay off your bill in full every month to help establish a good credit payment history in the eyes of lenders. Use it like a debit card and only spend what you can afford to pay at month’s end.
  • Don’t apply for new credit cards if you are considering refinancing your student loans in the near future. Your credit score takes a small hit every time there is a hard inquiry made on your credit.
  • Check your credit report at to see if there are any mistakes. In 2013, the Federal Trade Commission estimated that 1 in 5 Americans had mistakes on their credit report. These mistakes could be affecting your credit and, in turn, keeping you from the best possible interest rates from lenders.

4 Strategies for Paying Off Medical School Debt

After devoting their whole lives to academic excellence and advanced training, astronomical monthly payments put a massive amount of stress on doctors.

Financial stress is one of the top contributors to burnout and mental health challenges in the profession.

However, medical school loans don’t have to snowball out of control.

With the right repayment strategy or combination of strategies, borrowers can get out of even crippling debt and take charge of their financial future.

  1. Seek Out Student Loan Forgiveness Programs
  2. Consider Student Loan Repayment Programs
  3. Make Payments Strategically
  4. Minimize Living Expenses

1. Seek Out Student Loan Forgiveness Programs

Various state, local, and federal entities offer student loan forgiveness programs for physicians who work in the government or non-profit sector. Each program has its qualifying terms, so it’s important to do your research to confirm you qualify.

We’ve pulled together a few notable student loan forgiveness program options to consider.

Public Service Loan Forgiveness

One of the most common student loan forgiveness programs is Public Service Loan Forgiveness (PSLF). PSLF is not exclusive to people in the health professions, but it is restricted to people who work in public service.

PSLF is open to physicians who work full-time for a non-profit organization, or local, state, and federal government.

Applicants must have made 120 on-time monthly payments and have Direct loans on an income-driven repayment plan while working for a qualifying employer.

There are a few stipulations on qualifying monthly payments. For example, your monthly payment only counts toward the 120 total if you are not currently in school, forbearance, deferment, or the post-graduation grace period.

Student loan payments made during the COVID-19 pandemic loan pause will, however, count.

PSLF will only apply to federal student loans. Private student loans, including federal loans that have been refinanced, will not be eligible for forgiveness through PSLF.

Research State-Specific Loan Forgiveness

All U.S. states offer some kind of medical loan forgiveness. The terms will differ depending on your state and eligibility, but we’ve put together a convenient list of state-specific loan forgiveness programs.

It’s important to note that some states, such as Colorado, offer student loan forgiveness whereas other states, such as Michigan, offer repayment. It’s a small distinction, but it may affect how the loan is disbursed over time.

Wait for Supreme Court Decision

President Biden proposes $10,000 in education debt forgiveness for single people making less than $125,000 and households making less than $250,000. Borrowers who received financial aid through Pell Grants would be eligible for an additional $10,000 in relief.

The relief program is currently blocked by conservative judges in the lower courts and it’s been escalated to the Supreme Court, where the justices will continue to hear arguments and deliberate for the next several months.

If the program is approved, your federal student loan debt could be forgiven or your remaining balance could be reduced by as much as $20,000. Premature student loan refinancing or unnecessary payments could take valuable funds out of your pocket.

2. Consider Student Loan Repayment Programs

While student loan forgiveness wipes your loan balance in one fell swoop after you’ve met the requirements, student loan repayment is more of a trickle over time.

Student loan repayment programs are typically offered to physicians who work in underserved areas or those experiencing financial hardship.

We’ve outlined a few repayment options worth considering if you’re struggling with medical school loan debt.

Military repayment programs

The Army, Navy, and Air Force offer student loan assistance programs to active duty service members.

We’ve outlined some notable military repayment programs, the amounts they pay out, and the basic requirements.

  • The Army’s Financial Assistance Program: Grants up to $45,000 per year and a $2,000 per month stipend to Army members currently enrolled in an accredited residency program
  • Active Duty Health Professions Loan Repayment Programs: Provides up to $120,000 in student loan relief to active duty physicians; it pays out $40,000 per year over three years
  • Health Professionals Special Pay (HPSP): Pays up to $50,000 annually to Army Reserve physicians who have completed a residency in a qualifying specialty
  • Health Professions Loan Repayment Program (HPLRP): Repays up to $40,000 annually directly to medical school loans, but it will take out federal income taxes first; medical students, residents, and Navy physicians are eligible
  • Navy Financial Assistance Program: Provides annual grants and monthly stipends to qualified doctors and dentists
  • Navy sign-on bonuses: In some cases, the Navy will pay out a signing bonus of up to $400,000 when practicing physicians in certain specialties enlist.
  • Air Force Financial Assistance Program (FAP): Pays up to $45,000 each year and a monthly stipend of $2,000 for doctors who agree to serve for one year plus one for each year you collect FAP funds

National Institute of Health Loan Repayment Programs

The National Institute of Health (NIH) offers loan repayment programs to physicians pursuing careers in research. Applicants must complete a minimum of two years researching projects funded by the U.S. government or a non-profit organization.

If you’re approved, you’ll be eligible for $50,000 per year in student loan repayment.

The NIH also offers a separate loan repayment assistance program of up to $50,000 per year for minority healthcare professionals. With this program, there are two options.

The Loan Repayment Program for Health Disparities Research supports healthcare professionals researching health disparities whereas the Extramural Clinical Research Loan Repayment Program for Individuals from Disadvantaged Backgrounds supports doctors from low-income backgrounds who work in clinical research.

National Health Service Corps Loan Assistance

The National Health Service Corps (NHSC) offers repayment assistance programs to medical professionals who work on sponsored initiatives.

  • NHSC Loan Repayment Program: Provides up to $50,000 in student loan assistance to medical professionals who work at least two years at an NHS-approved site
  • NHSC Substance Use Disorder Loan Repayment: Provides up to $75,000 in loan repayment to healthcare professionals who work to combat the opioid crisis at an NHSC-approved site for at least three years
  • Students to Service Loan Repayment: Provides up to $120,000 in assistance to upcoming medical school graduates who commit to providing three years of primary healthcare at an NHSC-approved site

Income-driven repayment plans

The federal government offers four different income-driven repayment (IDR) plans.

We’ve outlined the important information about each plan below.

  • Pay As You Earn (PAYE): Repayment amount will be about 10% of discretionary income, but not more than the 10-year Standard Repayment Plan amount; repayment term is 20 years
  • Revised Pay As You Earn (REPAYE): Repayment amount will be about 10% of discretionary income; repayment term is 20 years for undergraduate loans and 25 years for graduate or professional degrees
  • Income-Contingent Repayment (ICR): Repayment amount will be the lesser of 20% of your discretionary income OR what you would pay on a 12-year fixed payment plan; repayment term is 25 years
  • Income-Based Repayment (IBR): Repayment amount is 10% of discretionary income for borrowers who took out their loans after July 2014 or 15% of discretionary income for borrowers who took out their loans before July 2014; repayment term is 20 years for 20 borrowers and 25 years for other borrowers

Federal Student Aid offers a loan simulator that can help you estimate your monthly payments and choose your student loan repayment strategy.

3. Make Payments Strategically

Paying off your student loan debt can be a more manageable feat if you budget around it strategically.

Consider some or all of the below options to save money over your student loan term.

Use your signing bonus to pay down debt

As many as 57% of physicians have a bonus incentive baked into their income according to a Medscape’s 2022 Physician Compensation Report. Merritt Hawkins also found that more than 92% of 2022 medical professional job seekers were offered a signing bonus. These signing bonuses have a wide range––starting at a still impressive $31,000 and capping out at a sky-high $400,000.

If you’re on the job market, consider negotiating a signing bonus, end-of-year bonus, or other performance based financial incentives. When you receive this income, use it toward your debt to reduce the number of monthly payments you’ll need to make over the loan term.

Make extra payments

Homeowners looking to pay off their mortgage quickly will often budget to make more than one monthly payment. If you apply this logic to your student loan balance, you’ll end up shaving significant interest because the extra payments will go toward paying your principal balance.

You can begin a bi-weekly repayment plan by setting aside 50% of your loan amount every two weeks. With this plan, you’ll end up making 13 payments per year rather than the required 12.

Start making payments during residency

Many residents take advantage of forbearance or deferment to reduce their bills, but student loans still accrue interest during this period. If you can afford to make student loan payments during residency, you can save on accrued interest over the loan term.

Some student loan services will even approve interest-only payments if you can’t afford the entire repayment amount.

Refinance for a better interest rate

Medical school students typically graduate with a mix of private and federal student loans. Federal student loans often have federal benefits, such as income-driven repayment plans and the potential for forgiveness if you work in the non-profit sector.

Private student loans, on the other hand, can be refinanced at a better interest rate if market conditions have changed. When you refinance a private student loan, you agree to new terms, including payment amount and repayment term.

In general, it’s recommended that you refinance with a private lender early and often to ensure you’re getting the best interest rate.

Consolidate federal student loans

If you have more than one federal student loan, you may be making more monthly payments than you can reasonably afford.

With a Direct Consolidation Loan, you can reduce your federal student loans to one convenient monthly payment. Federal Direct Loans also make you eligible for income-driven repayment plans and PSLF.

Direct Consolidation Loans also have a fixed interest rate. It’s calculated from the weighted average of the interest rate on all the consolidated loans rounded to the nearest 1/8th percent.

There is no application fee and all paperwork can be processed online through the U.S. Department of Education. Some private lenders may offer the option to consolidate your federal loans through them, but that is not the same as a Direct Consolidation Loan.

4. Minimize Living Expenses

After dedicating yourself to long hours of training and rigorous academic coursework while most likely living on a shoestring budget, it can be tempting to fall into lifestyle inflation.

Physician loans in particular can make it easy to purchase a home with a high monthly payment, which can easily balloon your expenditures if you’re not careful.

Maintaining a low cost-of-living can help you pay-off your student loans earlier while still setting you up for financial success in the long run.

Live Frugally

In simplest possible terms, living frugally means leaving well beneath your means. While you may be making more money after completing residency, living with roommates, minimizing eating out, and avoiding expensive vacations can allow you to set aside more money for your monthly payments.

After you’ve paid off most or all of your student loan debt, you’ll be free to increase your standard of living without feeling shackled by looming payments.

Move to a Rural Area

As mentioned above, moving to an underserved area can qualify you for certain loan forgiveness and repayment programs.

Rural areas may also allow you to qualify for a USDA home loan, which can allow you to purchase a home with little money down. Purchasing a home in a rural area can allow you to build equity, while keeping your cost-of-living low relative to big cities.

Save money for other financial priorities

While paying off debt is an important step to achieving long-term financial goals, it shouldn’t take priority over building an emergency fund, saving for your future home, or investing in retirement.

The best strategy for paying off student loan debt will allow you to balance competing priorities in an informed manner.

How Long Does It Take to Pay Off Medical School Debt?

According to a 2019 survey from Weatherby Financial, the average doctor takes about 8 years to pay off student loan debt. About 35% of doctors pay off their medical school debt within five years of graduating.

In some cases, you’ll have as long as 25 years to pay off your student loan debt, but many physicians choose more aggressive repayment strategies.

Talking to a financial advisor can help you develop the right strategy for paying off your medical school debt efficiently without deprioritizing your other important life goals.

Remember that everyone’s financial decisions are based on their unique values, so it’s important not to compare or disparage yourself for figuring life out on your own terms.