Average Medical School Debt and Tips for Managing Repayment

Medical school is a significant financial investment, often requiring students to rely on loans to cover the cost of attendance. The median cost for four years of medical school in the U.S., including tuition, fees, and living expenses, is $286,454 at public schools and $390,848 at private schools, according to the Association of American Medical Colleges (AAMC).

With such high costs, about 70% of medical students graduate with debt, and more than half of them have balances exceeding $200,000. Managing this level of debt can feel overwhelming, but understanding your repayment options can help you take control of your financial future.

What is the average medical school debt in the U.S.?

The average medical school debt for the class of 2024 is $212,341, according to the Association of American Medical Colleges (AAMC).

It's worth noting that the amount of debt you graduate with can vary based on the type of school you attend. For example, students at public medical schools carry a median debt of $200,000, while those at private institutions face a higher median of $230,000. These figures also include premedical education debt, which averages $28,000 for about 28% of borrowers.

Why is medical school debt so high?

Several factors contribute to the high levels of debt many medical school graduates carry. Tuition and fees are a primary driver, having increased by 120% over a 21-year period ending in 2022, outpacing general inflation, according to the AAMC.

In addition to tuition, living expenses and interest accrual can significantly add to the financial burden.

“School is so demanding and time-consuming that most students don't have time for a job, so they often have to borrow money to cover not just tuition but also housing, food, and other daily necessities,” says Justin Nabity, certified financial planner and founder of Physicians Thrive, a financial advisory firm for doctors and surgeons.

“To make things even harder, interest starts accruing on loans while students are still in school, so by the time they graduate, they owe more than they originally borrowed,” adds Nabity.

Current student loan refinance rates

How to manage medical school debt

Managing medical school debt effectively can make the repayment process less overwhelming. To get started, it's important that you “understand the difference between private and federal student loans, which loans you have, and which payment options are available,” says Will Koster, a certified financial planner (CFP) at Spaugh Dameron Tenny, LLC.

Once you have a clear picture of your loans, consider these strategies to stay on top of your debt:

• Enter an income-driven repayment plan for federal loans: If you have federal loans, income-driven repayment plans can adjust your monthly payments based on your income and family size. This can be especially helpful during residency, when your earnings are typically lower.
• Put your signing bonus toward your loans: In high-demand medical fields, employers may offer signing bonuses. According to a study by AMN Healthcare conducted from April 1, 2023, to March 31, 2024, the average signing bonus for physicians was $31,473. Applying this bonus toward your student loans could make a meaningful impact on reducing your balance.
• Budget during residency to minimize interest accrual: Residency is demanding, but setting a budget can help reduce long-term costs. After covering savings and building an emergency fund, allocate any remaining funds toward your student loan interest. This can lower the total interest you pay over time.
• Make extra payments when possible: Even small extra payments on your loans can cut down the total interest you owe and help you pay off your debt faster.

Loan forgiveness for medical professionals

Loan forgiveness programs for health care workers can help reduce or eliminate your medical school debt. Here are some options to consider:

Public Service Loan Forgiveness

Best for: Medical professionals working for government or nonprofit organizations.

Public Service Loan Forgiveness (PSLF) forgives the remaining balance on federal Direct Loans after 120 qualifying payments while working full-time (at least 30 hours per week) for an eligible employer. To determine your eligibility, check if your employer is listed in the PSLF employer database.

National Health Service Corps (NHSC) Loan Repayment Program

Best for: Primary care, dental, and mental or behavioral health clinicians working in underserved areas.

The NHSC Loan Repayment Program provides repayment assistance to clinicians who serve in communities with limited access to care. The program offers as much as $75,000 in repayment assistance, depending on whether you commit to full- or half-time service at an approved site.

State-specific repayment assistance programs

Best for: Medical professionals willing to work in underserved areas within a specific state.

Many states offer loan forgiveness programs to attract medical professionals to underserved communities. For example, New York's Regents Physician Loan Forgiveness Award Program provides up to $10,000 per year for two years to reduce medical school debt. Contact local professional organizations or your state's health department to explore state-sponsored loan forgiveness or repayment programs in your area.

See Also: The Complete List of Student Loan Forgiveness Programs

Refinancing medical school loans

Refinancing can be a smart way to manage medical school debt, especially if you're dealing with a balance of $200,000 or more. This process involves replacing your current loans with a single new loan that has its own interest rate and repayment terms.

Refinancing might help you qualify for a lower interest rate or reduce your monthly payments by extending the loan term — though doing so will increase the total interest you pay over time.

Your eligibility for refinancing and the rate you qualify for depend on your credit score, income, and other financial factors. Most lenders require at least a good credit score (670 or higher) to refinance.

While refinancing is often best for private student loans, it's not always the right choice for federal loans. That's because refinancing federal loans means giving up key benefits, like income-driven repayment plans, deferment, forbearance, and loan forgiveness programs. Before refinancing federal loans, make sure you won't need these options in the future.