Medical school in the U.S. is increasingly expensive and always leaves that shadow of debt hanging over the doctor. But have no fear, future doctors! You first need to know where to look for—wisely—your medical school debt, from scholarships and grants to federal and private loans. By becoming knowledgeable about your options and making good choices, you will approach the road to medical school with a clear financial map, making the path to becoming a doctor smoother while keeping the debt monster at a distance.

Understanding Loan Terms and Conditions
Deferment Definition: Allows you to postpone loan payments temporarily.
Use it during residency or other financial hardships. Interest: Interest may not accrue for federal loans during a deferment period (subsidized loans), but it usually continues to accumulate for private loans.
Forbearance Definition: Like deferment, forbearance allows temporary suspension of payments. Use it: When you don’t qualify for a deferment but when you also need relief. Interest: Interest accrues on both federal and private loans during forbearance.
Grace Period Definition: The time between graduation and when loan payments start. Duration: The grace period for federal loans is typically 6 months.
Use this wisely: You should consider making interest payments during this timeframe to lower your overall debt.
Loan Consolidation Definition: The process of combining multiple loans into a single loan with one monthly payment. Pros:
- Simplified Repayment: It’s much easier to manage one loan.
- Potential Lower Payments: Extending the repayment term can reduce your monthly payments. Cons:
- Loss of Benefits: Consolidation may eliminate certain benefits (e.g., interest rate discounts)
Read More: MCAT Exam Costs and Financial Aid: All You Need to Know
Medical School Expenses
Understanding the financial landscape of medical schools is crucial to your journey to becoming a medical doctor. We aim to simplify this complex topic by providing a clear breakdown of the potential costs you may encounter during your medical school journey.
- Tuition and Fees: Tuition is the bedrock of a medical school’s cost. That is subject to innumerable variations, all depending on in-state, out-of-state, public, and private—not to mention program specifics. Usually, tuition each year will range from $30,000 to $60,000. Remember, this amount does not include additional fees for technology, labs, and health insurance premiums.
- Living Expenses: Common basics include housing, food, transportation, and other day-to-day necessities. As a student, you will require a safe and comfortable apartment, food, and a car to help you commute. These costs can fluctuate widely depending on where your school is located. It is always wise to budget for rent, groceries, utilities, and transportation.
- Books and Supplies: Any quality education experienced in medical school implies a good deal of reading. Purpose: Much reading and corresponding study materials are necessary during medical education.
Therefore, it is necessary to have textbooks, online resources, lab coats, stethoscopes, and other supplies required to do the coursework in print and digital form. Some schools offer e-resources, whereas other schools use printed textbooks.
You need to budget for such educational material in your coursework, as the cost of studying can be very high. On average, you will have to spend $1200 per year on books and supplies.
- General Expenses: Don’t forget those hundreds of other expenses. These would be professional clothing (white coats, scrubs), exam expenses (e.g., the United States Medical Licensing Exam or USMLE), and professional society membership costs.
There also may be personal costs related to wellness, mental health, and leisure activities. These miscellaneous costs vary widely, but you can expect up to another $2600/year is fair.
- Financial Aid and Scholarships: Find out about any available financial aid. Federal loans are being offered, as well as grants, scholarships, and work-study—all can help offset the costs. Look for scholarships for medical students; there are many scholarships to be had in your area of study. Plus, scholarships will not have to be paid back, making it an excellent resource.
Public vs. Private Medical Schools
Public Medical Schools | Private Medical Schools | |
1. Tuition and Fees | ||
– In-State Tuition | $30,000 to $40,000 per year | – $50,000 to $60,000 or more per year |
– Out-of-State Tuition | Around $63,546 per year | Fees: Additional fees may apply |
2. Class Size and Opportunities | ||
– Class Size | Larger class sizes | Smaller class sizes |
– Admissions Advantage | State residents have an edge | Prestigious reputation often leads to competitiveness |
– Specialized Training | Some offer unique programs | Known for high-quality research and education |
3. Financial Aid and Debt | ||
– Financial Aid | Available but competitive | Scholarships, grants, and work-study programs offered |
– Impact on Debt | Lower tuition may result in less debt | Higher tuition may lead to increased borrowing |
– Scholarship Opportunities | May be limited | Significant scholarships may be available |
Yet, in terms of writing the check, it’s good to have an overview of the rough outline of the overall cost of medical education. Below are the differences between the costs of public and private medical schools.
The state government funds Public Medical Schools, making them a more affordable option for residents. This financial support often translates into significantly lower tuition rates, providing a reassuring prospect for prospective students and their families. Here’s what you need to know about public medical schools:
- Tuition: Generally, in-state tuition rates are outrageously less than out-of-state tuition rates. In general, public medical schools charge an average tuition of between $30,000 and $40,000 each year per annum for in-state students. Public schools can also expect to charge technology and lab fees, as well as health insurance premiums. Some costs amount to a few thousand dollars.
- Class Size: Public schools are often criticized for big class sizes.
Private Medical SchoolsPrivate medical schools are independent institutions that fund the running of their institutions through tuition, endowments, or gifts. Here is what to know:
- Tuition: Tuition is higher in private medical schools. Expect to pay an average of between $50,000 and $60,000 each year, or even higher in some institutions.
- Fees: Like public schools, private schools can charge fees for other things. Expect to pay for technology, equipment, and administrative services.
- Financial Aid: Most private schools offer financial aid. However, the competition for such awards is often keener than in the public sector. Scholarships and grants are usually available but often do not completely cover the fee.
- Class Size: Class sizes are generally smaller in private schools, which allows for more individual attention and mentorship.
Read More: 10 Costs to Expect When Applying to Medical School
Types of Financial Aid Available for Med Students
1. Scholarships
Scholarships are merit-based awards that do not require repayment. They can come from various sources, including medical schools, private organizations, and community foundations. Here’s what you need to know:
- Merit-Based: Scholarships recognize academic achievements, leadership, community service, or specific talents.
- Application Process: Apply early and thoroughly research scholarship opportunities. Some scholarships are school-specific, while others are open to all medical students.
- Impact: Scholarships can significantly reduce your financial burden and enhance your resume.
2. Grants
Grants are need-based awards provided by federal or state governments, medical schools, or private institutions. Key points:
- Financial Need: Grants consider your financial situation, including family income and assets.
- FAFSA: Complete the Free Application for Federal Student Aid (FAFSA) to determine eligibility for federal grants.
- Pell Grants: These federal grants are specifically for undergraduate students but may apply during your preclinical years.
3. Work-Study Programs
Work-study programs allow students to work part-time on campus or in community service positions. Highlights:
- Financial Need: Eligibility is based on financial need.
- Job Opportunities: Work-study jobs can include research assistance, administrative roles, or tutoring.
- Balancing Act: Manage your workload effectively to balance academics and work responsibilities.
4. Loans
Loans are borrowed funds that must be repaid with interest. While loans are not ideal, they can be essential for covering educational costs:
- Federal Loans: These include Direct Unsubsidized Loans and Graduate PLUS Loans. Interest rates are typically lower than private loans.
- Private Loans: Private loans, offered by banks or credit unions, have varying interest rates. Use them cautiously and explore federal options first.
- Repayment Plans: Understand repayment terms and explore income-driven repayment plans.
Need-based and Merit-based Aid
Need-based aid considers your financial situation and aims to bridge the gap between your resources and the cost of attending medical school. Here’s what you need to know:
- Grants: These are awarded based on financial need and do not require repayment. Federal and state governments, as well as some medical schools, offer grants.
- Work-Study Programs: Eligible students can work part-time on campus or in community service positions. The income earned helps cover educational expenses.
- Federal Loans: While loans are not ideal, federal loans (such as Direct Unsubsidized Loans) offer lower interest rates and flexible repayment options. The amount you can borrow depends on your financial need.
Merit-Based Aid
Merit-based aid recognizes your achievements, talents, and contributions. It is not tied to financial need. Consider the following:
- Scholarships: Scholarships are awarded based on academic excellence, leadership, community service, or specific skills. They can come from medical schools, private organizations, or foundations.
- Academic Awards: Some medical schools offer awards to students with outstanding academic performance.
- Research Fellowships: If you excel in research, you may qualify for fellowships that provide financial support for research projects.
Federal vs. Private Loans
Federal Loans | Private Loans | |
Advantages | ||
– Affordable Interest Rates | Typically lower and fixed, easing the financial burden | Customization is available, including fixed or variable rates |
– Income-Driven Repayment | Flexible options align payments with your earnings | Can fill funding gaps not covered by federal loans |
– Loan Forgiveness Programs | Offer forgiveness options like PSLF for qualifying roles | Interest rates depend on creditworthiness, potentially better terms |
– Grace Periods | After graduation, provides time before repayment begins | |
– No Credit Check or Co-Signer | Most loans don’t require these, accessible to many | |
Loan Limits | ||
– Annual Limits | Vary by loan type and academic year | |
– Aggregate Limits | Total borrowing limit for graduate students | |
Example: Direct Unsubsidized Loans have an annual limit of $20,500 for graduate students. | ||
Aggregate limit for Direct Unsubsidized Loans is $138,500 (including any undergraduate loans). | ||
Considerations | ||
– Interest Rate Variability | Rates may vary, impacting total repayment | |
– Terms and Conditions | Read the fine print, understand fees and repayment schedules | |
– Debt Management | Assess comfort level with borrowing and plan for repayment |
Advantages
Reasonable Interest Rates: Federal loans usually have lower (and fixed) interest rates than other private loans.
Flexible Repayment Plans: Payments are made flexible and income-driven. This includes income-based repayment, income-contingent repayment, and the new Pay as You Earn program.
Post-Residency Options: You can postpone payments during residency or fellowship through grace, deferment, or forbearance options.
Consolidation: Most federal loans are eligible for consolidation with the Direct Consolidation Loan.
Your credit history will not be a barrier: A Direct Unsubsidized Loan is available to you regardless of your credit history so long as you have not reached your cumulative loan limits.
Considerations
Borrowing Limits: Federal student loans also have aggregate and per-year limits. Make sure you understand the amounts you can borrow each year.
Application Process: Free Application for Federal Student Aid (FAFSA).
Personal Loans
Advantages:
TERMS ADJUSTABLE Variable or fixed interest rates on private loans Think through the impact on a total interest cost.
Interest Rates That Depend on Your Creditworthiness: Interest rates might vary based on your creditworthiness. Granted, a better-scored co-borrower will secure better loan rates.
Flexible Repayment: Some private loans offer deferment options during schooling, residency, or fellowship.
Customized Solutions: Private loans can offer the solution where federal options cannot meet all needs.
Considerations
Interest Rate Caps: Ensure no cap is set on the variable rate.
Small letters: read the terms of repayment, the fees, and limitations very carefully.
Debt Tolerance: Evaluate how comfortable you are with the debts you have taken up and the responsibility of repaying borrowed money. Search for more information on the AAMC and AAFP websites.
Federal Student Loans
Direct Unsubsidized Loans | Direct PLUS Loans | Health Professions Student Loans (HPSL) | |
Overview | Available to undergraduate and graduate students. | Available to graduate and professional students. | Need-based loans for health professions students. |
Interest accrues during school and grace periods. | Credit check required. | Administered by individual schools. | |
No financial need requirement. | Can cover the full cost of attendance. | ||
Eligibility Criteria | Enrolled at least half-time in an eligible program. | U.S. citizen or eligible non-citizen. | Determined by the school’s financial aid office. |
U.S. citizen or eligible non-citizen. | Enrolled at least half-time in an eligible program. | Based on financial need. | |
Complete FAFSA. | Complete FAFSA. | ||
Interest Rates | Fixed rate set by the Department of Education. | Fixed interest rate. | Vary by school. |
Currently around 5.28% of graduate students. | Currently around 6.28%. | Low interest rates. | |
Repayment Options | Standard repayment (10 years). | Standard repayment (10 years). | Repayment terms are determined by the school. |
Income-driven repayment plans. | Graduated repayment (starts lower, increases over time). | ||
Public Service Loan Forgiveness (after 120 payments). | Income-driven repayment plans (for consolidation). |
Private Student Loans
Federal student loans are a cornerstone of financial aid packages for medical school students. Still, they do not always cover the cost of attendance. Private loans must fill that gap. Of course, private loans have different considerations than their federal counterparts, so let’s walk through the best strategies for navigating the world of private lenders.
Take Unsecured Loans
- First Exhaust Federal Options: The most available are the Unsubsidized and PLUS Loans. Look to these before private options are considered. Generally, lower interest rates are offered, and they provide flexible repayment plans.
- Think of a Private Loan as Your Last Resort: Think of a private loan as the source of financing only after all other potential sources of federal aid, scholarships, and grants.
Choose a Credible Lender
- Shop around: Do not waste your time comparing the quotes on rates and terms of a number of lenders; don’t be afraid to negotiate for a good deal.
- Research Reputation: Look for a lender with a good reputation for customer service and clear loan terms.
- Read the Fine Print: Before signing any agreement, read through the fine print, including the interest rates being charged, whether they are fixed or variable, the terms for repayment, and whether there are any grace periods or deferment options—and any potential fees, for that matter.
- Approach with Caution: Seek out any federal aid available, and check out your lenders. Never be timid about asking questions regarding interest rates, repayment options, or loan terms. Knowing the interest rates and understanding the repayment options and terms of the loans allows you to make numerous informed decisions that can help reduce the share of private loans in your solution.

The Application Process to Get a Medical Student Loan
1. Completing the Free Application for Federal Student Aid (FAFSA)
- Why FAFSA Matters:
- The FAFSA is the gateway to federal financial aid, including student loans.
- It determines your eligibility for grants, scholarships, and work-study programs.
- Key Steps:
- File Early: Complete the FAFSA as soon as possible after October 1st each year.
- Independent Student: As a medical school applicant, you are considered an independent student for federal student aid. Parental information is not needed on the FAFSA form.
- School Codes: List the medical school’s federal school code on the FAFSA to ensure the results are sent to the schools you are applying to.
2. Investigating Sources of Aid
- Contact the Financial Aid Office:
- Reach out to the medical school’s financial aid staff to explore available sources of financial aid.
- Inquire about institutional scholarships, grants, and loan options specific to medical students.
- Federal Loans:
- Consider borrowing federal student loans:
- Direct Unsubsidized Loan: This loan is available to both undergraduate and graduate students. Interest accrues during school, but the terms are favorable.
- Direct PLUS Loan: For graduate/professional students. Requires a credit check but covers the full cost of attendance.
- Consider borrowing federal student loans:
3. Applying for Aid – Know the Deadline
- Timeliness Matters:
- Pay attention to deadlines. Missing them could disqualify you from aid opportunities.
- Apply early to avoid unexpected delays.
4. Receiving Your Aid Offer
- What to Expect:
- Once your FAFSA results are processed, the financial aid office will send you an aid offer.
- The offer will detail the types and amounts of financial aid you can receive.
Read More: MCAT Exam Costs and Financial Aid: All You Need to Know
Plans of Repayments on the Medical Student Loan
Income-Driven Repayment Plans (IDR)
How Do They Work: IDR plans allow you to set your monthly payment according to your income and family size. The term is extended to 20 to 25 years, and any remaining balance is forgiven afterward.
Advantages
Affordability: IDR plans to give more reasonable payments early in your career when your income is likely lower.
Flexibility: Select from multiple IDR options such as PAYE or REPAYE.
Public Service Loan Forgiveness: You qualify for the Public Service Loan Forgiveness program.
Pay While in School and Residency
Interest Accumulation: Interest accrues during in-school and grace periods. Make small payments to reduce accrued interest.
Budget Wisely: Even small payments can add up to quite an impact over time.
Make Extra Payments
Snowball Effect: Every additional payment, no matter how small, eats away at your principal balance.
Windfalls: Put extra funds (tax refunds, bonuses, gifts) toward reducing the total debt.
Trimming the Budget: Reduce non-essential spending so you have extra money toward loan payoff.
Refinance your debts
What Is Refinancing?: It is acquiring a new loan, preferably with favorable terms or lower interest rates, to pay off an old loan.
Pros:
Savings in Interests: A low-interest rate implies less money paid as interest charges with time.
Simplified Repayment: This is the process of combining your different loans together.
Cons:
Loss of Federal Benefits: Refinancing federal loans means losing the income-based repayment plans and the chance to apply for public student loan forgiveness.
Credit Check: Requires good credit or a co-signer.
Read More: AAMC Fee Assistance Program (FAP): Everything You Need to Know

Strategies that Decrease Medical School Debt
Aspiring medics have the twofold challenge of pursuing their dreams while managing the financial burden of education. Below are some practical strategies for reducing student loan debt for students before and during medical school:
Choose a Low-Cost Undergraduate Institution
- Cost-effective decision: A quality undergraduate education is pursued in an institution that offers quality education but at an affordable price.
- In-State Tuition: One alternative is to attend a public university in the home state, which incurs lower in-state tuition costs.
- Research Scholarships and Grants: Look up any available scholarships or grants for research during one’s undergraduate study.
Apply for Scholarships Early and Often
- Start Early: Hunt for scholarships years before you attend medical school. Apply for local, national, and specialty scholarships.
- Merit and Need-Based: Look into merit and need-based scholarships, which may be both for academics and leadership.
- Medical Associations: Explore scholarships offered by medical associations and foundations.
Accelerated Degree Programs and Dual Degree Programs
- Combined Programs: Some colleges offer combined programs where it is possible to complete both undergraduate and medical school portions in a more abbreviated period.
- Dual Degrees: Consider dual degrees, such as an MD/MPH or MD/MBA, which raise your marketability and possibly lower your opportunity costs.
Live Like a Local in Medical School
- Don’t need to live lavishly: Try to live frugally during your med school years. Stay within your means and avoid going for the unnecessary.
- Living with roommates, shared housing: Split the housing expense with roommates to save money.
Military Service and Student Loan Repayment Programs
- Health Professions Scholarship Program (HPSP): Payment of tuition for medical school in return for service at a military medical school.
- National Health Service Corps (NHSC): Work to serve those who are underserved and have your loans paid.
Deal with Payments Through School and Residency
- Accrual of Interest: Paying the interest while in school and residency will shrink the total debt service.
- Small Debts Matter: The smallest payments can eventually add up to huge sums.
Conclusion
We’ve peered into this financial terra incognita of medical school through several different lenses focused on managing your debt effectively.
Remember, here are the key points:
- Strive for federal loans: Work on federal options, such as unsubsidized and PLUS loans, before contemplating private loans. Federal loans tend to carry lower interest rates and offer more flexible repayment plans.
- Research Private Lenders: Research private loan lenders and compare their rates and terms, ensuring you are interested in those lenders who offer good customer service and have a good reputation.
- Understand loan terms: Before you sign on the dotted line, be sure to read the fine print and understand information about interest, repayments, and the potential to rack up fees.
Informed decision-making in funding your medical education reduces the need for private loans and allows a smoother financial transition to graduation en route to becoming a physician.
Are you ready for the next step? Get in on the conversation and see what it really means to be part of the team. Subscribe to Jack Westin’s podcast for the best hints, tips, and strategies for navigating the med-school admissions process to get the critical conversation.

FAQs
- What are medical student loans? These are financial aid options borrowed from the government (federal loans) or private lenders to cover the costs of medical school, including tuition, fees, and living expenses. They must be repaid with interest after graduation.
- How do medical student loans work? Federal loans typically offer lower interest rates and flexible repayment plans compared to private loans. You can borrow based on your financial need and eligibility. Repayment usually begins after a grace period following graduation.
- When to apply for medical student loans? Apply for federal financial aid (FAFSA) as early as October 1st the year before you start medical school. Research scholarships and grants simultaneously. Consider private loans only after exhausting federal options.
- Will medical school loans be forgiven? Federal loans may be eligible for forgiveness programs like Public Service Loan Forgiveness (PSLF) if you work in qualifying public service roles for a set period. Private loans generally are not forgiven.
- Can medical school loans be refinanced? Yes, you can refinance federal and private loans with a private lender to potentially secure a lower interest rate. However, this may eliminate federal benefits like income-driven repayment and PSLF eligibility.
- How to repay medical school loans? Federal loans offer various repayment plans based on your income. You can also make payments during school and residency to reduce accrued interest. Explore income-driven repayment plans and loan forgiveness options.
- How to consolidate medical school loans? Federal Direct Consolidation Loans allow you to combine multiple federal loans into a single loan with one monthly payment. Private loans cannot be consolidated with federal loans.
- Are medical school loans tax deductible? Interest paid on qualified student loans may be tax-deductible under certain circumstances. Consult a tax advisor for details.
- Are medical school loans subsidized? Federal Direct Subsidized Loans have the government cover interest that accrues while you’re enrolled at least half-time, during grace periods, and deferment periods.
- Are medical school loans deferred during residency? Federal loans typically offer deferment options during residency. Private loan deferment options vary by lender.
- Are medical school loans federal? Both federal and private lenders offer medical student loans. Federal loans generally offer better borrower protections and repayment flexibility.
- Are medical student loans eligible for forgiveness? Federal loans can be forgiven through programs like PSLF, but private loans are rarely forgiven.
- Can I refinance my private medical school loans? Yes, you can refinance private loans with a private lender, but carefully consider the potential loss of federal benefits.
- How much debt is too much for medical school? There’s no one-size-fits-all answer. Consider your future earning potential, desired lifestyle, and risk tolerance when determining your comfort level with debt.