Medical school can cost a quarter of a million dollars or more. Students can rarely afford to pay without taking out student loans.
While doctors can end up making a lot of money, many still spend over a decade in debt. And doctors who come from less wealthy families face the highest debt levels.
This report dives into the typical medical school debt and the average time to pay off medical school debt, plus factors that make a difference in the amount of debt doctors owe.
Medical school is extremely expensive. The average cost of attending a public medical school is over $200,000. For private medical schools, it can be over $300,000.
As a result, nearly all medical students take out substantial loans to pay for medical school. The median debt for medical school graduates is around $200,000.
With this high debt burden, many doctors wonder – how long will it take me to pay off my student loans?
Unfortunately, there is no one-size-fits-all answer. The repayment timeline depends on several key factors:
Key Factors That Determine Repayment Timeline
1. Total Loan Amount
The total amount borrowed obviously impacts repayment length. The more you owe, the longer it will take to repay the debt.
According to the Association of American Medical Colleges (AAMC), 73% of medical students take out over $200,000 in loans. 7% borrow over $300000. This level of debt takes most borrowers at least 10-20 years to repay.
2. Interest Rates
The interest rates on your loans also matter. Higher interest debt takes longer to pay off since more money goes towards interest charges.
Federal student loans have fixed rates set by Congress. For loans issued in 2022-2023, the rates range from 4.99% to 7.54%.
Private student loans typically have variable rates based on the Prime Rate or LIBOR. Current rates on variable private loans range from 3-12%, depending on credit.
3. Repayment Plan
The type of repayment plan you choose has a big impact. Options include:
- Standard Repayment: Fixed payments over 10 years.
- Graduated Repayment: Payments start low and increase every 2 years. Up to 10 years.
- Extended Repayment: Fixed or graduated payments up to 25 years.
- Income-Driven Repayment (IDR): Payment capped at 10-20% of discretionary income. Remaining balance forgiven after 20-25 years.
Standard 10-year repayment is the fastest option. IDR plans take the longest time until loan forgiveness.
4. Specialty and Future Income
Your medical specialty and related income potential also factor into the timeline.
Higher paying specialties like orthopedic surgery ($511,000 average) allow faster repayment. Lower paying careers like pediatrics ($242,000) take longer.
Of course, projected future income can change over the course of a career and may not match long-term repayment needs.
5. Lifestyle and Budgeting
Lastly, your budgeting, spending habits, and lifestyle choices impact repayment speed.
Living frugally during residency and attending years enables faster repayment. Opting for a higher cost lifestyle slows progress. Building savings also competes with repayment goals.
Repayment Timelines by Plan Type
With the key factors above in mind, here are typical repayment timelines based on the plan type:
Standard 10-Year Repayment
- With average debt of $200,000, monthly payments are around $2,200.
- Higher debt like $300,000 has payments around $3,300 monthly.
- Most residents cannot afford these payments right out of school.
- Attending physicians early in their careers may also find it difficult.
- Realistically, many doctors on the 10-year Standard plan take 15-20 years to repay through deferments/forbearances during training.
Extended Repayment
- With extended terms up to 25 years, monthly payments are lower.
- $200,000 over 25 years is around $1,300 monthly.
- $300,000 over 25 years equals payments of $1,900 per month.
- Lower payments help, but the loan takes longer to pay off.
- Total interest paid is also higher compared to 10-year Standard.
Income-Driven Repayment (IDR)
- IDR plans like PAYE and REPAYE base payments on 10-20% of discretionary income.
- Monthly payments are lower compared to standard plans.
- However, loans are not fully repaid until 20-25 years of payments are made.
- The remaining balance is forgiven tax-free after 20-25 years of repayment.
- IDR forgiveness provides repayment security but higher total interest.
Strategies to Shorten Repayment Timeframe
The typical timelines above may seem daunting. Here are some strategies doctors can use to repay their loans faster:
- Make extra payments: Making payments above the monthly minimum goes directly to principal and shortens the repayment timeline. Even small extra amounts help.
- Refinance at lower rates: Private loan refinancing can secure lower interest rates, reducing total interest costs. Variable rates below 3% are possible depending on credit. Every 1% rate drop saves thousands in interest.
- Pay loans during residency: Federal programs allow low $0 monthly payments during residency/fellowship. Making small paydown payments will save on accrued interest and principal.
- Live frugally: Being prudent and smart about spending, especially early in attending career, enables faster repayment. Avoid lifestyle inflation and budget wisely.
- Consider PSLF: Doctors working for nonprofit hospitals/organizations may qualify for Public Service Loan Forgiveness after 10 years of payments.
- Enroll in NHSC: The National Health Service Corps offers up to $50,000 in repayment assistance to primary care doctors working in high-need areas.
Developing a Repayment Strategy
Every doctor’s situation is different. Here are some steps to develop an optimal repayment strategy:
- Take stock of all student loans and know interest rates, balances, loan types, etc. Consolidate if needed.
- Project future income based on your specialty choice and job prospects. Be realistic.
- Make a detailed monthly budget based on residency/fellowship stipends and expected attending salary. Factor in cost of living.
- Model different repayment scenarios on student loan calculators. Vary terms, rates, and payment amounts to see projections.
- Take advantage of federal IDR options but run the numbers on total interest paid.
- Research refinancing rates from private lenders. Compare potential savings from refinancing.
- Discuss options and scenarios with financial aid office and financial advisors. Get professional opinions.
- Pick a balanced approach that fits your loans, income, and lifestyle. Don’t sacrifice your future financial health.
Key Takeaways
- Most doctors take at least 10 years to fully repay their medical school loans. Many take 15-20 years or longer.
- Income level, total debt, interest rates, repayment plan, and personal budgeting choices all impact the timeline.
- Strategies like refinancing, paying early in residency, PSLF, NHSC, and careful budgeting can shorten repayment.
- Doctors should run repayment scenarios and develop an informed repayment strategy tailored to their situation.
Paying off medical school loans is a long journey but smart planning and discipline can make it manageable. With a thoughtful approach, doctors can repay their student loans faster while also achieving their other financial goals.
Medical School Debt Statistics
The Association of American Medical Colleges (AAMC) surveys nearly 17,000 medical school graduates each year, representing roughly 80% of all medical school graduates. Most of the data in this report comes from these surveys.
- Each year, about 75% of medical students borrow federal student loans, amounting to roughly $3 billion borrowed per year.Note Reference [1]
- In 2023, 68% of medical school graduates had student loan debt for medical school.Note Reference [2]
- The median amount owed was $200,000.Note Reference [2]
- 31% of medical school graduates also owed student debt from before medical school.Note Reference [2]
There’s more than one way to start a rewarding career in healthcare.
Physicians must complete four years of medical school after earning their bachelor’s degree. Then, they spend several years in post-graduate training — called residency — before they can practice in their specialty.
But there are many careers in healthcare and nursing that require less time and money than medical school. For example:
- A bachelor’s in healthcare administration prepares students to manage people and processes in medical settings.
- Bachelor’s in nursing programs enable you to work alongside doctors and pursue a master’s in nursing if you desire.
- Medical assistant associate programs provide a fast path to working with patients in medical settings. These degrees typically take just two years.
Example 3: A surgical specialty doctor spends 10 years in repayment after going into forbearance during their residency.
Surgical specialty doctors have lengthy residencies, sometimes seven or eight years. A resident in this field could request forbearance, meaning they temporarily suspend loan payments while their interest still accrues.
After residency, they would make monthly payments of $3,700. That’s roughly 15% of some surgeons’ monthly incomes.Note Reference [7]
They would pay $440,000 over 10 years — a total of 17-18 years in debt.
How Long Will It Take To Pay Off My Student Loans
FAQ
How quickly do doctors pay off student loans?
Depending on various factors, paying off medical school loans might take 10 to 30 years. According to a study from Weatherby Healthcare, 25% of doctors expect to take six to 10 years to pay off their student loan debt, while 34% expect to take at least 10 years to pay off their student loans.
How long would it take to pay off $100,000 in a student loan?
| Repayment term | Monthly payments | Total interest paid |
|---|---|---|
| 5 years | $1,933 | $15,997 |
| 10 years | $1,110 | $33,225 |
| 15 years | $844 | $51,984 |
| 20 years | $716 | $71,943 |
How much do doctors pay in student loans per month?
At a fixed interest rate of 8.08%, borrowers with $200,000 in federal student loan debt would be required to pay $2,435 in monthly payments in order to pay off all educational debts within 10 years.
Will student loans be forgiven for doctors?
Most states have student loan repayment assistance or forgiveness programs for doctors, though they’re often subject to funding availability by state. These programs typically award varying amounts of student loan forgiveness to doctors for their work in rural communities and designated HPSAs.