Medical loan refinance: How Dr. Lopez saved $35,858 in interest

By Sasha Bulatskaya | Published on March 30, 2026

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The following story is not based on an actual Earnest client and was created for illustrative purposes only. Results on rates and savings may vary and are not guaranteed.

Meet Dr. Kayla Lopez. She’s a 28-year-old MD who’s finished residency training and makes a healthy $250,000 salary, but she’s also carrying over $200,000 in student debt.

Dr. Lopez’s situation represents the 73 percent of medical school graduates who carry an average of over $200,000 in student debt – not including undergraduate or other educational debt.

Like many MDs, Dr. Lopez is in a difficult position. Her monthly payment is $2,794, which means almost $3,000 of her hard-earned money goes toward her med school loans. During her time in residency, her loan payments were much lower because she was on a federal income-driven repayment (IDR) plan. But as soon as she got a promotion, the payments shot up. That’s because IDR plans calculate payments based on income and family size, and once Dr. Lopez’s income increased, so did her payments. Some of her college friends even told her that once they started making their full salary, their payments were higher than they would be with a standard payment plan.

As a result of ongoing court actions, the terms of some Income-Driven Repayment (IDR) plans, including the SAVE plan, may be subject to change. Please refer to studentaid.gov for the current status of these plans.

After doing a few calculations on a student loan repayment calculator, Dr. Lopez was shocked to discover that if she stays on the 10-year standard repayment plan at her current 9.5% interest rate, she will pay $96,321 in interest alone. That brings her total loan cost to $296,321! Almost a third more than the original amount she borrowed.

She lives and works at a medical group in Seattle, where the cost of living can be 50% higher than the national average. While she makes good money on paper, over half of her paycheck goes to rent, groceries, student loans, and other bills.

Every month, Dr. Lopez spends:

• $2,500 on rent
• $1,000 on groceries
• $300 on utilities
• $2,794 on student loans
• $500 on personal expenses
• $1,000 on restaurants and takeout

Dr. Lopez pays over $8,000 a month for living expenses, and that’s not including the money she puts away in her 401(k), commuting, and traveling to see her parents, who live out of state.

Her ultimate goal is to own a home, but the median home price in Seattle is over $800,000. She needs to cut costs and pay off her loans as soon as possible to save for a down payment, but with her current expenses, it’s going to take a long time. So, she opens her laptop and starts researching her options.

She comes across Public Service Loan Forgiveness but she doesn’t work at a non-profit and doesn’t qualify. Consolidation doesn’t work for her either because it doesn’t technically lower interest rates, but gives her the weighted average of all of her loan rates. Refinancing looks like the most promising option because its goal is to lower interest rates.

After researching many med school loan refinancing options, she runs a quick rate check and learns that she could qualify for a 5.5% interest rate. After she applied, she was approved for a 5.5% interest rate. With this new low rate, she can trim her monthly payment by $623 and save over $35,858 in interest. If she continues to make her current monthly payment of $2,794, she could pay off her student loans even earlier.

By refinancing her medical school loans, Dr. Lopez gets to save $35,858 for the down payment on her dream home and even has extra room in her budget. Knowing that a big part of her down payment is taken care of, she doesn’t have to worry about her student debt as much as before. If she refinanced with Earnest, she knows her payments are set on Auto Pay, and she can focus on other financial goals.

See how much you could save with Earnest

If Kayla’s story sounds familiar and you’d like to learn more about refinancing your medical school loans, check your interest rate with Earnest. It takes only 2 minutes, and you can use our refinancing calculator to find out how much you could save.

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About the Author

Sasha Bulatskaya

Sasha is the Senior Manager of Brand and Content at Earnest. She has been writing for ten years and has been focused on educational finance and financial aid for over three. Her passion for mission-driven companies brought her to Earnest in 2020, and she's been helping make student finance more accessible ever since. She strives to demystify personal finance and student loans to help borrowers make the best decisions for their financial situation.

Disclaimer

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.