Paying for Medical School with Loans

By Sarah Netter | Published on October 21, 2025

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Earning a medical degree means saving lives and providing care for the people in your community. Unfortunately, it also means six-figure debt for the majority of graduates.

For medical students who graduate with student loans, the median debt is $200,000 according to the Association of American Medical Colleges. Students at private medical schools often pay down much larger loans —67% borrow money for their medical education, with an average balance exceeding $222,381.

That’s largely because of the ever-increasing cost to graduate from medical school with an average increase of $1,158. The average annual cost of medical school for in-state residents is $210,444, and for private school, the average is $261,812.

In addition to tuition, room and board, equipment, and other education-related expenses, med students often face hefty fees that undergrads and other graduate or professional students do not. These include a $170 application fee for the first application to medical school and $40 for each additional application. Many schools then require a secondary application fee that varies in cost.

Then there’s the MCAT exam registration fee of $320 and, after graduation, fees to apply for medical residency.

It all adds up quickly. To make it easier to understand your choices, we’ve broken down your options for loans and repayment plans.

Federal student loans for medical school

By the time you reach medical school, you may be well versed in loan applications and loan options from your undergraduate and graduate degree programs.

Just as with undergrad, you will need to start the federal loan process by filling out the Free Application for Federal Student Aid, or FAFSA, listing the schools you will be applying to. The schools will use the information in your FAFSA to put together a financial aid package around the time you receive an acceptance letter. Gift and non-gift aid will likely be included as well.

Though some federal loans are based on financial need, you may not receive a loan amount large enough to cover your expenses, especially with the high cost of medical school. Students can appeal for further financial aid in those cases. Otherwise, med school students — including those already in school — should look for additional gift aid such as scholarships and only borrow the loan amount needed to close the gap in funding.

There are two types of federal loans available to medical students, but they come with borrowing limits.

Stafford loans

Stafford Loans, officially known as Direct Unsubsidized Loans, are a popular federal loan option for medical students. While these loans are not dependent on financial need, there are a few additional factors to consider beyond just the borrowing limits and interest rates.

1. Interest accrual: Since these loans are unsubsidized, interest starts accruing from the time the loan is disbursed. Students have the option to pay off the interest during medical school to prevent it from capitalizing (adding to the loan balance), but many opt to defer this until after graduation. It’s essential to understand that the longer you defer, the more interest will accumulate, potentially increasing the total amount owed over the life of the loan.

2. Repayment plans: One of the key advantages of Stafford Loans is access to federal repayment programs, which offer flexibility based on your income. Some of the common repayment plans include:

   • Income-Driven Repayment (IDR) Plans: These plans, such as Income-Based Repayment (IBR) or Pay As You Earn (PAYE), calculate monthly payments based on a percentage of your discretionary income, making them manageable during residency or when income is lower.
   • Graduated Repayment Plans: These plans start with lower payments that gradually increase over time, reflecting the anticipated rise in income as you progress from residency to a full-time medical career.
   • Standard Repayment Plan: This plan offers fixed payments over 10 years, ideal for those who want to pay off loans as quickly as possible.

3. Forgiveness opportunities: Stafford Loans can also be eligible for Public Service Loan Forgiveness (PSLF), which allows for loan forgiveness after 120 qualifying payments while working full-time in a public service job. Many medical professionals in nonprofit hospitals, government health organizations, or public health roles benefit from this program.

4. Deferment and forbearance: Medical students have the option to defer Stafford Loan payments while in school and during residency. Additionally, if you face financial hardship during repayment, you may qualify for forbearance, temporarily pausing payments. However, during forbearance, interest continues to accrue, adding to the loan balance.

Direct PLUS loans

Direct PLUS Loans (often referred to as Grad PLUS Loans) are another federal option for medical students. These loans can cover any remaining costs not met by Stafford Loans or other financial aid. In addition to borrowing limits and rates, there are several important aspects to consider:

1. Credit check requirement: Unlike Stafford Loans, Direct PLUS Loans require a credit check. Although your credit score does not need to be high, you must not have an adverse credit history, such as bankruptcy or significant delinquencies. If you are denied due to credit, you may apply with an endorser (similar to a cosigner) to improve your chances of approval.

2. Repayment flexibility: Like Stafford Loans, Direct PLUS Loans qualify for a range of federal repayment plans, including income-driven options such as Revised Pay As You Earn (REPAYE), which can reduce monthly payments to a more manageable level during the early stages of your medical career. This can be particularly useful during residency when salaries are relatively low compared to post-residency earnings.

3. Interest rate and capitalization: Direct PLUS Loans tend to have higher interest rates than Stafford Loans. Interest accrues while you're in school, and if not paid during that time, it capitalizes once repayment begins, increasing the loan balance. Paying off interest while still in school or during residency can help mitigate the financial impact.

4. Borrower protections: Direct PLUS Loans offer access to the same federal borrower protections as Stafford Loans, including deferment, forbearance, and eligibility for loan forgiveness programs like Public Service Loan Forgiveness (PSLF). For medical professionals working in nonprofit or public sector health organizations, this can be a significant advantage when managing high debt loads.

5. Loan consolidation: After completing medical school, some borrowers may choose to consolidate their Direct PLUS Loans with other federal loans into a Direct Consolidation Loan. This simplifies repayment by combining all federal loans into one, with a single monthly payment. However, consolidation may extend the repayment period and increase the amount of interest paid over time.

Medical school loan programs

Medical school loan programs are designed to address the specific financial needs of medical students, given the extended education timeline and higher-than-average costs associated with becoming a doctor. These programs often provide more flexible terms, specialized repayment options, and tailored support for students who face a long period of schooling before entering a high-paying profession.

Features of medical school loan programs

For accurate information about such programs, you should contact the financial aid office at the medical schools you are interested in, as they can provide details on available loans and repayment options specific to their institution. Generally speaking, medical students should look for institution loan options with one or more of the following attributes:

1. Flexible repayment options: If the financial aid does need to be paid back, medical school loan programs usually come with flexible repayment structures designed for the extended time it takes to complete medical school and start earning an income. Many programs offer options such as:

   • Deferment during school: Most lenders allow borrowers to defer payments while enrolled in medical school, meaning no payments are required until after graduation. Interest may still accrue during this period.
   • Grace periods and extended deferment: Beyond graduation, lenders may provide a grace period of 6-12 months before repayments are required, allowing students time to complete residencies or internships.
   • Income-driven repayment plans: Some medical loan programs allow students to make payments based on their income once they begin working, which can be beneficial during residency or the early years of their medical career when salaries are typically lower.

2. Lower interest rates during residency: Certain lenders may offer reduced interest rates or payment reductions during residency programs. This feature helps alleviate the burden of interest accumulation during training years when incomes are still modest compared to the earning potential post-residency.

3. Forgiveness and refinancing options: Medical school loan programs may offer forgiveness for students who enter certain fields, such as primary care in underserved areas, or who work in public health sectors. Additionally, once students have completed their education and moved into higher-paying positions, refinancing options are available to secure lower interest rates or consolidate multiple loans into a single monthly payment.

Specialized support services

Many lenders offering medical school loan programs provide resources specifically tailored to medical students and graduates. These may include financial literacy programs, budgeting tools, or access to loan counselors with experience working with healthcare professionals. Lenders understand that medical students often require unique financial planning strategies, especially with delayed earning potential, and provide advice on managing student debt through residency and beyond.

Medical school loan programs are built to support the long-term financial trajectory of medical professionals, providing a combination of higher borrowing limits, flexible repayment structures, and specialized resources to help future doctors manage their education costs responsibly.

Private student loans for medical school

Private student loans for medical school provide essential support for students who may not have enough federal loan funding to cover the full cost of their education. These loans are often more flexible in terms of the amount you can borrow, making them an attractive option for covering tuition, fees, living expenses, and other medical school-related costs.

The application process for private student loans

Medical students can apply for private loans directly through a lender’s website or by contacting them directly. The initial steps typically include filling out an application form with your personal and financial information. While some lenders may offer preliminary rate estimates without requiring a hard credit check, a complete credit history review is necessary for approval. This detailed review will affect the loan's interest rate, repayment terms, and overall approval decision.

A few key factors lenders assess include:

• Credit score: A strong credit score can help secure lower interest rates and more favorable terms. If you have a limited or poor credit history, it can be more challenging to qualify for these loans on your own.
• Income level: Many medical students have little to no income during school, which can affect loan approval. Lenders understand this and will consider your future earning potential, but a cosigner can make a significant difference in securing better terms.
• Loan amount: The amount you can borrow is often determined by your school’s certification of the cost of attendance, which includes tuition, fees, living expenses, and other related costs. Private lenders will verify this information to ensure you don’t borrow more than you need.

The role of cosigners in medical school loans

If you have limited credit history or a lower credit score, applying with a cosigner can help improve your chances of securing a loan. A cosigner is someone, usually a parent, relative, or trusted friend, who agrees to share responsibility for the loan. Their good credit standing provides reassurance to the lender that the loan will be repaid, often leading to better interest rates and more favorable loan terms.

Having a cosigner is especially important for medical students who typically have limited income and may not yet have built a strong credit profile. However, the cosigner is equally liable for repaying the loan, so it’s crucial for both parties to understand the commitment. Many private lenders offer cosigner release programs, which allow the cosigner to be removed from the loan after a certain number of on-time payments have been made by the primary borrower.

Interest rates and repayment flexibility

Private student loans for medical school generally offer a variety of repayment options to fit the unique financial situation of medical students. Lenders may provide:

• Fixed and variable interest rates: Fixed rates offer the security of knowing your payments won’t change over time, while variable rates may start lower but fluctuate with market conditions. Medical students often choose fixed-rate loans for predictability.
• Interest-only payments: Some lenders allow interest-only payments while you're still in school, reducing your immediate financial burden. This can be helpful during your years of study when you're focused on your coursework and clinical rotations.
• Deferred payments: Most medical school loan programs allow borrowers to defer payments entirely until after graduation, giving you time to complete your education and move into a higher earning phase before starting to pay down your debt. Keep in mind, interest often accrues during this time, increasing the total cost of the loan over its lifetime.

Private student loans play a critical role in ensuring medical students can cover the full cost of their education, especially when federal loans fall short. By understanding how the application process works, leveraging the benefits of a cosigner, and choosing the right loan terms, medical students can secure the necessary funding to support their journey to becoming healthcare professionals.

Finding the right loan options for your medical school journey

When it comes to funding your medical school education, private student loans can offer the flexibility and coverage you need when federal and medical school loan programs fall short. By exploring private loan options, understanding the role of credit and cosigners, and taking advantage of tailored repayment plans, you can ensure your financial needs are met throughout your medical journey.

If you’re looking for a trusted partner in student loans, Earnest offers a range of loan options designed to support medical students. With competitive interest rates, flexible repayment terms, and no fees for origination or prepayment, Earnest provides a comprehensive solution to help you manage the cost of medical school.