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Becoming a doctor can be prohibitively expensive for many — the average medical school debt is $232,200.
So to pay for medical school, you’ll likely need to turn to student loans to cover at least some of the cost. But the type of loans you choose can have a big impact on your overall student loan debt burden. By understanding your options and choosing the right loans, you can minimize the impact student loans will have on your finances.
Here’s what you need to know about your options:
- Federal loans for medical school
- Private loans for medical school
- Other private student loan lenders to consider
- Medical school loans FAQ
Federal loans for medical school
Federal student loans should be the first place you start when it comes to taking on debt for medical school. They tend to have lower student loan interest rates and have more benefits than private loans, including:
- Access to IDR plans: Federal loans are eligible for income-driven repayment plans, where the loan servicer extends your loan repayment term and caps your monthly payment at a percentage of your discretionary income.
- Can put loans into forbearance or deferment: Federal loans can be placed into deferment or forbearance, meaning you can temporarily postpone making loan payments without becoming delinquent or defaulting.
- Eligibility for PSLF: If you work for a qualifying nonprofit organization or government agency, your federal loans might be eligible for Public Service Loan Forgiveness, where your remaining balance is forgiven after making 120 qualifying payments.
As a medical school student, there are two main types of federal loans available to you:
- Direct Unsubsidized Loans: Available to graduate students and professional degree students, Direct Unsubsidized Loans are for anyone attending school, regardless of financial need. Unlike some other types of federal loans, interest begins to accrue right away, and you’re responsible for paying all interest charges. Loans disbursed for medical school after July 1, 2018, and before July 1, 2019, have an interest rate of 6.6%.
- Direct PLUS Loans: If you’re enrolled in an accredited school at least half-time, you’re eligible for Direct PLUS Loans, which are for graduate students and professional degree students. PLUS Loans have an interest rate of 7.6%.
Keep in mind, there are student loan limits. Medical school students can take out a total of $224,000 in subsidized and unsubsidized direct loans before turning to PLUS loans. Also, while you’re in medical school, you’re eligible for mandatory medical residency forbearance, which means you can postpone making payments until your residency is complete.
Tip: Before considering PLUS loans or private loans, you should take out as much in unsubsidized loans as possible. Private loans can also be a better option than PLUS loans because of lower interest rates and PLUS loan fees.
Private loans for medical school
Federal loans might not be enough to cover the cost of your education. You might exhaust your federal aid, or simply need more time to complete your degree. If that’s the case, private student loans can help fill the gap so you can finish medical school.
Private loans tend to have higher interest rates and stricter repayment terms than federal loans, but by comparing private student loan lenders, you can qualify for a competitive interest rate. In fact, if you have a good credit score and credit history, you could qualify for a lower rate than federal loans offer.
You can find out how much your student loans will cost you over time with our student loan calculator.
|Lender||Loan limit||Fixed rates from (APR)||Variable rates from (APR)|
|Up to 100% of the school-certified cost of attendance||4.39%+2,3||1.49%+2,3|
|Up to 100% of the school-certified cost of attendance||4.84% - 12.39%6||1.84% - 11.99%6|
|Up to 100% of the school-certified cost of attendance|
(minus other aid received)
|4.74% - 11.85%9||1.25% - 9.44%9
your credit score. 100% free!
Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Bank Disclosures | 2,3College Ave Disclosures | 6Discover Disclosures | 8EDvestinU Disclosures | 9Sallie Mae Disclosures
Citizens Bank Student Loan Rate Disclosure Variable rate, based on the one-month London Interbank Offered Rate ("LIBOR") published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of June 1, 2020, the one-month LIBOR rate is 0.17%. Variable interest rates range from 1.29%-11.43% (1.29%-11.00% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.29%-11.95% (4.29% - 11.49% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co- signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
Other private student loan lenders to consider
Here are more private student loan companies we evaluated. Keep in mind that these lenders are not offered through Credible, so you won’t be able to easily compare your rates with them on the Credible platform like you can our partner lenders.
Frequently asked questions about medical school loans
As you enter medical school, you likely have several questions about your loans and repayment. Below are just a few common questions and answers to help you.
1. Are medical school loans eligible for forgiveness programs?
Federal medical school loans are eligible for Public Service Loan Forgiveness (PSLF), a loan program which forgives the remaining balance on your loans after you make 120 qualifying payments while working for an eligible non-profit organization or government agency.
Private student loans are not eligible for PSLF. However, there are some state repayment assistance programs that will repay a portion of your federal or private student loans in return for your commitment to work in an underserved area for a certain term.
2. Is there a way to reduce the amount of interest I’ll pay on my loans?
If you’ve already completed your residency and have high-interest federal or private student loans, one way to save money is to refinance your student loan debt. With refinancing, you work with a private lender to take out a loan for the amount of your current debt. The new loan has completely different terms, including a new interest rate, repayment term, and minimum monthly payment.
While you’ll lose out on federal benefits like access to income-driven repayment plans by refinancing, the savings can be significant, which could save thousands over the length of your payment term.
3. How should I pay off my medical school debt?
When paying off medical school debt, try to pay at least the interest that accrues on your loans while you’re in school and during your residency. Keeping up with the interest charges will keep your balance from ballooning out of control, and will help you save money over the life of the loan.
Once you’re done with school and are working, consider refinancing your medical school loans to reduce your interest rate; it can help you save money over the length of your repayment. Credible allows you to compare prequalified rates from multiple refinancing lenders.
Tip: Some private student loan lenders offer medical residency loans specifically designed for medical students going through residency, allowing you to skip making payments until your residency is complete. Interest will continue to accrue on your loans during this time, but this option can give you some breathing room while you finish your education requirements.Methodology: Credible evaluated loan and lender data points in 10 categories to identify the “best companies” for private student loans. We looked at interest rates, repayment terms, repayment options, fees, discounts, and eligibility. We also considered each company’s level of customer service provided, cosigner release options, whether the minimum credit score is available publicly, and whether consumers could request rates with a soft credit check. Credible receives compensation from its lender partners when a user of the Credible platform closes a loan with the lender.