How to Pay off Medical School Debt More Quickly

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April 12, 2021 02:11 AM (GMT-04:00)
Provider Tips

Medical School Debt: A Looming Problem


That’s the median amount graduates owed on their medical school loans in 2020 (Association of American Medical Colleges).

But medical school debt isn’t just an expensive problem; it’s also a ubiquitous one: 76-89% of med school students graduate with medical school debt, and 43% of graduates also carry pre-med debt (

In addition to being a substantial and widespread issue, medical school debt is also stressful. The pressure of looming debt can erode physicians’ quality of life and has even been shown to negatively impact mental health, academic performance, and specialty choice among aspiring physicians (Pisaniello, Asahina, et al.).

Top Strategies for Reducing Med School Debt

Fortunately, with strategic planning, physicians can reduce the time it takes to pay off medical school debt as well as the amount they’ll have to pay. Theories abound about the best way to approach loan repayment, and each provider will need to decide what’s ideal in their particular scenario. One thing is certain: not having a plan can be disastrous. These strategies for reducing medical school debt can help physicians lighten the load and create space to enjoy the pleasures of life and the rewards of the career.

Make a Plan.

The first step is to get organized and develop an approach. Devote a day specifically to researching options and creating a plan to pay down your med school loans over the long term. Consider involving your partner or spouse and/or enlisting the services of a financial planner or wealth advisor. Determine precisely how much you owe. Estimate what you’ll spend on interest if you pay it out over the life of the loan as is. Then re-evaluate as you consider each of the strategies below and map out the best path for reducing your loans.

Don’t Wait.

If you’re still in your residency, don’t defer payments on your loan. It may be tempting to put loan payments on hold for as long as you can, but resist that urge. It could save you hundreds of dollars each month and tens of thousands over the long run. For example, if you owed $200,000 at a 5.3% interest rate and chose to defer your loans for three years during a residency, you would incur $31,800 in additional interest. This would increase your balance to $231,800, and you would have to pay approximately $342 more per month than what you would have paid without the deferment (Student Loan). If, as a resident, you are unable to afford full loan payments on your resident salary, pay as much of the interest as you can to keep your balance from growing.

Make More and Spend Less.

If you increase your earnings and reduce your expenditures, you’ll be able to unburden yourself from your med school loans much sooner. Many physicians pick up extra shifts moonlighting or working weekends or vacations on locum tenens assignments to pay down loans. Others take on side work as consultants, medical writers, paid lecturers, or expert witnesses. Other ideas are to publish a book, teach at a university, coach medical students and tutor for MCATs or med school classes. Further, you can use any additional money that comes in – from signing or performance bonuses, raises, or tax refunds – to pay down loans. You can even make an additional loan payment each year (a strategy many homeowners use to pay down mortgages) to pay off your loan faster. Moreover, if you reduce what you spend by sticking to a budget and living a reasonable lifestyle, you can pay off your loans more quickly, which means you’ll be able to fully enjoy that physician salary you’ve worked so hard to earn –  much sooner and for a longer period of your life.

Consider Loan Forgiveness.

Look into different opportunities to work with underserved patient populations in exchange for forgiveness of your med school loans. Some states, academic organizations, and nonprofits have different programs to help with loans. And many federal organizations will reduce or forgive school debt, and options may include Indian Health Services, Veterans Administration, US Public Health Commissioned Corps, the US Military, the Centers for Disease Control and Prevention, National Institutes of Health, National Service Health Corps, and Department of Health and Human Services. Additionally, there is the federal Public Service Loan Forgiveness Program, which will forgive loans after you have made a certain number of payments. Keep an eye out for future developments in these programs, as recent federal administration changes may lead to more opportunities to reduce loan debt.


Med school loans are comparatively expensive: interest rates on these loans are significantly higher than rates on undergrad loans. Fortunately, refinancing lenders offer low annual percentage rates that can help you save significantly (up to thousands of dollars, based on your debt-to-income ratio and credit score). It is critical to note that if you refinance, you will no longer be eligible for programs like federal income-driven repayment plans (including PAYE, REPAYE, IBR, and ICR, which let you pay based on what you earn versus what you owe), public service loan forgiveness programs (which forgive loans for those in public service after a certain number of payments), or other state or nonprofit loan forgiveness programs.

Use Your Resources.

Professional medical associations, government agencies, academic institutions, and even healthcare organizations offer resources to help physicians deal with med school debt. For example, American Academy of Family Physicians’ Managing Medical School Debt, American Medical Association’s Managing Medical School Loans, and University of Minnesota’s Medical Resources for Managing Debt are full of valuable resources for physicians.

Above all, make a plan and start now. You’ll be that much closer to financial freedom and reaping the rewards of your dedication to your profession, your practice, and your patients.

To learn more about opportunities that can help you conquer med school debt, like taking a locum tenens assignment, contact us today.

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