FAQ: How To Pay For Medical School

Pre-Med & Medical School Pre-Med Topics
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The Federal Professional Student Loan Program

There will be major changes in how med students pay for their medical education starting July 1, 2026. As part of the OBBB, the Grad Plus Loan program has been eliminated. The OBBB also placed new borrowing caps on professional student loans.

Starting this year, med students will only be able to borrow a maximum of $200,000 in federal student loans over a lifetime. This maximum includes any (subsidized or unsubsided) undergrad federal student loans a student may have taken out. Med students may only borrow a maximum of $50,000/year.

Federal student loans for professional students are unsubsidized loans. This means that interest begins accruing from the day a loan is disbursed.

Currently the interest rate for professional student loans is 7.97%. A new rate is posted on June 1 of each year. The rate is set by Congress and based on the auction price of 10 year Treasury bonds. Once the loan has been disbursed, its interest rate does not change and will remain for the lifetime of the loan.

A med student will file a FAFSA during their application cycle that will make them eligible for the federal student loan program. A med student may apply for a federal professional student loan only after their chosen (CTI) med school certifies they are an officially enrolled student.

Loans are disbursed at the beginning of each enrollment term, typically 2x/year. The school receives the loan monies on the first day of classes, deducts tuition and required fees from the amount and, if there are any excess funds remaining, those are refunded to the student. The student will receive the excess funds anywhere from a few days to 4 weeks after the school has received the loan disbursement, depending on the school’s refunding process.

If the student does not wish to keep the excess funds, they may return them to the lender within 4 weeks of disbursement to avoid paying interest on the unused amount.

Unless a student begins immediate monthly interest payments on their student loan, the interest will accumulate. At the end of the academic year, the interest will capitalize. That means the amount of unpaid interest will be added to the base amount of the loan increasing its basis. Going forward the interest will be calculated and owed on the new basis of the loan.

Med students take out a new loan for each year of medical school. This typically means a graduating med student will have 4 or more different loans which may all have different interest rates, different lending terms and different loan servicers.

At the end of medical school, the med student may be offered a one time only opportunity to consolidate and refinance their federal student loans. Many students choose to consolidate their loans because it’s easier to keep track of a single loan repayment than several. However, this is an individual decision and will depend on available options and interest rates at graduation, as well the loan servicer’s participation in the loan consolidation program.

After graduation from medical school, the new doctor has a 60 day grace period before loan repayment begins.

Residents/young physicians may opt for either a standard 10 year repayment plan (120 equal monthly payments) or an income-driven repayment plan. IDR plans have a 20-25 year repayment timeline. The monthly payment is recalculated every year and the payment amount is set based upon income (including a spouse’s income, if married) and family size.

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Scholarship for Service Programs

Med students who are willing to trade some of their choices for financial assistance in paying for medical school have several options to consider.

Health Professions Scholarship Program (HPSP)

Under this option a med student commits to serving in a branch of the military service in return for a scholarship.

Scholarships can be for 2, 3 or 4 years. The med student receives full tuition & fees plus a monthly living expenses allowance and an officer’s salary.

The length of payback for the scholarship varies by branch of service.

HPSP recipients must enter a military residency–which means their choice of specialty may be restricted. The needs of the service come first. Some HPSP scholarship recipients only do one year of residency (intern year), then are assigned to work as GMOs (General Medical Officers)–primary care physicians at military bases, aboard ships or traveling with their assigned companies during deployment. After one or more tours of duty, GMOs can apply for specialty training in the military residency system. Or they can wait until the end of their service obligation and apply for civilian residencies.

To be eligible for HPSP, an applicant must meet all eligibility requirements for military enlistment and have a medical school acceptance.

For more information about HPSP: HPSP | Medicine + the Military

National Health Service Corp Scholarship Program (NHSC)

Under this program, a medical student commits to serving as a primary care physician, a mental health care specialist (psychiatrist) or a maternity care specialist (OB/GYN or FM w/ obstetrics fellowship) in a federally designated area of health care shortage. (Maternal care shortage area for maternity care specialists.)

Primary care = family medicine physician, internist, pediatrician or geriatrician.

Scholarships are for 2, 3 or 4 years. Scholarship covers full tuition and all eligible fees, plus a living expenses stipend (with additional monies to cover federal taxes & FICA owed on the stipend.)

Payback is a minimum 1 year of service for each year of scholarship received. Scholarship recipients may choose to work full or part time to fulfill their service obligation.

For more information: https://nhsc.hrsa.gov/scholarships/overview

Veteran’s Administration Health Profession Scholarship Program (VA HPSP)

This is a new program, and last year was its inaugural class of scholarship awards.

Under this program, a med student commits to working at a Veteran Administration’s healthcare facility after completing residency.

Scholarships are for 2, 3, or 4 years and cover full tuition, plus a monthly living expenses stipend and annual book allowance.

There is no restriction on specialty, though the VA may expect scholarship recipients to go into a high need specialty. (Current high need specialties are: Psychiatry, Internal Medicine, Family Medicine, Geriatrics, Diagnostic Radiology, Emergency Medicine, Gastroenterology, and Anesthesiology.)

Upon completion of residency, the scholarship recipient will be assigned by the VA to a healthcare site (no choice allowed) and must relocate to that site at their own expense.

Payback is at least 1 year of service for each year of scholarship received.

Preference is given to military veterans.

For more information: VA Scholarship Programs | VA Careers

Individual State Programs

Some states offer their own scholarship for service programs. Check with your home state’s Department of Higher Education.

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Loan Repayment Programs

Under these programs, young physicians may earn up to $40K/year of federal student loan repayment by working for certain federal agencies in health care shortage areas.

Agencies that offer loan repayment/loan forgiveness to young physicians include:

Department of Veteran Affairs

Educational Debt Reduction Program (EDRP) —offers up to $40,000 repayment/year for federal student loans with a maximum of $200,000 over 5 years, These are usually hard-to-fill positions in less desirable locations. Not all health care sites and not all physician jobs are eligible for the program. Eligible jobs will be noted as eligible for EDRP at USAJobs.

Specialty Education Loan Repayment Program (SELRP) — offers up to $40,000 repayment/year for federal student loans to a maximum of $160,000 over 4 years. You must apply for and be accepted into SELRP before starting your VA job. Minimum 2 year commitment required.
Currently Eligible Specialties: Psychiatry, Internal Medicine, Family Medicine, Geriatrics, Diagnostic Radiology, Emergency Medicine, Gastroenterology, and Anesthesiology.

More information here:Education support | VA Careers

Indian Health Service

Loan Repayment Program (LRP) This program offers physicians up to $25,000/year for a 2 year commitment. $50,000 lifetime maximum. Loan repayment offered for both federal student loans and commercial student loans used to pay for health profession education expenses. LRP also pays federal income tax and FICA on the loan repayment. (So a $25K loan repayment grosses the physician $32,912.50.)

More information : Loan Repayment Program | Indian Health Service (IHS)

Federal Bureau of Prisons

Physicians who work for FBP may be eligible for a loan repayment program. The program pays up to $10,000/year toward federal student loans repayment and a maximum of $50,000 lifetime. Most specialties are eligible, depending on the current needs of FBP.

For more information: BOP: Physician Medical Officer

State Loan Repayment Programs

Many states offer a loan repayment program for physicians in certain high need specialties who are willing to work in rural or medically underserved areas of the state. Please check with your home state’s Department of Higher Education for available programs.

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This is very useful information. To me it is consistent with one thing that several of us have been saying for a while, which is that students who are serious about being premed should avoid undergraduate debt if they reasonably can. There will be plenty of opportunities to run up plenty of debt in medical school.

I have somewhat mixed feelings about this. $200,000 is quite a bit of of debt even for a doctor who has completed their residency. It also seems likely that interest could pile up both during the MD program, and also during residency if a resident is not able to both pay their own living expenses and keep up with interest payments given a resident’s income.

However, I do wonder what students will actually do to pay their medical school bills and living expenses. We need doctors.

Even paying in-state prices at a public university, the total cost over 4 years of an MD or DO (or DVM) program I am pretty sure including living expenses comes to more than $200,000 (we did just go through this for a DVM). I can’t imagine that getting an MD or DO is going to be any less expensive compared to our experience with a daughter getting a DVM, nor that costs are going down over time. EDIT: Google AI just now said that the in-state cost for example at U.Mass medical school is about $83,000 per year.

Is the expectation that parents will be able to help at least some, or that schools will provide some aid, or that students will also get private loans?

To me these numbers are a bit scary unless the parents are going to be able to help to some degree, even if the parents cannot cover the full cost.

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Perhaps @WayOutWestMom can weigh in…but IMHO, $200,000 of debt for four years of medical school is not particularly high for a graduating doctor.

Regardless, students wishing to pursue MD or DO degrees, do need a plan for funding their medical school costs. And as noted, federally funded loans will no longer do so.

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All three.

The issue is that most med schools, particularly state med schools, many lesser known and new private MD schools and all DO schools, simply don’t have an endowment to be able to provide scholarships to all/most students. A few of the better endowed med schools do offer in-house loans that don’t accrue interest during med school as well as scholarships, but the majority of med schools simply cannot afford to do this.

Medical students have always come from high earning families. True going back to the 1940s when the information first started being collected.

Approximately 73-79% of today’s med students come from families earning over $120,000/year. (That encompasses the top 2 quintiles of household incomes in the US). 24-33% of med students report household earnings in the top 5% of all US families (income over $335,500). Only 5% of med students report family incomes in the lowest quintile.

Right now there are about 6-8 commercial lenders in the education market. So far there has not been a huge rush of companies entering the education market. All have fairly modest loan ceilings (lower than the fed student loan program). Some require co-signers. All have less favorable repayment options and higher interest rates than federal student loans.

Supposedly several states are trying to develop their own student loan programs for grad and professional students, but whether those programs pass and are funded in the state legislatures —your guess is as good as mine

A few medical schools are trying to circumvent the OBBB by pushing up enrollment dates and the first day of orientation to before July 1, 2026 hoping to get their student grandfathered in under the current federal student loans rules. Whether the Treasury Dept (which now manages the federal student loan program) allows this remains to be seen.

As for the $200K in federal loans…

The national median debt of a newly graduated physician in 2025 was $246,659. (total includes undergrad debt )

However, that number skews low due to the fact that 26% of newly graduated physicians graduated with ZERO debt.

(The no-debt group were financed by Bank of Mom & Dad, personal savings, scholarship for service programs, and attending no or low tuition cost medical schools.)

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With the allowed loan amounts now, my daughter wouldn’t be a successful Dr. making more in one year than they allow loans now. Nice, Orange ■■■■■■ bag for trying to push out lower and middle income people from becoming Dr.s

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My daughter’s BIL was very fortunate to be accepted to the first class at the Idaho DO school, so tuition was free. He had no debt from undergrad as he went to Wyoming as an instate student (practically free) and he had half his father’s GI bill (my SIL got the other half). But he started just when covid did, so the rents in Idaho skyrocketed with all of L.A. moving there to work from home and avoid the germs. Then he did internship in Montana and same thing, high rents. Now finishing his residency in GA and low rents but high other costs. On to fellowship in Houston so I think his COL will be okay with a salary, but no progress on paying off loans. He’ll get to them after fellowship, but by then he’ll be 35+ years old. And he’s a lucky one who had some funding (but not cash from Mom and Dad).

My SIL had originally wanted to go into medicine (they have many generations of doctors in their family) but didn’t want that debt. I think there are many like him who would have made good doctors but just can’t deal with the debt.

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I have said that to succeed in medicine (or in veterinary medicine) requires being very good or fortunate in a relatively long list of different dimensions. As examples you need to be smart, have a good memory, be hard working, be determined (which might occasionally resemble stubborn), be compassionate, and put up with yuck. I think that nearly all of the doctors I know also have good people skills.

Unfortunately the ability to pay for the education seems to be one of those dimensions.

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https://www.nytimes.com/2026/04/15/upshot/student-debt-graduate-school.html

What the New Loan Caps Will Mean for Grad Students This Fall
With new limits on federal lending, many students will need private loans and some could be shut out. See the data, program by program.

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Is there website or knowledge regarding the aid/scholarships from different medical schools, maybe like NPC for undergraduate admission, which may give an estimate regarding the family financial situation.

We know public medical schools have almost no aid/scholarship, and few private medical schools cost almost no tuition (NYU, Johns Hopkins, Albert Einstein). But many other schools are in the dark mode.

Then we know most students will be lucky even if they have only one single offer from medical schools, regardless of the aid/scholarship situation for this particular school.

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No.

A few medical schools in NYC (i.e. Columbia and Cornell) lay out a very specific outline for need-based aid awards on their FA website. Low income students will have their need met without loans.

NYU only offers free tuition. Students are still responsible for their living expenses. COA for living expenses, transportation and health insurance is estimated at $45K/year

JHU’s free COA is only for families with incomes under $175,000 with typical assets and free tuition only to students whose family income is under $300,000/year with typical assets. JHU uses the the CSS Profile to determine eligibility for FA. Financial information from both parents is required if parents are divorced and financial information from a spouse as well as parents if a student is married.

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Do these two medical schools require parents’ financials in determining who is “low income”?

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Absolutely yes. CSS Profile required from both parents.

And a student is not considered independent unless they are 32 -35 (or thereabout) when they start medical school.

Also if they start as a student required to submit parental (and spousal) financial information, a student will be required to provide that information every year through graduation. (IOW, they can’t “age out” of the requirement for parental financial info while they’re a student/)

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Sallie Mae will provide loans of up to 100% of med/dental school COA, including living expenses.

Sallie Mae (Nasdaq: SLM) today announced new and expanded graduate loan options for medical and dental students, supporting students from the first year of school through the transition into clinical practice. The enhanced offerings expand credit eligibility for qualified students and provide responsible financing with competitive interest rates, no origination or application fees, and flexible repayment options that reflect the longer training timelines and financial considerations of advanced health care education.

Medical and dental students face rigorous, multiyear training paths. Sallie Mae’s expanded graduate loan options are designed to support that journey, allowing students to cover up to 100% of school‑certified costs, including tuition, supplies, and living expenses, and helping ease financial pressure during school and residency while providing a clearer, more manageable transition into repayment.

https://news.salliemae.com/news-releases/news-releases-details/2026/Sallie-Mae-Expands-Graduate-Loan-Options-For-Medical-and-Dental-Students/default.aspx

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Some caveats about the Sallie Mae loan:

  1. may require a cosigner if a student’s credit score is not high enough, their credit history is not robust enough or if the student wants the lowest interest rate possible
  2. maximum repayment deferment period allowed during residency/fellowship is 48 months. Must reapply for deferment every 12 months
  3. loans are NOT eligible for any sort of loan forgiveness programs (PSLF, for example)
  4. loans will impact a health professional’s credit score (making other types of loans more expensive–like auto loans or home mortgages)
  5. the term of the loan cannot be extended once the contract is signed. This means once a young physician begins repayment after a period of deferment their payments will be higher than if they had started repayment immediately
  6. the current interest rate for $10,000 loan distributed in 8 equal payments over 4 years on the “most typical” med student loan w/ a 48 month grace period after graduation is 8.98%
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Thanks for the summary. Clearly this option is not as good as the prior Federal options that don’t exist anymore. But, it is an option for many, along with loans that various states have started providing for med school students (Mass MEFA, NC, etc.), as well as the institutions that will provide loans either for full COA or to fill the gap once federal loans are maxed out. Many schools provide med school student loans, some have for years, some have announced new programs in light of the new federal limits. Some examples of institutions that have loans programs in place: U Michigan, U WV, UCLA, UCD, UNC, Yale, and more. Notably, some of the state and institutional loan programs do have forgiveness options.

IMO this thread would be put to good use if it became a repository for the various loan options that professional students have beyond the federal loan limits. Not a recommendation for any option, but rather a starting point for research.

IMO it’s not helpful for us to post on every thread where a student says they might look at attending med school about the $200K federal loan limit, with no other context. It would be better to link to this thread so they could become educated.

Many/most med students will have options for loans above and beyond the federal loan limit. The students who don’t have options will be relatively disadvantaged students (as always), who don’t have a good credit score (or their parents don’t), or can’t get a co-signer, or who do take out loans with rates in the mid-high teens+, etc.

Right, and this 8.98% is virtually the same as the current (2025-26) federal parent plus rate of 8.94% (that also has a 4.228% vig…not sure the vig on the Sallie Mae loan).

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Quick anecdote- I’ve posted before about my grandfather who started undergrad in 1918 and then med school in the early 1920’s. Virtually ALL of his med school classmates were from affluent families; training rotations AND residencies were very hard to get if you were low income and from an immigrant family as he was. The non-affluents ended up in the “charity hospitals” (what we’d consider public hospitals now) so you had doctors from low income families treating other low income patients. Eventually- and with more years under your belt- you might have saved enough to open a private practice.

His recollections were that the image of “affluent doctors” (i.e. a doctor who made enough money as a physician to be considered affluent) didn’t come into play until the 1950’s/1960’s. Being a doctor was not all that well paid before then. If you were a brainy kid from an affluent family, medical school was a VERY noble profession, and had higher social status than the other things rich kids aspired to do.

So my takeaway is that we now look back at a 50 year period where doctors were allegedly “rich”– and therefore could easily pay back heavy loans after a few years. But that’s a narrow window in the history of medical education and society. The broader story is that medicine was a calling, a highly respected intellectual pursuit for an elite group of people (many of whom came from elite AND affluent families). So we are back to the historical mean. Kids without substantial family support are going to have extra hurdles in order to access their education and get trained.

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