Attending medical school is certainly a valuable investment in your future, but it’s also a pricey one. On average, medical school graduates owe a total of $241,600 in student loan debt. That’s about six times the amount owed by the average college graduate.
Fortunately, there are more ways to pay for medical school than you might expect. Many of your options also apply to financing undergrad education, but some are unique to pursuing an advanced degree.
In this guide, we’ll look at both familiar and more creative ways to pay for medical school. We’ll also talk student loans and why they should be your final resort. Using these strategies, you’ll pave the way to your future as a medical school student and successful doctor.
Assess Your Resources
Start by considering the resources already available to you and your family. Do you have money saved up that can go toward the cost of medical school? Are any family members willing to contribute to your education?
Of course, your family isn’t obligated to help you with tuition. But it doesn’t hurt to ask. Even if you set up a repayment plan, you’ll avoid having to pay the high interest rates of a federal or private student loan.
It’s also helpful to consider whether you have any assets to sell. This might include selling a more expensive car for a cheaper alternative, or listing some electronics and other valuables for sale online. Although these options won’t cover your tuition, they will help you reduce the size of your loans as much as possible.
After assessing your existing resources, the next step is to look for money that you don’t have to pay back. This includes scholarships, grants, and financial aid. Most scholarships will help pay for your education at any accredited medical school. However, you can also apply for scholarships offered by the medical school you plan to enroll in.
Some scholarships are need-based, but many are based on merit. It helps to have a stellar academic record and strong research interests. Other scholarships are based on volunteer work, religious affiliation, cultural background, and other hobbies or areas of interest. Do your research, and you’ll be surprised to discover the wide variety of scholarships out there.
You can apply for both national and local scholarships. Professional organizations, rotary clubs, and hospitals in your area may offer scholarships. Even if the award amount seems low, simply apply for as many scholarships as possible. They add up, and every little bit helps!
Make sure you continue searching and applying for scholarships throughout your medical school education. Scholarships are available for specific parts of your medical school journey, such as the residency. For example, the American Medical Association Foundation’s Physicians of Tomorrow Scholarship program awards $10,000 scholarships to students approaching their final year of medical school.
Next up in the category of “money you don’t have to pay back,” we have grants! Most grants are need-based. Similar to scholarships, grants may come from government, private, or public organizations, as well as nonprofits.
As you apply for scholarships and grants, make sure to read the fine print. Some are tied to specific requirements, such as your location or specialty area.
Just like in undergrad, you must fill out the Free Application for Federal Student Aid (FAFSA) to qualify for need-based financial aid from the federal government and/or your medical school. Keep in mind that aid is often awarded on a “first come, first served” basis. Gather your financial documents and submit your FAFSA as early as possible.
Contact the financial aid office at your medical school if you have specific questions. Making an early connection and getting a jumpstart on the process is hugely beneficial. You can also find tons of financial aid information and resources on the AAMC FIRST website.
Make a Service Commitment
If you’re willing to make a service commitment, some organizations will provide scholarships or repay your student loans in return.
Here are three of the most prominent examples:
The National Health Service Corps Scholarship Program (NHSC SP) awards scholarships to medical school students who commit to provide primary care services in Health Professional Shortage Areas (HPSAs). You commit to a minimum of two years in exchange for one full year of scholarship support. The NHSC SP will provide financial support for up to four school years. They also provide monthly stipends to assist with living expenses and an annual payment for other “reasonable educational costs.”
Similarly, The Indian Health Service offers a Loan Repayment Program (LRP) for clinicians working at Indian Health Service facilities, Tribally-Operated 638 Health Programs, and Urban Indian Health Programs. The program awards up to $20,000 annually toward the repayment of health profession education loans.
A third option is the Health Professions Scholarship Program (HPSP) military scholarship from the Army, Navy, or Air Force. Two, three, and four-year scholarships are available. Each service branch takes 300 students per year, and the application process takes about three months. It’s a good idea to apply at the same time you begin applying for medical schools.
The HPSP covers civilian medical school tuition and fees. It also includes a monthly living stipend, and signing bonuses are offered in some cases. You will participate in a military match process during your third year of medical school. In some instances, HPSP recipients may fulfill their service commitment as a General Medical Officer (GMO) for a particular ship, submarine, air wing, or unit.
You can explore more options through the AAMC’s Loan Repayment/Forgiveness/Scholarship and Other Programs database. If you’re considering a service commitment, do your research carefully. Make sure these options genuinely appeal to you. If not, there are other ways to pay for medical school.
Part-time work during medical school may sound daunting, but it’s an option worth considering.
Many medical schools offer teaching assistant (TA) and research assistant (RA) positions. If accepted for one of these positions, you will help a faculty member with either teaching or research for about 20 hours weekly. These positions generally pay at least part of your tuition, along with a stipend.
Teaching and researching assistantships are merit-based and typically competitive. If you don’t get one of these positions, look into finding part-time work independently. Ideally, you’ll find flexible work, like online tutoring or freelance writing.
Earning an income while in medical school can help offset your student debt. Of course, you’ll need determination and excellent time management skills to pull it off.
Once you’ve exhausted these options, it’s time to look into loans. Start with federal loans, which offer better terms than most private loans. Federal student loans are offered through the FAFSA program and include HRSA loans. The Health Resources and Services Administration (HRSA) offers various loan types to schools, and schools then offered need-based loans to students.
These loans are long term and low-interest. Similar to service commitments, recipients must agree to serve in communities with limited access to medical care after graduation.
HRSA loan programs include:
- Health Professions Student Loans
- Loans for Disadvantaged Students
- Primary Care Loans
HRSA loans have interest rates as low as 5 percent. They may be deferred during advanced professional training and some fellowships, and they are interest-free while in deferment.
Other Federal Student Loans
Other federal student loans for medical school students include Direct Unsubsidized and Direct PLUS loans. Medical school students are not eligible for subsidized federal loans. Generally, these loans also have lower interest rates and flexible repayment terms.
Direct Unsubsidized loans have an interest rate around 6 percent, but this number can change from year to year. Because the loan is unsubsidized, it accrues interest from the date the loan is disbursed until the loan is fully paid. You are not required to make payments toward the loan while in school. These loans usually have a cap, meaning there’s a limit to how much you can borrow.
Direct PLUS loans have a slightly higher interest rate, around 7 percent. They allow you to borrow up to the total cost of attendance, because they are meant for students who have financial need beyond what the Direct Unsubsidized loan covers. Your school’s financial aid office will subtract your other estimated financial assistance from the school’s cost of attendance. If there’s a remaining balance, it can be covered by a PLUS loan.
Like the Direct Unsubsidized loan, interest begins accruing as soon as the loan is disbursed, but you don’t have to make payments while in school. First-time PLUS borrowers must complete virtual entrance counseling to ensure you understand the terms of the loan.
Federal loans can go toward your medical school tuition, living costs, and other education-related expenses.
Private Student Loans
Private loans are the final resort to consider. In most cases, the terms are less generous than those offered by the federal government. Private loans are issued by banks, credit unions, and other financial service companies. If you have poor credit or no credit history, you will need someone to co-sign your loan application. Most private student loans are taken out with help from a co-signer.
While federal loans have fixed interest rates, private loans offer both fixed and variable interest rates. This means the interest rate may change over time in response to changes in the market. You may also be required to start paying off private loans while you’re still in medical school.
If you or your co-signer have good credit, however, some private loans may offer you a better interest rate than federal loans. Make sure you shop around to multiple lenders to get the best possible rate and save money.
Final Thoughts: How to Pay for Medical School
Medical school is expensive, so worries about how to pay for medical school or how much debt you’ll have to take on are completely understandable.
But if you’re passionate about a future in medicine, it’s a worthwhile investment. Not only will you experience a challenging and rewarding career, but you’ll also earn a high salary.
Take time to explore the many ways you can pay for medical school and offset any student debt. Start by looking at your current savings, the possibility of a family loan, and any assets you can sell.
After that, look for money that doesn’t need to be repaid in the form of:
- Financial aid
- Service commitments (You will “repay” these scholarships/loans in the form of working in an underserved community or the military.)
Part-time work is another option, whether through an assistantship at your school or through offering services like tutoring or freelance writing.
Loans are a last option if these sources are not enough to pay for your education. Begin with federal loans, like the Direct Unsubsidized or Direct PLUS loan. If you don’t qualify for these loans, your final option should be a private loan, which may require a co-signer.
If you’ve decided that investing in medical school is worth it for you, rest assured that there are plenty of ways to pay for it.