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What’s The Average Medical School Debt In 2022?

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What’s The Average Medical School Debt In [year]?

A career as a physician can be a rewarding profession, but one that’s generally mired with student loan debt. The Association of American Medical Colleges (AAMC) reported that the median medical school debt among the Class of 2021 was $200,000, not including their undergraduate debt.

Different variables affect the average medical school debt that students graduate with. For example, whether a student graduates from a public school versus a private school greatly affects cost, as does attending an in-state versus out-of-state school.

During the 2021-22 academic year, the AAMC found that the average cost for med students to attend a public institution in their state was $38,947 a year. This included tuition, fees and health insurance. For students attending a private institution, the cost for the same academic year jumps to $61,023.

The significant cost increase to attend a private institution suggests that those students might also leave their medical program with more student debt.

Average Medical School Debt for Public School

For the class of 2021, the AAMC found that the average medical school debt among students attending a public school was $194,280. Seventy-four percent of med students at a public college said they had education debt.

In total, 14% of medical students attending a public school said they had at least $300,000 in average med school debt and premedical debt, combined.

Average Medical School Debt for Private Institutions

Conversely, the same graduating class that attended a private college left school with an average medical school debt of $218,746—almost $25,000 more debt than public school grads.

Of the students surveyed in the AAMC report, 70% of graduates at a private institution said they had education debt, with 27% of respondents citing a total premedical and medical school debt load of at least $300,000.

How Much Med School Debt Should You Borrow?

When reviewing a federal or private student loan offer, be aware that you aren’t required to accept the entire loan amount if you don’t need it.

How much you should borrow in medical school debt depends on your individual situation. First, submit a Free Application for Federal Student Aid (FAFSA) to see if you qualify for federal financial aid, such as grants. It’s also helpful to speak with your school’s financial aid office to learn about grant and scholarship opportunities provided by the state, your school or your department.

Determine the total amount of financial aid you’ve been awarded that doesn’t need to be repaid. Next, compare it to your medical school costs to see how much educational costs remain.

This gap is the amount that you might need additional medical school loans for if you don’t have other sources of funding like savings or family contributions.

Average Physician Salary

It’s also important to consider your future earning potential while in residency, as well as your estimated salary as a practicing physician.

As a medical resident or fellow, your income likely won’t be highly competitive. The AAMC found that the average stipend in a resident or fellow’s first year after medical school is $57,863.

After completing your residency or fellowship, your earnings as a practicing physician grow exponentially. According to the Bureau of Labor Statistics (BLS), the median annual wage of a physician is at least $208,000. Those practicing in high-wage specialties earn notably more; for example, an anesthesiologist earns an average annual salary of $331,190.

Although the average med school debt figures can feel jarring, there are ways to secure a manageable monthly payment throughout your journey to becoming a physician. There are also programs, like student loan forgiveness, that can cancel a significant portion of your federal loan debt upon meeting certain requirements.

How to Reduce the Amount You Must Borrow

While paying for medical school may be challenging, there are ways you can reduce costs and borrow less, including:

  • Save money early. If you’re not yet enrolled in medical school but know that’s the path for you, start saving money as soon as possible. For example, set aside any monetary gifts from family, and consider getting a part-time job during your undergraduate years to prepare for the cost of medical school.
  • Consider a lower-cost medical program. This includes sticking to a public medical program within your state to secure the lower resident-based tuition. You can also compare medical programs based on which school offers more generous scholarships or grants in its financial aid package.
  • Reduce other upfront costs. Adjust your day-to-day expenses as a medical student to lower your need for medical school loans. For example, consider living at home while you’re completing your med school program, or choosing to share housing costs with a roommate or two.
  • Prioritize alternative student aid. In addition to applying for federal aid to help lessen your reliance on student loans in med school, seek out alternative aid. This includes scholarships and grants from third parties like a local professional association. Although award sizes vary, every bit helps to avoid taking on more med school debt.
  • Focus on inexpensive loans, first. If you’ve exhausted all other free financial aid options and still need student loans, maximize federal student loans before borrowing other high-interest loans. Federal loans offer low, fixed interest rates and repayment protections that will likely be valuable during your residency years and beyond. You should only turn to private student loans or personal loans to fund your medical school education if it’s absolutely necessary.

How to Repay Medical School Debt

While in medical school or residency, it’s wise to continue making monthly payments instead of deferring your repayment timeline, if possible. One way to do this in a sustainable way is by enrolling your federal student debt into an income-driven repayment (IDR) plan. These repayment plans reduce your monthly payments to 10 to 20% of your discretionary income over 20 or 25 years, with some borrowers paying $0 per month.

Additionally, the IDR monthly payments count toward federal student loan forgiveness. After you complete the required loan term, any remaining balance left on your federal loan is forgiven. Similarly, if you’re already a practicing physician working for an eligible government or nonprofit employer, you might be eligible for loan forgiveness after making 120 qualifying payments.

Although private student loans are ineligible for IDR plans and federal student loan forgiveness, refinancing your private medical school loans is an option. When interest rates are low, a medical school loan refinance can help you potentially secure a lower rate that saves you money on your overall medical education debt.

If you’re considering refinancing your federal student loan debt, know that you’ll lose access to loan forgiveness programs and income-driven repayment options. Before doing so, be certain that you won’t need to rely on these lucrative programs along your journey to becoming a physician.

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