In medical school, you may spend years mastering pharmacology, pathophysiology and patient care, but some aspects of life as a physician don’t get as much air time. Take personal finance; 15% of physicians in a Sermo poll identified it as the most under-addressed topic in medical training. “As repayment options evolve, financial literacy is becoming an essential skill for physicians, just as important as clinical training,” one endocrinology resident and Sermo member writes.
Indeed, student loan debt is prevalent among physicians. The median amount of medical student loan debt among the class of 2025 was $215,000, according to the Association of American Medical Colleges (AAMC). “Financial literacy is one thing I wish I knew as a medical student as well as a resident,” one emergency medicine physician shared on Sermo. But, even those with financial literacy are navigating shifts; the One Big Beautiful Bill Act (OBBBA) has reshaped the rules for physicians currently in repayment and those borrowing after July 2026.
Consider this article a practical guide to medical school debt repayment programs, how they work, which strategies accelerate payoff and where physicians lose the most money to avoidable mistakes.
Disclaimer: This article is for general informational purposes only and does not constitute financial, tax, or legal advice. Physicians should consult a qualified financial advisor or CPA for guidance tailored to their specific situation.
How much medical school debt do physicians actually carry?
More than 70% of medical graduates carry educational debt, according to the AAMC report. It noted that the median four-year cost of attendance for the class of 2026 was $297,745 for public schools and $408,150 for private schools.
Sermo poll data tells a more optimistic story among a sample of 815 members. When asked about their current balance, 64% of physicians reported being debt-free, while 17% owed under $100,000 and 9% carried between $100,000 and $250,000. As for payoff speed, almost half (49%) of respondents said they reached a zero balance in less than five years after finishing residency.
At least one member found the results to be unexpected: “I’m surprised to see that majority of physicians have $0 in debt,” they write. “I’m still in residency, so this brings me comfort in knowing that it’s very possible to pay off this debt mountain.”
Key repayment plans and programs for physicians
Repayment plans differ in cost, eligibility and long-term consequences. It’s an overwhelming decision for college students, according to an anesthesiologist on Sermo. “It’s very complicated and usually confusing, especially if you don’t have good budgeting skills at baseline and/or limit yourself in overall spending,” they note.
Compare your loan repayment options with a breakdown of the major programs available to physicians. Because these policies are evolving, physicians should verify current eligibility and rules with official federal sources before making decisions.
Income-Driven Repayment plans and the New RAP program
Income-driven repayment (IDR) plans tie your monthly payment to your earnings and family size, which makes them attractive during residency when your income is low. But OBBBA has overhauled this entire category with a new Repayment Assistance Plan (RAP).
The U.S. Department of Education called on federal student loan servicers to start charging interest starting August 1, 2025 on SAVE plan loans. The new RAP plan launches on July 1, 2026, making IDR plans no longer an option for new loans. By July 1, 2028, borrowers with existing Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans (additional types of IDR loans) will be transitioned to a plan under the new RAP unless they’ve selected another plan.
Under RAP, payments range from 1-10% of adjusted gross income (AGI) for those with AGIs over $10,000, or a $10 monthly payment for those who make less. The repayment period is up to 30 years.
Along with other changes, Grad PLUS Loans are eliminated for new borrowers after July 1, 2026, with a new $200,000 federal borrowing cap for professional degrees. (Pre-OBBBA, they could borrow up to a school’s full cost of attendance, according to the AAMC.)
Public Service Loan Forgiveness
Public Service Loan Forgiveness (PSLF) is a government-driven loan forgiveness program for those who work in service jobs. It’s remains an option for eligible physicians who have the following:
- Direct federal loans (not private or older FFEL loans)
- 120 payments made on an a qualifying plan (including all IDR plans)
- Full-time employment at a qualifying 501(c)(3) nonprofit or government employer
It is worth noting that physicians can run into mistakes that prevent them from taking advantage of PSLF, like making payments on an ineligible plan or failing to submit annual employment certification. Additionally, OBBBA may exclude residency and fellowship years from PSLF credit, preventing physician borrowers from relying on those early years to build toward 120 payments.
The appeal is clear for those who successfully qualify. “Currently hoping PSLF will be the easiest, most financially beneficial way to catch up by just paying minimums and investing the rest into retirement/401k,” one resident on Sermo shares.
Standard 10-year repayment
The standard 10-year fixed plan tends to have the highest monthly payments but the lowest total interest paid and shortest length of repayment. It’s a straightforward choice for physicians with manageable debt loads who don’t qualify for PSLF and want a guaranteed payoff date on the calendar. Despite the higher payments it’s a somewhat popular choice. In a Sermo poll, 27% of members said they chose standard repayment plans.
Refinancing: when it helps and when it hurts
Refinancing replaces your existing loans with a new private loan, ideally at a lower interest rate. Done right, it can save tens of thousands of dollars over the life of the loan. Competitive fixed refinancing rates for physician borrowers can range from roughly 4.0% to 5.5%, with variable rates starting around 3.5%. Your actual rate will depend on your unique refinancing terms, market conditions, and your borrower profile. There’s a catch: refinancing federal loans into private ones eliminates PSLF eligibility permanently. The general advice is to only refinance medical school loans if PSLF and other federal protections are definitively off the table for your situation. If there’s any chance you’ll pursue physician student loan forgiveness through PSLF, hold off.
Strategies for paying off medical school debt faster
Choosing a repayment plan is only half the equation. If you successfully pay off your loan faster, it can offer peace of mind. When Sermo asked members for their biggest “win,” in their debt journey, the most common answer (27%) was psychological relief from seeing their balance drop below six figures.
Here’s how you can pay off your debt faster once you’ve selected a plan:
Live like a resident
This is an approach based on simple logic. A physician earning $300,000 who maintains the $60,000 to $70,000 lifestyle from residency can direct $150,000 or more annually toward loans—potentially eliminating $200,000 in debt in less than two years.
The hard part is resisting the “lifestyle creep” that could absorb most of your attending income increase before it ever reaches your loans. Physicians can avoid this pitfall in a variety of ways. When asked about their most impactful financial sacrifice in paying off student loans, 33% of Sermo members cited travel and leisure, while 21% said they stayed put in resident-level housing. On the other hand, 26% admitted they hadn’t made significant sacrifices, prioritizing lifestyle over speed of payoff instead.
Some Sermo members who have taken this approach recommend it. “As quickly as possible, and with sacrifice, pay off your student loans,” advises one psychiatry and addiction medicine specialist. An internist writes that they “lived very frugally for five years” with their wife in order to pay off their medical school loan.
Others find this advice outdated. “The old advice to just ‘live like a resident’ and aggressively wipe out the balance has collided with a much more complex reality in 2026, forcing us to choose between psychological freedom and cold mathematical strategy,” a general practitioner stated.
Apply windfalls and signing bonuses to principal
Lump-sum payments are powerful because they hit principal directly, reducing the balance that future interest is calculated on. The average physician signing bonus in 2025 was $38,315, according to a report from the recruitment firm AMN Healthcare. Applying that bonus as a lump sum at the start of repayment can save tens of thousands in interest and shorten your repayment timeline. The same logic applies to tax refunds, year-end bonuses and any one-time income.
Use side income to accelerate repayment
Extra income directed entirely toward loans can shorten your repayment timeline. You can put income from locum tenens shifts, telehealth moonlighting and other physician side gigs toward your debt.
Lower-effort options exist too. Physicians on Sermo earn supplemental income through paid medical surveys, which 50% of Sermo members ranked as the most rewarding low-effort side gig. One family medicine doctor shared that doing “surveys has helped pay for some groceries and cheap vacations like camping,” but these amounts could also go towards your loans.
Employer loan repayment assistance programs
Don’t overlook money that your employer or the government may be willing to put toward your loans. Some hospital systems and government agencies offer loan repayment assistance as part of physician recruitment packages. The National Health Service Corps (NHSC) offers up to $50,000 in loan repayment for two years of service in a Health Professional Shortage Area. State-level programs vary. A practical move is to negotiate loan repayment assistance into your employment contract alongside salary.
Should you pay off loans or invest the difference?
With loans, you face a crossroads: you could aggressively pay down debt or invest the difference. The best choice depends on your interest rate, PSLF eligibility, specialty income trajectory and personal risk tolerance. There’s no universal right answer, only the right answer for your numbers.
A physician who invests early compared to a physician who prioritizes paying off debt first can end up with millions more in the bank, as Sermo previously reported. Still, investment returns are never guaranteed and many physicians argue for paying off debt quickly as a priority. “When it comes to debt management, it’s important to prioritize paying off high-interest debt and consider consolidating debt into a single loan with a lower interest rate,” one member writes.
When asked what they’d do with their old loan payment amount after reaching debt freedom, 29% of Sermo members said they’d keep living as if the debt remained to build an emergency fund, while 24% planned to divert the same amount into a brokerage account.
Achieve debt freedom
With the median physician student debt at $215,000, loan-repayment programs can be impactful. The OBBBA has ushered in changes, so you may need to shift if you have an existing plan. Whether you’re pursuing PSLF, weighing a refinance or committing to an aggressive payoff, you’ll need to determine which programs you qualify for and build a plan around your income, employer and timeline.
You can read accounts from other physicians as you explore your options. Join the Sermo community to compare real repayment timelines, swap financial planning strategies with peers who’ve been there or start earning supplemental income from paid medical surveys to put toward your loans.
