Medical school is a significant investment of time, emotion, and money. The courses, exams, boards, and rotations are enough of a grind; affording your education and living expenses is no easy endeavor, either.
In fact, the average cost of Medical school during the 2024-25 academic year was $59,720. Between the bachelor's degree and doctorate, recent graduates paid over $371,000 on their tuition and fees. Many students can't pay this money out of pocket, but student loans for medical students can help make earning their degree a reality.
Here's what you need to know before deciding how to fund medical school.
Type of student loans for medical students
Federal
Most medical students can take out direct unsubsidized loans from the U.S. Department of Education, which can be used towards education-related expenses. To apply, you need to complete the Free Application for Federal Student Aid (FAFSA) each year.
If approved, you can borrow up to $50,000 in direct unsubsidized loans a year (up to $200,000 in total federal student loans over several years) as of July 1, 2026. The exact amount depends on your school's cost of attendance (COA) minus other forms of financial aid. Unsubsidized loans don't require demonstrated financial need, but interest begins accruing immediately at a fixed rate.
Direct subsidized loans are not available to graduate and professional students, and the government is ending the Graduate PLUS program on July 1, 2026.
Private
Some medical students need to take out student loans from private lenders, such as banks and credit unions, to cover any remaining balance they have between the institution's cost of attendance and their financial aid package.
Unlike the FAFSA, private lenders' applications and loan programs require credit checks. Your credit check and the lender will determine how much you're able to borrow, your interest rate, whether the interest rate is fixed or variable, term length, and minimum monthly payments. If you don't have strong credit, you may have to apply with a co-signer.
Private student loans can be used for education-related expenses, and some lenders offer residency loans, which helps cover living expenses, travel, test fees, test prep, and more during medical residencies.
Depending on the lender, you may have to start making payments on the loan right away or defer payments until after you leave school or graduate. Interest starts accruing as soon as you receive the money.
Federal vs. private student loans
In general, federal student loans may have lower interest rates than private loans. However, strong credit could mean you qualify for a low interest rate with a private loan. Federal loans also tend to have more forgiveness programs should you run into financial emergencies and are unable to make payments.
This table breaks down some other differences you should know:
| Federal Direct Unsubsidized Loans | Private loans | |
| Interest rate | The same for all borrowers | Determined by creditworthiness |
| Fixed or variable | Fixed only | Fixed or variable |
| Borrowing limit | Determined by COA - financial aid package, up to $50,000/year. ($200,000 lifetime limit). | Varies by lender |
| Fees | Origination fee of 4.288% | Usually no origination fees |
| Credit check | No | Yes |
| Loan forgiveness programs | Yes | No |
| Residency loan availability | No | Yes |
Are there loan forgiveness programs for medical students?
Medical students who took out direct loans and work for the government or a non-profit organization may be eligible for the Public Service Loan Forgiveness (PSLF) Program. If you're approved and you've made 120 qualifying monthly payments, you could have the remaining balance on any federal Direct Loans forgiven.
Are there loans for medical residencies?
The costs of applying and interviewing for these residency programs can add up in a hurry. For example, if you're in school in Boston but interviewing for a residency at a Chicago hospital, you'll need to book airfare and perhaps a hotel room, costs that aren't covered by your traditional student loans.
Some private lenders offer residency loans that cover those expenses and others, including:
- Exam fees and prep courses for medical board certifications
- Relocation and living expenses before starting a residency program
Note: Some private lenders offer residency loans to cover interview and travel expenses as you apply for programs.
The residency loan lasts up until you start your residency. At that point, you'll be earning an income that will help cover your living and other expenses.
What to remember
Attending medical school is stressful enough. You don't need to throw financial stress into the mix. Understanding and comparing your options now can help you tackle and pay for that medical degree with confidence.
Need help funding your dream? Learn about Citizens medical student loan options.