Making Your Dream a Reality: Paying for Medical School 101

The cost of medical school continues to rise with students graduating with an unprecedented amount of student debt. The average tuition for private medical schools has increased more than 46% and 136% since 1996.

Paying for medical school is not an easy feat. The average cost of medical school including tuition, health insurance and fees is $36,755 (2018-2019). Out of state residents at private medical schools can pay up to $63,000 a year. Over the course of the four years, students can be in debt from $200,000 to $500,000 and can spend years trying to pay off their student loans. However, this number should not deter you away from pursuing a career you are passionate about. There are ways to manage and pay for medical school, as well as diminish the amount of debt after the four years of schooling.  In an ideal world, students can utilize a 529 Savings Plan, a high yield savings account, or bonds accumulated over the years. A 529 Savings Plan is an investment account that offers tax savings and can be used for beneficiaries (the student) to pay for K-12 programs, university as well as post graduate programs. The downside of this program is that it requires one to be a U.S citizen or resident alien with a valid Social Security number. DACA recipients are encouraged to apply for a SS number to ensure that they receive these benefits as well. 

Sometimes, however, these options are not feasible and alternatives can be seeked out instead. The most common way medical students pay for school is through Direct Loans; medical students can only apply for unsubsidized loans which allows students to borrow money directly from the government and pay it back with an interest rate that accrues over time. It does not to be paid back right away however paying it in small increments surely will help. Direct Loans only cover the cost of attendance. If these loans are not enough, one can apply for additional scholarships and financial based  aid through the school of attendance. 

There are 7 different methods of repaying loans: Standard, Extended, Graduated, Income Contingent Repayment (ICR), Income-Based Repayment (IBR), Pay as You Earn (PAYE) and Revised Pay as You Earn (REPAYE). The first three, respectively are traditional plans that provide the lowest total repayment and can last up to 30 years. The income based plans are for direct loans only and provide affordable payments based on family size, gross income, and remaining balances after 20 years are forgivable but will be taxable. Refer to this chart by the AAMC to find out more information about each plan. 

Another great option to pay off med school debt is by committing to public service such as the Commissioned Corps, CDC, the NHS Corps, the NIH or the HRSA (US Department of Health and Human Services). Participants in the loan repayment program can get up to $120,000 for loan repayment. The Public Service Loan Forgiveness (PSLF) provides forgiveness for ANY remaining balances after 120 payments for any Direct Loan students have received. Qualifying service work includes working at teaching hospitals, Peace Corps, the public health sector, etc. Medical debt and the cost of attendance contributes to the considerable amount of people that decide to drop the medical pathway. However, with all of these options, it is important to explore what works best for you and your situational needs.  

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