Financing Medical School: How to Find Scholarships, Grants & Loans

Before donning your own white doctor's coat, you must devote a dozen or more years to training, which includes countless hours of studying, attending classes, taking exams and mandatory hospital experience. Also rigorous is the financial cost of medical school — the most expensive of all graduate schools. The average medical school debt the past few years has been over $190,000, according to the Association of American Medical Colleges.

Now's the time to assess your financial situation. You'll likely face another round of financial-aid applications, as you did for your undergrad education, but this time, your parents may not be contributing to your med-school costs. Even if you've been working since graduation, you'll probably still need more money to cover the cost.

Here's what you need to know as you begin addressing the cost of your medical education:

Taking some simple steps before you send out applications can greatly help your chances of success.

The average tuition for a first-year student at a private medical school in the U.S. in the 2018-2019 school year was nearly $60,000, highlighting the overwhelming need for financial aid. Medical school students have several student-loan options.

Most students find that the Unsubsidized Federal Stafford Loan is the most attractive medical school student loan because of its favorable terms. (See the MoneyGeek Paying For College page to learn the difference between a subsidized and unsubsidized student loan.) You don't need to demonstrate financial need, and its fixed interest rate — 6.08 percent for graduate students — is lower than other student loans. Although interest begins to accumulate as soon as you take out the loan, you won't need to start repaying until after you graduate. The repayment period typically is 10 years, and a 1.059 percent loan fee applies.

Although the government sets an annual loan limit of $20,500 — and a cumulative loan limit of $138,500 —the amount you are ultimately eligible for may be less than these amounts. This is because your medical school uses your FAFSA information, its COA and any other supplemental application materials it requires you to complete to determine your loan amount.

In many cases, medical students turn to Graduate PLUS loans when their Unsubsidized Stafford Loan amounts don't adequately cover the full amounts they need. Graduate PLUS loans also are unsubsidized, so the government does not pay for any interest that accrues on the loan, even though interest begins accumulating as soon as you take out the loan.

The fixed interest rate — 7.08% — is higher than the Unsubsidized Federal Stafford Loan, and your maximum loan amount depends on your school's COA less any other financial aid you receive. You can hold off on repaying the loan until after you leave school, but once you do begin, the repayment period lasts 10 years. A loan fee of 4.236% also applies, and you may need a co-signer, such as your parent, if you have poor credit.

Medical schools also provide student loans, and most of them are need-based. Medical schools consider your financial resources, including any spousal income, in determining whether to extend a loan.

You'll need to contact your candidate medical school directly to determine available loan amounts and the school's precise terms. For the most part, annual loan amounts are comparatively small, such as $4,000 or $5,000. These school-funded loans typically have relatively low fixed interest rates — hovering around 5%, for example. And you can also defer the start of your repayment period for two or three years or take advantage of a grace period lasting several months. In some cases, the school subsidizes interest on the loan until your repayment period begins.

Scholarships of all breeds and sizes are available to assist students with the financial costs of a medical education. The eligibility requirements for these scholarships vary. Organizations and institutions may award them based on the student's financial need, merit, heritage, medical specialty, residence, community service and other criteria. Many scholarship foundations require students to be U.S. citizens or permanent residents.

Medical schools also offer their own scholarships, so you should check with your candidate schools to see whether you meet their eligibility requirements. Most medical schools use financial need as a selection criterion, and only a few — such as the University of Virginia and Washington University in St. Louis — offer merit-based scholarships. You'll find a list of scholarships for medical school students below.

It may be worth your time to explore loan-repayment programs to determine whether you can receive assistance from an organization to help you cancel, forgive or repay your medical school loans. Repayment programs offer medical students with qualifying federal student loans the opportunity to have portions or entire balances of their loans forgiven after completing a certain number of payments or service commitments in qualifying areas.

If your medical school loan is a federal student loan, you may choose to structure a more viable, long-term repayment strategy through the federal government's Income-Based Repayment Plan (IBR). IBR caps your repayment amounts based on your income and family size. You qualify based upon a combination of low income and high debt amounts. Any remaining federal student loan balance is forgiven after 20 years of payments.

Repayment assistance is available to medical professionals or students who work in underserved locations or high-need areas through the National Health Service Corps. For example, the NHSC offers final-year medical students up to $120,000 each for three years of full-time commitment at approved sites in certain Health Professional Shortage Areas. You can find details about the Students to Service Loan Repayment Program, or S2S LRP, on NHSC's website. Some states, through the NHSC, also offer repayment programs to those medical professionals who provide primary care in the state. You can find details about NHSC's various programs on MoneyGeek's loan-forgiveness summary page.

The National Institutes of Health (NIH) also provides monetary incentives to medical professionals by providing loan repayment for an individual who commits to working at least two years in research. As a non-NIH employee, you would conduct qualifying research outside the NIH (extramural research). Your research must fall in one of these five areas:

Emergency physician James Dahle, M.D., educates medical professionals about personal finance and investing through his blog, The White Coat Investor. He is the author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing, a manual that covers financial issues facing medical students, residents, physicians and other high-income professionals, including tips for graduating from medical school with minimal debt. Here he explains financing strategies for medical students.

A graduate of the former University of Medicine and Dentistry of New Jersey (which was dissolved in 2012 and merged into the Rutgers School of Biomedical and Health Sciences). In his non-traditional path to becoming a doctor, Dr. Ding earned a business degree from Indiana University (Bloomington) and worked for an accounting firm for several years. Through his website MedicalSchoolSuccess.com, he shares his experience about seeking admission to and succeeding in medical school. Here, Dr. Ding talks about minimizing debt burden as part of a successful career.

These additional resources provide useful information about paying for your medical school education.

Association of American Medical Colleges (AAMC)
Association made up of medical schools — including all accredited U.S. medical schools — teaching hospitals, health systems, VA medical centers and academic societies. AAMC offers a useful, searchable database of state and federal repayment programs, loans, and scholarships.

American Medical Association (AMA)
Largest nationwide organization of physicians and medical students. The AMA provides an extensive list of financial aid resources relating to medical education, including scholarships and grants.

Educational Commission for Foreign Medical Graduates (ECFMG)
Essential resource for foreign medical students or physicians seeking information about practicing medicine or furthering their medical educations in the United States. This private, nonprofit organization evaluates international medical graduates and physicians and certifies them as part of the process of allowing entrance to a medical education program — such as residency or fellowship programs — or obtaining licenses to practice medicine in the United States.

National Committee on Foreign Medical Education and Accreditation (NCFMEA)
A list of countries whose medical school accreditation standards are comparable to the accreditation standards used in the United States. This resource is relevant for students interested in pursuing their medical educations at foreign medical schools and who wish to be eligible for federal student loans to finance their studies. The NCFMEA reviews other countries' standards to accredit their medical schools and assesses whether those standards are comparable to those used in the United States.