Becoming a doctor is a significant investment in terms of time, effort, and money. According to the Association of American Medical Colleges (AAMC), the median cost of attending a public medical school was $286,454 in 2024, and the median cost of attending a private medical school was $390,848. Few students can cover that on their own, which is most medical students rely on loans to pay for their education.
But medical school loans come with their own set of rules around what they cover, how much you can borrow, when interest starts adding up, and when repayment begins. Understanding all of that before you borrow can help you make smarter decisions throughout your training.
What do medical school loans cover?
Student loans for medical school can cover your full cost of attendance, a figure your school calculates each year. The cost of medical school typically includes tuition and required fees, but also living expenses like housing, food, and transportation, as well as books, supplies, and health insurance. You generally can’t borrow more than your school’s certified cost of attendance.
What types of medical loans are available?
Medical students have access to two main categories: federal loans and private loans. Here’s what to know about each option.
Federal student loans
Direct Unsubsidized Loans are available to graduate and professional students regardless of financial need, with no credit check required. They carry a fixed interest rate, which is 7.94% for the 2025–2026 academic year, but they limit how much you can borrow each year.
Grad PLUS Loans allow borrowing up to the full cost of attendance minus other aid, but they require a credit check and carry a higher rate (8.94% for 2025–2026). More importantly, Grad PLUS Loans are being eliminated for new borrowers beginning July 1, 2026, under the One Big Beautiful Bill Act (OBBBA).
Private student loans
When federal loans aren’t enough, private student loans can help fill the gap. Rates and terms vary by lender and depend on your credit profile. Unlike federal loans, private loans generally don’t offer income-driven repayment or loan forgiveness options, so it’s worth exhausting federal options first.
Can you borrow for all four years?
You can apply for loans each academic year you’re enrolled. How much you can borrow is changing, though. Under current rules, Direct Unsubsidized Loans are capped at $20,500 per year, with an aggregate limit of $138,500 (including federal loans from your undergraduate years). For certain medical programs, students may qualify for up to $26,667 on top of the standard cap, depending on the program.
Starting July 1, 2026, the OBBBA caps annual borrowing for professional students at $50,000, with a new aggregate professional school limit of $200,000. Since medical school can cost well over $200,000, many future students will need to supplement federal loans with private options.
How does interest accrue during medical school?
Interest on Direct Unsubsidized Loans, Grad PLUS Loans, and private student loans begins accruing as soon as funds are disbursed.
You can pay the interest as it accrues or let it accumulate. If you let it build up, it will capitalize once you enter repayment — meaning it gets added to your principal balance — and you’ll pay interest on a larger amount going forward. Even small payments during school can meaningfully reduce what you owe in the long run.
What happens to loans during residency?
Most federal and private loans include a six-month grace period after graduation, though some private lenders extend that to nine months. Either way, expect repayment shortly after you begin residency.
Residency can last anywhere from three to seven years, and residency income is significantly lower than what you’ll eventually earn in practice. The good news is that residents have a few options:
- Forbearance: Allows you to temporarily pause or reduce payments, but interest continues to accrue on all loan types. Over the course of a multi-year residency, that can add up to a significant amount of additional debt.
- Deferment: It’s similar to forbearance in that payments are paused, but for subsidized loans, the government covers the interest during this period. Since most medical school loans are unsubsidized, deferment functions much like forbearance for many residents.
- Income-driven repayment (IDR). IDR repayment plans base your monthly payment on a percentage of your discretionary income, which, as a resident, may be very low or even $0.
Learn More: Student Loan Deferment vs Forbearance & Other Alternatives
Planning Ahead Can Help
Understanding how medical school loans work puts you in a much stronger position to manage your debt thoughtfully. The earlier you start planning, the more flexibility you’ll have.
ELFI offers private student loans for graduate and professional students, including those in medical programs. If you need to fill the gap between federal loan limits and your cost of attendance, get a quote for ELFI graduate loans with no impact on your credit score.
