How Long Does It Take To Pay Off Medical School Debt?

Every medical school graduate carries 2 things with them on the journey forward: invaluable medical knowledge and enormous student debt. While the first one grooms them into fine professional individuals, the latter acts as a constant burden on their already overworked shoulders.

Fret not because you can ace this repayment procedure within 10-13 years by using the two-way compensation policy. Debt payment can be made either by direct reimbursement of the cash you earn at your earliest convenience or by dividing the refund amount such that you pay part of the loan directly and invest the rest of it in a lucrative project.

If you too have graduated from medical school in the recent or distant past and every day you wake up, you find a mountain of debt you borrowed to complete your degree looking back at you. I promise you you’re not alone.

I shared the same plight when I first graduated as a doctor 30 years ago, but with some effective guidance from a financial advisor friend of mine, my trouble didn’t last long.

Using the same financial knowledge with some added experience, I will guide you towards realistic yet convenient ways to get rid of your medical school debt.

All you need is some economic intelligence, rational thinking, concentrated focus, and just a tad bit of fiscal planning. 

According to Matt Carter, an expert on student loans, a medical graduate’s average debt equals $232,300 as of 2020, and the average time this student has for repayment is 13 years. After doing the basic math, you will find that the yearly payment of this amount seems next to impossible in today’s economic circumstances. 

Paying off this loan directly over a relatively shorter period of time works just as well as the partial investment procedure, but both these methods have their own pros and cons.

Direct Reimbursement or High-Interest Investment?

Direct Reimbursement or High-Interest Investment?

If we take the case of 2 students who graduated from medical school together but chose to pay their student debts in the 2 different ways described above, we’ll see that while the first one was able to reimburse the loan quicker, the second one ended up making more extra cash than was required for the refund.

I want to share a similar example of my colleague whose husband graduated from medical school with a gigantic amount of cash. Unfortunately, he would get more and more worried about the ever-increasing interest rate with every passing year.

To plan his loan reimbursement strategy, he followed Mr. Phil Town’s advice, an expert investment advisor, and decided to get rid of the bad debt first.

This is the kind of debt that one borrows at a high-interest rate and utilizes for a good or service, decreasing in value as time passes. Also, this kind of debt does not assist the debtor in generating any valuable income. 

So within 10 years of his graduation, this person successfully rid himself of all student debt and the additional interest amount just by making smart saving choices and keeping a fixed amount of money from his annual income solely for loan repayment. 

The only drawback of direct repayment of medical school debt is that it is more economically challenging for the student. Their financial conditions may suffer for some time under the circumstances that a huge chunk of their real income is being dumped into the payment of a loan taken decades ago.

But if you are wise enough, you can overcome this challenge as well with the method of efficient budgeting.

For example, if you are already spending millions on that vacation you planned abroad with your family, you will be devastated when you have to sacrifice that recreation and use the money for loan reimbursement instead.

Plan your expenditures wisely!

Plan your expenditures wisely!

Alternatively, you plan your expenses such that within the first decade of your professional career as a doctor, you limit them to the essentials such that your pocket gives you the cushion of refunding the debt first.

As you keep your expenses to a minimum and start minimizing the amount you owe to your medical school, you will automatically start feeling mentally relaxed. You will be able to continue living the life you want in no time.

We have another helpful article about how to get your life back on its financial track after getting rid of medical school debt.

Another friend of mine, an orthopedic surgeon and a successful investor, chose to take a different route for his medical school loan reimbursement.

With every bit of excessive cash he would gain in his professional career, he used a small amount for refunding part of his loan and invested a substantial chunk of it in a real estate project.

This method proved to be extremely beneficial for my friend as he did not have to end any of his existing expenditures, and his loaned amount also kept getting smaller and smaller with every passing year.

An important thing to consider about this loan repayment method is that it requires a substantial amount of money at the start of your reimbursement venture.

This amount of money needs to be large enough to allocate it towards both refunds and investment.

Also, the amount you invest should be large enough that the return on investment (ROI) you obtain from it should help you achieve your financial goal in the long run.

While my friend chose this method and pursued it until it bore the desired outcomes, this reimbursement policy might not work well for all medical school graduates aspiring to repay their loans.

This is because not all of us are in the same boat in today’s economy, and just like me, so many of you might also not have enough cash at your disposal that you can repay your student debt while also investing it under the same breath.

Another reason can be that not all of us might be facing circumstances as appropriate as my friend did, such as finding the right economically beneficial investment opportunity or not facing any other mega expenditure that could hinder your reimbursement procedure.

Considering these factors, I can confidently comment that this method is useful band involves many risks. But for those fresh medical school graduates looking forward to opting for this method, you must be careful of the chances involved and should always keep an eye out for low-risk and fixed-income investment opportunities.

What are some low-risk investment opportunities?

What are some low-risk investment opportunities?

Low-risk investment opportunities are those in which the market rates fluctuate relatively lesser than other fields. Investing in government bonds, dividend-paying stocks, and Treasury Inflation-Protected Securities are some of the safest ways to secure your finances such that they multiply over time and allow you to repay your loan.

But one thing I would like to remind you that the safer investment you make, the most likely you are to receive a lower investment return. 

But again, being a student, these safe investments are the most lucrative for you because your financial stability is not threatened in these.

In a different scenario, high-interest and high-risk investments may also prove feasible for you in cases where you have a degree of stable financial backing in the form of inherited family wealth.

You can use this money for a high ROI investment which has an added risk because the financial stability of your household is not directly dependent on this capital.

If you make such an investment, you have exponentially greater room for economic success based on a large amount of your invested money. 

While we’re talking about your journey of getting rid of the medical school debt, I would also like to comment on the social hindrance that an ex-student might face during the process.

For example, many of my friends feel discouraged because the debt repayment today is taking them much longer than the time our previous generations took to repay their student loans.

Even worse than that, many young doctors feel like they are not working hard enough or have gotten rid of the loan by now. 

To all such fellows, I would like to reiterate that it is not your fault because today, the amount of student debt combined with the rate of inflation and the high interest has soared to heights that have never been breached before.

According to AACOM COA Report 2016-17, the debt levels have quadrupled in the last 20 years.


With the levels of debt multiplying four times within two decades, it is only fair that financial advisors like me assist young doctors like you to the best of their abilities to fight the common enemy: medical school debt.

Paying back your medical school loan sure seems like a hard nut to crack, but with a little financial intelligence and determined focus, you can take this burden off your shoulders in no time. 

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