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When you’re facing a potential recession, financial decisions take on a new weight. But figuring out how to prepare for a recession can be difficult. After all, financial policy may change during a recession, which can leave consumers with questions. For example, if the Federal Reserve lowers interest rates, should you borrow during a recession?

While lower recession interest rates might sound appealing, there are lots of things to consider before borrowing money during a recession.

Understanding Recessions

A recession is a period of time when economic activity significantly declines. In the U.S., the National Bureau of Economic Research defines a recession as more than a few months of significant decline across different sectors of the economy. We see this decline in changes to the gross domestic product, unemployment rates, and incomes.

Spending drops during a recession. As a result, businesses ramp down production, lay off staff, and/or close altogether, which in turn causes a continued decrease in spending.

There are many possible causes of the recession — they can be economic, geopolitical, and even psychological. All coincide to create the conditions for an economic downturn. For example, a recession could be caused by a major disruption in oil access due to global conflict, or by the bursting of a financial bubble created by artificially depressed interest rates on home loans during a financial boom (as was partially the case with the 2008 financial crisis in the U.S.). Consumers can recall the deep but fortunately brief recession of early 2020 caused by the pandemic, which created supply chain disruptions, forced businesses into failure, and changed spending habits.

As for how psychology plays a role in recessions, financial actors might be more likely to invest in a new business or home renovation during boom years when the market seems infallible. But when an economic downturn or recession starts, gloomy economic forecasts could make people more likely to put off big purchases or financial plans out of fear. In aggregate, these psychological decisions may help control the market. Many people avoiding spending out of fear could cause a further contraction, and consequently further a recession.

Financial Policy During a Recession

Economic policy might temporarily change in an effort to keep the market relatively stable amid the destabilization a recession can bring. The Federal Reserve, which controls monetary policy in the U.S., often takes steps to curb unemployment and stabilize prices during a recession.

The Federal Reserve’s first line of defense when it comes to managing a recession is often to lower interest rates. The Fed accomplishes this by lowering the interest rates for banks lending to other banks, called the Federal Reserve Rate. That lowered rate then ripples throughout the rest of the financial system, culminating in reduced interest rates for businesses and individuals.

The Federal Reserve also may take other monetary policy actions in an attempt to curb a recession, like quantitative easing. Quantitative easing (QE) is when the Federal Reserve creates new money and then uses that money to purchase assets like government bonds in order to stimulate the economy.

The manufacturing of new money under QE may help to fight deflation because the increase in available money lowers the value of the dollar. Additionally, QE can push interest rates down because federal purchasing of securities lowers the risks to lending institutions. Lower risks can translate to lower rates.

Recommended: Federal Reserve Interest Rates, Explained

How Interest Rate Changes During a Recession Affect Consumers

As we’ve seen, during the early phase of a recession, the Federal Reserve typically cuts interest rates in an effort to jumpstart the economy. During the Great Recession of 2007-2009, for example, the Fed did a total of 10 rate cuts that brought the Federal Funds Rate to almost zero.

The Federal Funds Rate is used by banks to guide interest rates on savings accounts, certificates of deposit, and by credit card companies and other lenders as well. Lowering the interest rate could help to stem a recession by decreasing costs for businesses and allowing consumers to take advantage of low interest rates to buy things using credit. The increase in business and purchasing might in turn help offset a recession.

Auto loans and student loan rates are also affected by changes in the rate. Although mortgage rates don’t directly follow the Federal Funds Rate, changes in the rate do impact the bond market and may thus have a downstream effect on home loans.

Risks of Borrowing Money During a Recession

How do you prepare for a recession? And should you borrow during a recession? It might seem smart to borrow during this time, thanks to sweet interest rates on personal loans during recession, for example. But there are other considerations that are important when deciding whether borrowing during a recession is the right move. Keep in mind the following potential downsides:

•   There’s a heightened risk of borrowing during a recession thanks to other difficult financial conditions. Disruptive financial conditions like furloughs or layoffs could make it more difficult to make monthly payments on loans. After all, regular monthly expenses don’t go away during a recession, so borrowers could be in a tough position if they take on a new loan and then are unable to make payments after losing a job. Missed payments could negatively impact a borrower’s credit score and their ability to borrow in the future.

•   It may be harder to find a bank willing to lend during a recession. Lower interest rates may mean that a bank or lending institution isn’t able to make as much money from loans. This may make lending institutions more hesitant.

•   Lenders could be reluctant to lend to borrowers who may be unable to pay due to changes in the economy. Most forms of borrowing require borrowers to meet certain personal loan requirements in order to take out a loan. If a borrower’s financial situation is more unstable due to a recession, lenders may be less willing to lend.

Benefits of Borrowing During a Recession

If you are well positioned to withstand the economic hits of a recession, borrowing money can have some benefits. Borrowers who take out a personal loan during a recession often benefit from low interest rates.

If you already have debt, perhaps from existing credit cards or personal loans, you may be able to consolidate your debt into a new loan with a lower interest rate, thanks to the changes in the Fed’s interest rates. Consolidation doesn’t necessarily increase the total amount of money you owe. Rather, it’s the process by which a borrower takes out a new loan — with hopefully better interest rates and repayment terms — in order to pay off the prior debts.

When to Consider Borrowing During a Recession

As we have seen there are situations where personal loans during recession or other forms of borrowing might make sense. If you’re hit with unexpected expenses or have the opportunity to buy quality stocks for a lower price, for instance, it could make sense to have extra funds available. Personal loans tend to have lower interest rates than credit cards, so opting for a personal loan could be a better financial choice than running up credit cards trying to cover expenses during a downturn.

Another scenario where it might be a good idea is if you’re consolidating other debts with a consolidation loan. Why trade out one type of debt for another? Credit cards often have high interest rates. So if a borrower has multiple credit card debts with high interest rates, they may be able to refinance credit card debt with a consolidation loan with a lower interest rate. Trading in higher interest rates loans for a consolidation loan with potentially better terms could save borrowers money over the life of the loan. It also streamlines bill paying.

It’s important to understand how debt consolidation works before proceeding with this option. When considering consolidation, focus on consolidating only high-interest debt. Comparing the interest rates of your current debt with that of a potential consolidation loan can guide your decision.

Note that interest rates on consolidation loans can be either fixed or variable. Fixed-rate recession loans allow borrowers to potentially lock in a lower interest rate. With variable-rate recession loans, the interest rate could go up as rates rise after the depths of the economic downturn.

Additionally, as with other loan types, consolidation loans require that borrowers meet certain requirements. Available interest rates may depend on factors like credit score, income, and creditworthiness.

Recommended: How to Apply for a Personal Loan

When You Should Avoid Borrowing During a Recession

Borrowing money in a recession has its risks. If your ability to repay the debt you take on is dependent on your employment income, you’ll want to take steps to ensure your job is solid before adding to your debt burden. Unemployment during the Great Recession of 2007 surged to 10% and many people who never thought twice about job security were blindsided by layoffs.

If taking on new debt involves collateral, as it would if you guaranteed a loan with your home, for example, you’ll want to double- and triple-check your ability to make those payments. An unsecured loan may be a safer bet at this time.

Alternatives to Borrowing During a Recession

Whether you are trying to keep a small business afloat, helping out a family member who has been laid off, or just need additional cash on hand for your own expenses during a recession, there are other options besides borrowing.

Tap Emergency Savings

If you’ve saved money in an emergency fund, a recession is the time to set it free. “An emergency fund is intended to be used at a moment’s notice. For the most part, you’ll hear that a healthy emergency fund should cover between three and six months worth of living expenses — which would include rent, mortgage, bills, food, and other essentials. And since you never know when an emergency might happen, it’s best to keep your fund relatively liquid,” notes Brian Walsh, CFP^®\ and Head of Advice & Planning at SoFi.

Adjust Your Budget

Spending cutbacks are common in a recession, and now’s the time to examine where your money goes and look for extras you might trim back to stretch your income or any savings you are tapping. This could be anything from quitting streaming services and getting a library card to making your own coffee and taking your lunch to work. If you have a sizable chunk of your monthly budget devoted to paying down credit card debt, examine those costs vs. the cost of a monthly payment on a debt consolidation loan. Renting? Don’t renew your lease without a careful examination of the market. Lowering housing costs is a way to free up cash.

The Takeaway

It can be challenging to navigate any economic downturn, and it’s natural to wonder how to prepare for a recession. Borrowing money in a recession, such as by taking out a personal loan, is a decision that depends on your specific circumstances. There are downsides to consider, such as the general economic uncertainty that can increase risk and heightened risk-aversion from lenders. But if you have high-interest debt and can secure a lower rate by consolidating, then taking out a consolidation loan during a recession could make sense. Weigh the risks and benefits carefully as you make your decision.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

Is it good to have money in the bank during a recession?

The general consensus is that banks are a safe place to keep your cash during a recession. If your account is insured by the Federal Deposit Insurance Corporation (FDIC), then individual deposits up to $250,000 are protected. Banks also protect funds against theft or loss.

Is it better to have cash in a recession?

It’s a good idea to have some of your money in cash during a recession. That’s because if you’re laid off from your job or an emergency arises, it can be helpful to have a cushion of readily accessible money.

Should I withdraw all my money during a recession?

If you’re thinking about how to prepare for the recession, it can be tempting to want to take out all of your money from a bank. But there’s good reason to reconsider. Many banks are FDIC insured, which means deposits up to $250,000 are protected.

Is it a good idea to take out a loan during a recession?

If you are confident that you can make loan payments even if the downturn is sustained and you lose your job, you may be fine taking out a loan during a recession. And if taking out a loan helps you consolidate high-interest debt into a lower-interest personal loan, it could help you save money.

What types of loans are best during a recession?

An unsecured personal loan may be a safer bet during a recession than a loan that is secured by your home, such as a home equity loan. Being unable to keep up with payments on a secured loan could put your home at risk of foreclosure.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q226-026

Debt is a slippery slope. You can be doing just fine when an unexpected bill starts a slide. Maybe you use a credit card or three to keep up for a while. But one setback — such as a major car repair — throws you off balance again, and eventually debt begins to swallow you up.

But there’s good news. First, you’re not alone. Second, millions of people like you have dug themselves out of debt using the debt avalanche method. This debt reduction strategy focuses your efforts on the debts with the highest interest rates. Keep reading to learn the advantages and disadvantages of this strategy, as well as some proven alternatives for paying off debt.

Understanding the Debt Avalanche Method

The debt avalanche method is all about the interest rate. Essentially, you’ll make the minimum payments toward all of your debts but put anything extra you can (bonuses, tax refunds, that $20 your grandma stuck in your pocket) toward paying off the high-interest debt at the top of the list. When it’s paid off, move on to the debt with the second-highest interest rate and so on.

Fans of the debt avalanche method laud its efficiency. The most expensive debt is ditched first, which can be a big money saver. And the amount of time it takes to get out of debt overall is cut, too, because less interest accumulates every month.

Debt Avalanche Method vs Other Payoff Strategies

The avalanche method is for rational thinkers. But when it comes to money — and life in general — humans tend to follow their guts. That’s why some people prefer the avalanche method’s more emotionally available cousin, the snowball method.

With the snowball method, the steps are much the same, but you start your list with the smallest balance and work your way toward the largest, disregarding the interest rate. The idea is that those first targets can be knocked down quickly, creating a sense of accomplishment that helps keep you on task until it becomes a habit.

There are pros and cons to each method. If you use the avalanche method, it may take longer to move from one debt to the next. Also, this method assumes that paying off debt as quickly as possible is always the right thing to do. But there are other factors to consider, such as your credit score. That said, if you have a larger balance with higher interest rates, you could save money over time.

If you plan to pay off debt with the snowball method, you’re more likely to experience quick wins, which could help you stay motivated. But you probably won’t save as much on overall interest as you would with the avalanche method.

If you have multiple high-interest balances, you may want to consider a debt consolidation loan. These personal loans roll several debts into a single loan, which ideally has a lower interest rate. This approach can be a smart move if you’re able to stay on top of monthly payments and have a strong credit score.

Implementing the Debt Avalanche Method

Interested in trying the debt avalanche method? It helps to get your finances organized first.

First, make a budget. Find ways to trim the fat from anything you can — dinners out, streaming services — so you’ll have more cash to pay toward that smothering debt. If you need help, here’s a guide to the 70-20-10 rule of budgeting.

Then, make a list of all your debts. Start with the loan or credit card that has the highest interest rate and work your way down to the one with the lowest interest rate. Continue to make the minimum payments on all your debts, but put anything you can (bonuses, tax refunds, that $20 your grandma stuck in your pocket) toward paying off the high-interest debt at the top of the list.

When the first debt on your list is paid off, cross it off, and move to the next debt on your list. Roll whatever payments you were making on the first debt into the second debt, adding it to the minimum payment. When that debt is paid off, do the same with the third on the list. As you continue paying off outstanding debt, you should have more and more money to put toward the next target balance. Keep going until you’ve plowed through each debt on your list and can declare yourself debt-free.

Depending on how much you owe, it could take some time before you’re able to move from one debt to another. Adopting sound financial habits, such as tracking spending and using a budget app, can help you stick to your payoff plan.

Is the Debt Avalanche Method Right for You?

Using the avalanche method to pay off debt isn’t necessarily a good fit for everyone. The method is great for disciplined, analytical thinkers who get excited by the knowledge that they’re playing the long game. To make this approach a success, it helps to be the type of person who is self-disciplined, self-motivated, self-aware, and capable of celebrating self-made milestones.

Alternative debt payoff strategies, such as the snowball method or a personal loan, may make more sense for your lifestyle, financial situation, and personal preferences.

Here are some questions to ask yourself as you weigh your options:

•   What are my short- and long-term financial goals?

•   Do I have high-interest debt?

•   Do I need a series of quick wins to stay motivated?

Maximize the Benefits of the Debt Avalanche Method

Before you begin tackling debt with the avalanche method, consider some strategies to get the maximum benefits:

•   Accelerate debt repayment. Paying off your balance doesn’t just relieve stress — it can also save on interest. Kick in more than the minimum payment each month. And if your lender and budget allow, make extra payments.

•   Build an emergency fund. While whittling down debt is the priority, it’s also a good idea to sock away money into an emergency fund. Determine a target amount — a good rule of thumb is to have enough to cover three to six months of expenses. Then, open a high-yield savings account, and add to it regularly.

•   Seek the help of a professional. Looking for personalized guidance? Consider meeting with a financial advisor who can examine your current finances, discuss your financial goals, and help you create a plan to achieve them.

The Takeaway

Using the debt avalanche method is a great way to pay off debt for disciplined, logical personalities who want to maximize their savings on interest. The avalanche method works by paying down the highest-interest debt first, regardless of balance, while making minimum payments only on other debts. It’s not for everyone, though, especially if your highest-interest debt is also your biggest balance.

If quick wins help you stay motivated, consider paying off debt with the snowball method. Instead of focusing on the interest rate, borrowers prioritize the lowest balance first. A debt consolidation loan is another potential avenue to explore, as you can roll multiple high-interest debts into a single loan with (hopefully) a better interest rate.

The key to any debt payoff strategy is to know yourself and choose the method that best fits your preferences and financial goals.

Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.

FAQ

How long does it take to pay off debt using the avalanche method?

While the avalanche method tends to whittle down debt faster than making minimum payments each month, the time it takes for you to pay off your balance will depend on several factors. These include the amount you owe, your interest rate, and how much extra you’re able to pay each month.

Can the debt avalanche method be used for all types of debt?

The avalanche method isn’t suited for every type of debt. Consider using it to pay off credit cards, personal loans, student loans, and car loans, but don’t include your mortgage, as financial experts consider this “good” debt. One day, you may decide to put extra money toward paying down your mortgage principal, but for now, focus on your other debts.

What should I do if I have multiple debts with similar interest rates?

When faced with paying down multiple debts with similar interest rates, the snowball method may be your best approach, as it involves paying off your lowest balance first while making minimum payments on your other debts. If the interest rates are high, you may want to explore a debt consolidation loan. That’s where you take out one loan or line of credit (ideally with a lower interest rate) and use it to pay off other debts.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SOPL-Q226-007

If you’re thinking about becoming a doctor and wondering, how much is medical school?, it’s a good idea to understand the total expense upfront. The average cost of medical school is $228,959 in total, according to the Education Data Initiative. The yearly cost is $59,720, and there’s an average increase of about $1,511 each year.

Seventy percent of medical students rely on student loans to help pay for the cost of medical school, and the average medical student graduates with just over $246,659 in total student loan debt (this includes debt from their undergraduate degree).

The average physician salary ranges from an average of $297,000 for primary care doctors to an average of $404,000 for specialists, with some specialties making close to $600,000 per year. While these numbers are well above the national average wage of $64,220 per year, paying for medical school and paying off medical school student loans is still no easy feat.

How to Pay for Medical School

With the average cost to become a doctor being well above six figures, affording their education is one of the biggest hurdles future medical students face. However, by being proactive about finding ways to pay for medical school, med students may be able to reduce their overall student debt.

Scholarships

Scholarships aren’t always easy to get at the graduate level, but it’s not impossible. Some schools offer merit-based scholarships to incoming medical students who show exceptional academic capabilities and have a unique life experience. Students can also look into more individualized scholarships geared toward their location, specific area of study, or previous work experience.

Scholarships are offered by colleges and universities, businesses, local organizations, churches, and more. While it may take some time to search for scholarships you qualify for, the end result could save you thousands in medical school tuition expenses.

Military Service

With the rising cost of medical school, some medical professionals choose to obtain their medical degree by participating in a military physician program. The qualifications and commitment for each program vary, and the separate branches of the military, including the Army National Guard and Navy Reserve, have different programs.

The two options for medical students in the military are the Health Professions Scholarship Program and Uniformed Services University of the Health Sciences. Both programs pay for the cost of medical school but require a service commitment once the student graduates.

Federal Financial Aid

The first step in getting federal student loans is to complete the Free Application for Federal Student Aid (FAFSA®). Students can check with the medical school they plan to attend to get filing date requirements and information on institutional financial aid (aid given by the school).

There are three types of federal student aid:

•   Grants: Grants, such as the Pell Grant, do not have to be paid back unless the student withdraws from school and owes a refund. Grants are needs-based and the maximum amount for the 2026-2027 academic school year is $7,395.

•   Work-Study: Federal work-study jobs are needs-based and help students earn money to pay for school through part-time employment. A bonus for medical students is that the work is often tied to community service or may be related to the student’s course of study, so this type of job may be more interesting and manageable than some others.

•   Federal Loans: A student who borrowed money as an undergraduate and demonstrated financial need may have been awarded a Federal Direct Subsidized Loan to help cover school costs. Those types of federal loans are not available to students in graduate and professional school programs.

However, medical students are eligible for other federal loans. They may receive a Direct Unsubsidized Loan, which is not based on financial need, or a Direct PLUS Loan, which will require a credit check.

Private Student Loans

Private student loans are usually used once federal student loans have been exhausted. Based on federal loan limits and the cost of medical schools, medical students may need additional funding to cover the gap. Certain private student loan lenders, including SoFi, allow borrowing up to 100% of the cost of attendance.

To get a private medical student loan with a competitive interest rate, a borrower generally needs to have a strong credit profile and a low debt-to-income (DTI) ratio. If a borrower doesn’t meet these qualifications, they may want to consider using a cosigner to get a better rate.

Have a Budget Plan in Place

Finding the right resources to pay for medical school is important, but learning to live within a budget can also help med students reduce their average medical school debt. Medical students who started with a spending plan as undergraduates can probably modify what they’ve already been doing. But, it’s never too late to start budgeting.

Once a student determines how much will be coming in from various sources (work, family, loans, scholarships, etc.), the next step is to list what will be going out for tuition and fees, housing, food, transportation, and other costs.

Next, it’s a good idea to see where you can cut back on spending. Is there inexpensive public transportation available? Will you have roommates to split rent and utility bills? Other ideas to reduce expenses include meal planning and cooking at home, canceling subscription services, and buying in bulk.

By living on a budget while in medical school, you may be able to take out less in loans, pay off your loans quicker, and set yourself up for financial success down the line.

How to Pay Off Medical School Loans

It’s no secret that physicians have the potential to earn a higher-than-average salary once they finish their residency and start practicing. Here are the average annual salaries of a variety of medical specialties:

•   Orthopedics: $564,000

•   Plastic Surgery: $544,000

•   Cardiology: $520,000

•   Radiology: $526,000

•   Anesthesiology: $501,000

•   General Surgery: $434,000

•   Emergency Medicine: $388,000

•   Ob/Gyn: $372,000

•   Family Medicine: $281,000

•   Pediatrics: $265,000

However, these amounts are not earned until both medical school and residency are completed. Luckily, there are medical school loan repayment strategies that can be used in the meantime.

It’s important to be aware that the total cost of medical school over time can be impacted by the loan repayment option a borrower chooses. Repayment plans with a longer loan term can result in the borrower paying more overall.

In addition, how interest accrues on certain repayment methods can also be a factor. For example, on federal income-driven repayment plans, unpaid interest may accrue. This can happen if your monthly payments are less than the interest that accrues between payments. In that case, because your payments don’t cover all of the interest, the unpaid interest will add up.

Loan Forgiveness and Repayment Through Service

There are several medical school loan forgiveness programs for doctors with student debt. Some are government-sponsored (federal and state), and some are private programs.

Benefits vary, but generally, participants provide service for two to four years (depending on the number of years they receive support) in exchange for repayment of student loans and possibly a stipend for living expenses.

One of the most common programs is the federal Public Service Loan Forgiveness (PSLF) program, which was designed to encourage students to enter full-time public service jobs.

While PSLF isn’t specifically aimed at medical students, it could help those who choose to work for a government or not-for-profit organization.

Eligible borrowers may receive forgiveness of the remaining balance of their federal direct loans after making 120 qualifying payments while employed by certain public service employers.

Another program is the National Health Service Corps (NHSC) Students to Service Loan Repayment Program, which provides loan repayment assistance in return for at least three years of service at an NHSC-approved site in a designated Health Professional Shortage Area. Students who are in their last year of medical or dental school may be eligible.

Federal Repayment Programs

There are currently several student loan repayment plans for federal student loan borrowers. Some are based on graduated payments that start low and increase over time, and they are designed to ensure the loans will be repaid after a designated period. Others, such as income-based repayment, are based on a percentage of discretionary income and family size, and the repayment term is generally 20 to 25 years on these plans.

However, for federal loans taken out on or after July 1, 2026, there will only be two repayment plans available: a revised 10-year Standard Repayment Plan and a new income-driven option called the Repayment Assistance Plan (RAP). The graduated and extended repayment plans will remain open to current borrowers but be phased out.

Federal Loan Consolidation

A Direct Consolidation Loan allows borrowers to combine multiple federal student loans into one loan with a single monthly payment.

Consolidation also can give borrowers access to available federal loan repayment plans and forgiveness programs. But the interest rate on the new loan will be a weighted average of prior loan rates (rounded up to the nearest one-eighth of a percentage), not necessarily a new lower rate.

If the monthly payment is lower, that may be because the loan term is longer, which means the borrower is paying more interest over time. Also, federal loan consolidation is only for federal loans and does not include private student loans.

Private Student Loan Refinancing

Another option borrowers may want to consider is to refinance medical loans. With student loan refinancing, one or more student loans are combined into one new private loan from a private lender with one new payment — ideally, with a lower interest rate.

Advantages of a student loan refinance include possible lower monthly payments and more favorable loan terms. You may even be able to refinance student loans during medical school, depending on your situation. However, borrowers should be aware that they will lose access to federal benefits if they refinance federal loans, including income-driven repayment plans and loan forgiveness.

You may also opt to extend the term of the loan when you refinance. An extended loan term means you may pay more interest over the life of the loan. You can use a student loan refinancing calculator to plug in the numbers and see how much your payments might be.

Medical School Cost vs Law School and Other Graduate Programs

You may be wondering how the cost of a medical degree compares to the cost of other advanced degrees like the average cost of a law degree. For example, what’s the average cost of medical and law school? Here’s how they stack up: While the average cost of medical school is $228,959 in total, the average cost of law school is $217,480, according to the Education Data Initiative.

Other graduate degree programs are less expensive than both med school and law school. For example, the cost to earn an MBA at Harvard (a two-year program) is $161,304. And the average cost to earn a Master of Public Health degree (MPH) is $79,530.

One thing to keep in mind is that medical school degrees require more years of schooling than other graduate degrees, which can account for some of the cost. A medical degree typically requires four years of medical school (followed by years of residency), while a law degree typically requires three years of law school, and an MBA usually takes two years of full-time attendance to earn.

The Takeaway

Medical school is expensive, with the average cost being well over $200,000. Many students rely on student loans, grants, and scholarships to pay for their medical education.

When it comes time to pay off your loans, there are many options new graduates can consider. These include federal repayment plans, student loan forgiveness, federal loan consolidation, and student loan refinancing.

If you do choose to refinance your student loans, consider SoFi. It takes just minutes to check your rate and your credit will not be impacted when you prequalify.

FAQ

How much does medical school cost on average?

The average total cost of medical school is $228,959, according to the Education Data Initiative. The average yearly cost of medical school is $59,720.

Is medical school more expensive than other graduate programs?

Medical school, which has a total average cost of $228,959, is more expensive than many other graduate programs, including law school, which has a total average cost of $217,480. It’s also more than the total average cost of an MBA from Harvard, which is approximately $161,304.

What are the main factors that affect the cost of medical school?

Factors that affect the cost of medical school include the length of time a student must attend. Medical school is typically four years — and that’s after the four years students spend earning their bachelor’s degree. In addition, there are supplies and equipment med students need, such as stethoscopes and lab coats, numerous text books, and study materials.

As students advance in their medical education, they will often do rotations, which may involve travel and accommodation costs. There are also licensing exams students must take, which are generally hundreds of dollars each.

Can scholarships cover the full cost of medical school?

There are some scholarships that cover the full cost of medical school, but the eligibility requirements to qualify can be rigorous. However, smaller scholarships can add up to help cover a chunk of medical school costs, so students should consider searching for and applying for the applicable scholarships they can find. One resource: The Association of American Medical Colleges, which has a scholarship database organized by state.

How do most students pay for medical school?

Most students pay for medical school by taking out student loans. Seventy percent of medical students rely on student loans to help pay for the cost of medical school, according to the Education Data Initiative.

What is the total cost of medical school including living expenses?

According to the most recent research by the Association of American Medical Colleges, the median cost of medical school, including living expenses, for first-year med students at an in-state public school was $67,693. The cost was $91,929 for those attending private medical school.

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SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student loans are not a substitute for federal loans, grants, and work-study programs. We encourage you to evaluate all your federal student aid options before you consider any private loans, including ours. Read our FAQs.

Terms and conditions apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. SoFi Private Student loans are subject to program terms and restrictions, such as completion of a loan application and self-certification form, verification of application information, the student's at least half-time enrollment in a degree program at a SoFi-participating school, and, if applicable, a co-signer. In addition, borrowers must be U.S. citizens or other eligible status, be residing in the U.S., Puerto Rico, U.S. Virgin Islands, or American Samoa, and must meet SoFi’s underwriting requirements, including verification of sufficient income to support your ability to repay. Not all repayment options may be available for all loans. Minimum loan amount is $1,000. See SoFi.com/eligibility for more information. Lowest rates reserved for the most creditworthy borrowers. SoFi reserves the right to modify eligibility criteria at any time. This information is current as of 3/2/2026 and is subject to change. SoFi Private Student loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org).

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.