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The average cost of medical school is $230,296 in total, according to the Education Data Initiative. The yearly cost currently sits at $57,574, and we’re seeing an increase of $1,030 each year.

If you are currently pursuing or already in medical school, the expense is not something to be taken lightly. Almost 70 percent of medical students rely on student loans to help pay for medical school, and the average medical student graduates with just over $250,000 in total student loan debt (this includes debt from their undergraduate degree).

The average physician salary ranges from $194,000 to $250,000, with some specialties making close to $800,000 per year. While these numbers are well above the national average mean wage of $61,900 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 of medical school being well above six figures, finding a way to pay for it is one of the biggest hurdles future medical students face. By being proactive about finding ways to pay for medical school, you may be able to reduce your overall student debt load and save thousands of dollars in interest.

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 find scholarships you qualify for and apply for them, the end result could save you thousands in medical school tuition expenses.

Military Service

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 Coast Guard, have different options.

The two options for medical students in the military are the Health Professions Scholarship Program and Uniformed Services University of 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 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 2023-2024 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 often is 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 loans are not available to students in graduate and professional school programs. However, medical students are eligible for other types of federal loans. They may receive a Direct Unsubsidized Loan, which is not based on financial need, or a Direct PLUS Loan, which, unlike other federal loans, will require a credit check.

Recommended: Comparing Subsidized vs. Unsubsidized Student Loans

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. Certain private student loan lenders, including SoFi, allow borrowing up to 100% of the cost of attendance.

To get a private loan with a competitive interest rate, a borrower generally needs to have a strong credit profile and a low debt-to-income ratio. If a borrower doesn’t meet these qualifications, they may want to consider using a cosigner to qualify for 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 keep down the inevitable debt. Students who start with a spending plan as undergraduates may have it easier; they can probably modify what they’ve already been doing to work in medical school. But, it’s never too late to start budgeting.

Recommended: How to Create a Budget in 6 Steps

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 there be roommates to split rent and utility bills? Other ideas to reduce expenses include meal planning and cooking at home, canceling subscription services, buying in bulk, and working out at home.

By living on a budget while in school, throughout residency, and for your first few years as an attending physician, you can take out less in loans, pay off your student loans quicker, and set yourself up for financial success down the line.

How to Pay Off Medical School Debt

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:

•  Plastic Surgery: $619,000

•  Cardiology: $507,000

•  Radiology: $483,000

•  Anesthesiology: $448,000

•  General Surgery: $412,000

•  Emergency Medicine: $352,000

•  Ob/Gyn: $337,000

•  Family Medicine: $255,000

•  Pediatrics: $251,000

However, these are not earned until both medical school and residency (typically four years) are completed. Luckily, there are medical school loan repayment strategies that can be used without waiting for a big payday.

Loan Forgiveness and Repayment Through Service

There are several student loan forgiveness programs for physicians 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 the program isn’t specifically aimed at medical students, it could help those who choose to forgo the promise of a big salary in exchange for the reward of working for a government or not-for-profit organization.

Eligible borrowers could 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 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.

Federal Loan Consolidation

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

Consolidation also can give borrowers access to additional loan repayment plans and forgiveness programs. But there is a downside: 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, it’s probably 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—the borrower can’t include private student loans. The borrower does, however, keep federal protections and benefits with a Direct Consolidation Loan.

Private Student Loan Refinancing

With student loan refinancing, one or more student loans are combined into one new loan with one new payment, with a new and possibly lower interest rate.

Advantages of a student loan refinance include a possible lower monthly payment, but borrowers should be sure they are prepared to give up federal benefits that are no longer accessible if you refinance, including access to income-driven repayment plans and loan forgiveness. Note: You may pay more interest over the life of the loan if you refinance with an extended term.

Refinancing generally works best for borrowers who have improved their financial situation after graduation with a good job and solid credit profile.

The Takeaway

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

When it comes time to pay off those loans, there are many options new graduates can consider. These include federal repayment plans, student loan forgiveness, federal loan consolidation, and student loan refinancing. Those who opt to refinance to a possibly lower rate, though, must be aware that they will lose access to federal protections and benefits.

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

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

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In a perfect world, all parents would have a 529 plan—or another education savings account—full of funds to cover their children’s college years. But there are many reasons why that may not be the case for you. If so, you’re likely looking into other options to pay for college.

One possibility you may be considering is dipping into your retirement funds. Depending on the type of retirement account you have, you might be able to take an early withdrawal or a loan from your retirement account, which you could use to fund your child’s education.

But using your retirement funds to pay for college isn’t always the best move. Before you decide to do it, you may want to consider both the benefits and the drawbacks, as well as some potentially less costly alternatives.

Before we jump in, it’s important that you’re aware that this article is a basic, high-level overview of some potential options when it comes to using retirement funds to pay for college. Further, because these topics (taxes and investments) are complicated, none of what’s written here should be taken as tax advice or investment guidance. Always talk to qualified tax and investment professionals with questions about your retirement accounts, and never rely on blog posts (like this one) to make important financial decisions.

A Few Pros of Using Retirement Funds to Pay for College

If you already have the money saved up, there can be some upsides to taking money out of your retirement funds so that your child won’t need to take out student loans.

You May Be Able to Avoid an Early Withdrawal Penalty

If you have an individual retirement account (IRA), taking an early withdrawal typically results in income taxes on the withdrawal amount plus a 10% penalty. However, if you withdraw funds for qualified higher education expenses, the 10% penalty is waived .

That said, the withdrawn funds will still be considered taxable as income. Also, this tax break does not apply to 401(k) accounts. But if you roll over your 401(k) into an IRA, then you would be able to withdraw the funds from the IRA and avoid the penalty.

You May Be Able to Avoid Taxes Altogether

If you have a Roth IRA, you can withdraw up to the amount you’ve contributed to the account over the years without any tax consequences at all.

You’re Paying Interest to Yourself With a 401(k) Loan

In addition to allowing you to take early withdrawals, some 401(k) plans also let you borrow from the amount you’ve already saved and earned over the years.

If you borrow from a 401(k) account, that money won’t be subject to taxes the way an early withdrawal would. Also, when you’re paying that loan back, the money you pay in interest goes back into your 401(k) account rather than to a lender.

A Few Drawbacks of Using Retirement Funds to Pay for College

Before you raid your retirement to pay for your child’s college tuition, here are some potentially negative aspects to consider.

There May Be Negative Tax Consequences

Even if you manage to avoid being charged a 10% early withdrawal penalty on your retirement account, some or all of the money you withdraw from a retirement account may be considered taxable income. Depending on how much it is, you could face a larger-than-usual tax bill when you file your tax return for the year.

401(k) Loan Repayment Can Be Affected by Your Job Status

If you take out a large loan from your 401(k), then leave your job, you may be required to pay the loan in full right then, regardless of your original repayment term. If you can’t repay it, it’ll likely be considered an early withdrawal and be subject to income tax and the 10% penalty.

You May Have to Work Longer

Taking money out of a retirement account lowers your balance. But it also means that the money you’ve withdrawn is no longer working for you.

Due to compounding interest, the longer you have money invested, the more time it has to grow. But even if you replace the money you’ve taken out over time, the total growth may not be as much as if you’d left the money where it was all along.

Alternatives to Using Retirement Funds to Pay for College

Can you use retirement funds to pay for college? If you have the funds, it’s generally an option. But before you go ahead, consider these alternatives.

Scholarships and Grants

One of the best ways to pay for a college education is with scholarships and grants, since you typically don’t have to pay them back.

Check first with the school that your child is planning to attend (or is already attending) to see what types of scholarships and grants are available.

Then make sure your child fills out the Free Application for Federal Student Aid (FAFSA®). The information provided in the FAFSA will help determine his or her federal aid package, which typically includes grants, federal student loans, and/or work-study.

Finally, you and your child can search millions of scholarships from private organizations on websites like Scholarships.com and Fast Web . While your child may not qualify for all of them, there may be enough relevant options to help reduce that tuition bill.

Federal Student Loans

As mentioned above, filling out the FAFSA will give your child an opportunity to qualify for federal student loans from the U.S. Department of Education.

These loans have low fixed interest rates, plus access to some special benefits, including loan forgiveness programs and income-driven repayment plans.

With most federal student loans, there’s no credit check requirement, so you don’t have to worry about needing to cosign a loan with your child.

Parent PLUS Loans

If you’re concerned about the effect of student loan debt on your child, you can opt to apply for a federal Parent PLUS loan to help cover the costs of college.

Keep in mind that the terms aren’t usually as favorable for Parent PLUS loans as they are for federal loans for undergraduate students. The interest rates are currently higher, and you may be denied if you have certain negative items on your credit history.

Private Student Loans

If your child can’t get federal student loans, is maxed out on loans, or has pursued all other options to no avail, private student loans may be worth considering to make up the difference.

To qualify for private student loans, however, you and/or your child may need to undergo a credit check. If your child is new to credit, you may need to cosign to help them get approved by being a cosigner—or you can apply on your own.

Private student loans don’t typically offer income-driven repayment plans or loan forgiveness programs, but if your credit and finances are strong, it may be possible to get a competitive interest rate.

Balance Your Child’s Needs and Your Own

Using retirement funds to pay for college is one way to help your child. But you probably don’t want to risk your future financial security. Take the time to help your child consider all of the options to get the money to pay for school.

If you do decide a private student loan is the right fit, SoFi is happy to help. In the spirit of complete transparency, we want you to know that we believe you should exhaust all of your federal grant and loan options before you consider SoFi as your private loan lender. That said, we do offer flexible payment options and terms, and don’t worry, there are no hidden fees.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility-criteria for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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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.

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If you’ve been thinking about going back to college to finish your degree, you may have wondered, how long are college credits good for? Are the credits I earned years ago still worth anything? Do college credits expire?

The answers to those questions depend on a few different factors. Here’s what you need to know about when college credits expire.

When Do College Credits Expire?

Some folks wonder: Do college credits expire after 10 years? Technically, college credits don’t expire. When students earn credits for taking college courses, those credits will always appear on the official transcript from the school they attended.

The question is whether another school or program will accept those credits if a student wants to transfer them. And that can be a gray area.

The good news is that older, “nontraditional learners” — undergraduate and graduate students in their mid-20s, 30s, 40s, and up — are not an unusual sight on college campuses these days. Schools that hope to attract students who are looking to complete a degree may be especially open-minded about transferring their credits.

In the fall of 2021, more than 6.4 million adults ages 25 and older were enrolled in college, accounting for approximately one-third of total enrollment, according to the National Center for Education Statistics. And the number of adults getting a bachelor’s degree or higher has been on the rise for at least a decade, the Census Bureau reports. So most college admissions offices should be prepared to answer questions about how long are college credits good for, the possibility of transferring old credits, or if some credits have a shelf life at their school.

Those policies can vary. A college doesn’t have to accept transfer credits unless it has a formal agreement with the transferring institution or there’s a state policy that requires it. A credit’s transferability also may depend on the type of course, the school it’s coming from, or how old the credit is. These deciding factors are sometimes referred to as the three R’s: relevance, reputation, and recency.

What Criteria Do Schools Consider?

How long do college credits last? Here are some things schools may look at when deciding whether to accept transfer credits:

Accreditation Is Key

Accreditation means that an independent agency assesses the quality of an institution or program on a regular basis. Accredited schools typically only take credits from other similarly accredited institutions.

General Education Credits Usually Transfer

Subjects like literature, languages, and history tend to qualify for transfer without a challenge. So if you completed those core classes while working toward your bachelor’s degree, you may not have to repeat them.

Other Classes May Have a ‘Use By’ Date

Because the information and methods taught in science, technology, engineering, and math courses can quickly evolve, credits for these classes may have a more limited shelf life — typically 10 years.

Graduate Credits May Have a Short Life Expectancy

If the coursework for your field of study in graduate school would now be considered out of date, it’s likely that some or all of your credits won’t transfer. Graduate program credits are generally denied after five to seven years.

There Could Be a Limit on Transfers

Many institutions set a maximum number of transfer credits they’ll accept toward a degree program. For example, the Rutgers School of Arts and Sciences won’t take more than 60 credits from two-year institutions for an undergraduate degree, and no more than 90 credits from four-year institutions. No more than 12 of the last 42 credits earned for a degree may be transfer credits.

At the University of Arizona, the maximum number of semester credits accepted from a two-year college is 64. There is no limit on the credits transferred from a four-year institution, but a transfer student must earn 30 semester credits at Arizona to earn an undergraduate degree. And credit won’t be given for grades lower than a C.

Some Transfer Credits May Count Only as Electives

If a student’s new school determines that an old class was not equivalent to the class it offers, it may require the student to repeat the coursework in order to fulfill requirements toward a major. But the new school still may consider the old class for general elective credits, which can at least reduce the overall course load required to obtain a degree.

If at First You Don’t Succeed, You Can Try Again

Many schools allow students to appeal a credit transfer decision — whether it’s an outright denial or a decision that a course will be allowed only as an elective. The time limit for an appeal may be a year, a few weeks, or just a few days, so it can pay to be prepared with the evidence necessary to make your case.

The relevant paperwork might include a class syllabus, samples of completed coursework, and a letter from the instructor that explains the coursework.

Students also may have to meet with someone at the school to talk about their qualifications, or they may be asked to take a placement exam to test their current level of knowledge in a subject.

How to Request Transcripts

Some schools allow students to view an unofficial record of their academic history online or in person through the registrar’s office. So if it’s been a while and you aren’t sure what classes you took or what your grades were, you might want to start there.

After a refresher on what and how you did at your old college, it might be time to check out how your target school or schools deal with transfer credits.

Many colleges post their transfer credit policies on their websites, so you can get an idea of what classes you may or may not have to repeat. Or you can use a website like Transferology.com, or try the “Will My Credits Transfer” feature at CollegeTransfer.net, to get more information about which credits schools across the country are likely to accept.

When you’re ready to get even more serious, you may want to see if your target school makes transfer counselors available, or if someone in the academic department you’re interested in will evaluate your record and advise you as to how many of the credits you’ve earned might be accepted toward your major.

You’ll probably need to have an official transcript sent directly to your target institution to document your grade-point average, credit hours, coursework, and any degree information or honors designations. There may be a small fee for this service, and it could take several days to process the request.

Once your target school has had time to review your transcripts, you can expect to receive a written notice or a phone call telling you how many of your credits will transfer. When you know where you stand, you can decide if you want to appeal any of the school’s transfer decisions, if you’re ready to move forward in the application process, or if you want to check out other schools.

It’s important to note that students who still owe money to their old school may find it difficult to have an official transcript sent to a target school.

While the Family Educational Rights and Privacy Act gives students the right to inspect their educational records, the law doesn’t require schools to provide a signed and sealed hard copy of a transcript to students who haven’t fulfilled their financial obligations.

State governments may have different laws when it comes to withholding these documents, and schools may have their own policies. So some students might hit a road bump at the registrar’s office if they’re behind on their loans or haven’t paid an old fee.

Recommended: Private Student Loans Guide

How Old Debt Can Affect Transferring Credits

Of course, one of the basics of student loans is repaying them. If you’re delinquent, the problems caused by unpaid student debt can go beyond trouble with transcripts.

If you’re planning to return to school and you’re behind on your student loans, you may have difficulty borrowing more money until you’ve put some money toward student loans and gotten them back on track.

The Federal Student Aid (FSA) Program offers flexible repayment plans, loan rehabilitation and consolidation opportunities, forgiveness programs, and more for borrowers hoping to get back in good standing. The Federal Student Aid office’s recommended first step (preferably before becoming delinquent or going into default) is to contact the loan servicer to discuss repayment options.

Another possible solution for those who have fallen behind on their payments can be refinancing student loans. Borrowers with federal or private student loans, or both, may be able to take out a new loan with a private lender and use it to pay off any existing student debt.

One of the advantages of refinancing student loans is that the new loan may come with a lower interest rate or lower payments than the older loans, especially if the borrower has a strong employment history and a good credit record. (Note: You may pay more interest over the life of the loan if you refinance with an extended term.)

Even if you’re doing just fine and staying up to date on your student loan payments if you’re thinking about going back to school and you’ll need more money, a new loan with just one monthly payment might help make things more manageable.

However, if you have federal loans and refinancing sounds appealing, it’s critical that you understand what you could lose by switching to a private lender — including federal benefits such as deferment, income-driven repayment plans, and public student loan forgiveness.

Recommended: How to Get Out of Student Loan Debt

Moving Forward (With a Little Help)

If you’re excited about the possibility of going back to school to finish your degree (or earn a new one), you might not have to let concerns about financing keep you from moving forward.

You can contact your current service provider with questions about payment options on your federal loans. And if you’re interested in refinancing with a private loan now, you can start by shopping for the best rates online, then drill down to what could work best for you.

With SoFi, for example, you can prequalify online for student loan refinancing in just two minutes, and decide which rate and loan length suits your needs.

There are no fees with SoFi student loans (that’s something you should always check), and SoFi members have access to career coaching, financial advice, and other benefits that could come in handy when starting a new chapter in life.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.