The complete physician's guide to student loans (2026)
The short version
- Your repayment choice can swing six figures over your career. It's worth getting right.
- If you'll work for a nonprofit or government employer, PSLF usually wins — and your residency may already be counting.
- If you're private-practice with a manageable balance, refinancing is often cheapest.
- The 2025 law (OBBBA) reshaped the income-driven plans — when you borrowed matters more than ever.
Medical training prepares you for everything except the six-figure financial decision waiting at the end of it. The median medical school graduate carries roughly $200,000 in loans, and what you do with that debt — which repayment plan, whether to pursue forgiveness, whether and when to refinance — compounds for a decade or more. This guide walks through the whole landscape, then points you to a free tool that runs the math on your exact numbers.
1. How physician student loans work
Most medical students borrow federal Direct Unsubsidized and (historically) Grad PLUS loans. These carry fixed rates set each year — for 2025–26, 7.94% for Direct Unsubsidized and 8.94% for Grad PLUS. Interest accrues throughout school and training; if it isn't paid, it capitalizes (gets added to your balance), which is why many physicians finish residency owing more than they borrowed. The full mechanics are in Medical school loans 101.
2. Your four real options
Once you're in repayment, almost every physician's decision comes down to four paths:
| Path | Best for | The catch |
|---|---|---|
| PSLF | Anyone at a nonprofit/government employer | Requires 120 payments + annual certification; must stay federal |
| RAP plan | Lower earners; large balances vs income | No payment cap — can get expensive for high attending incomes |
| Capped IBR (legacy) | High earners who borrowed before mid-2026 | Only available to existing borrowers; taxable forgiveness |
| Refinance (private) | Private-practice attendings, manageable balance | Permanently forfeits all federal benefits |
3. A simple decision framework
4. What the 2025 law (OBBBA) changed
The One Big Beautiful Bill Act reshaped income-driven repayment. It introduced the new RAP plan (payments of 1–10% of total income, interest waived, forgiveness at 30 years, but no payment cap), began sunsetting older plans like SAVE/PAYE/ICR, and eliminated Grad PLUS for new borrowers. The practical upshot for physicians: when you first borrowed determines which plans you can still access — and the capped legacy IBR that protects high earners is only available to people who borrowed before the cutoff. Full detail in what the 2025 law changed.
5. The forgiveness tax bomb (and why PSLF avoids it)
Income-driven plans forgive your balance after 20–30 years — but that forgiven amount is generally taxed as income in the year it happens, which can mean a large one-time bill. PSLF forgiveness, by contrast, is tax-free. If you're on a non-PSLF forgiveness track, you need to save for that future tax bill deliberately. See the student-loan tax bomb explained.
6. Should you refinance?
Refinancing trades all federal benefits for a (hopefully) lower private rate. It's the right move for roughly 20–30% of physicians — mostly private-practice attendings with manageable balances — and a costly mistake for the rest. Weigh both sides in refinancing pros and cons and the decision framework.
7. Special situations
- Two-physician couples: filing taxes jointly vs separately can dramatically change income-driven payments. See married filing separately & student loans.
- Residents: your training years may already be counting toward PSLF, and refinancing now usually locks in a worse rate. See PSLF for residents.
Stop reading, start knowing. Everything above is general. Your actual best path depends on your numbers — and AttendingFi runs all of them, free, in a few minutes: PSLF timing, the RAP plan, capped IBR, and refinancing at today's real rates, ranked by lifetime cost.
Educational only, not financial advice. Rates, figures, and program rules change; confirm current details at studentaid.gov.