Managing Medical School Debt While Building Wealth: Financial Planning for Young Medical Professionals
November 2025
by Alex Freedman, Senior Wealth Advisor
Embarking on a career in medicine is a noble pursuit, but it often comes with a significant financial burden. In 2025, medical graduates are stepping into rewarding careers, yet many carry six-figure student debt that can feel overwhelming. The good news: with the right financial planning strategies, it’s possible not only to manage medical school loans but also to build long-term wealth and financial security.
The Rising Cost of Medical School in 2025
The cost of medical education continues to rise, making debt management a critical issue for young doctors. According to the Association of American Medical Colleges (AAMC), the median four-year cost for the class of 2025 is:
- $286,454 for public medical schools
- $390,848 for private medical schools
The median education debt for indebted graduates in 2024 was $205,000. These numbers highlight why early and intentional financial planning is essential for physicians beginning their careers.
Understanding the True Cost of Becoming a Doctor
Medical school expenses go beyond tuition. Students face fees, health insurance, textbooks, medical equipment, and living expenses that compound the debt load. Once in residency, salaries may be modest compared to future earning potential, which makes disciplined financial choices during this stage vital.
Financial Planning Strategies for Physicians with Student Loans
1. Create a Comprehensive Budget
A detailed budget helps you understand where your money is going. Tracking income, residency pay, and expenses ensures you can balance student loan payments with short-term needs like housing and insurance. Tools and apps can simplify the process and highlight opportunities to reduce costs.
2. Tackle High-Interest Debt First
Private loans and credit cards often carry higher interest rates than federal student loans. Paying down high-interest debt first lowers your total repayment costs and frees up future cash flow for saving and investing.
3. Explore Loan Forgiveness and Repayment Programs
Federal programs such as Public Service Loan Forgiveness (PSLF) or income-driven repayment (IDR) plans can provide significant relief for doctors working in qualifying roles. Understanding eligibility, enrollment requirements, and timelines can prevent costly mistakes.
4. Start Investing Early—Even with Debt
One of the most common questions young doctors ask is: Should I pay off my loans first, or invest? The answer is often both. By contributing to retirement accounts like a 401(k), 403(b), or IRA, you can benefit from compound growth, tax advantages, and employer matching (if available). Even modest contributions in your 20s and 30s can grow substantially over time.
Pro tip: Residency may not feel like the right time to save, but it’s actually one of the best opportunities to contribute to a Roth IRA. With residency salaries generally below the modified adjusted gross income limits ($150,000 for single filers and $236,000 for joint filers in 2025), resident physicians can often make the full contribution. Once you begin earning an attending’s salary, your income will likely exceed those limits, making it more difficult to take advantage of this tax-advantaged account.
5. Work with a Financial Advisor Who Understands Physicians
A financial advisor specializing in medical professionals can help balance loan repayment with wealth-building strategies. From structuring repayment plans to building investment portfolios and planning for insurance needs, personalized advice ensures you stay on track with both near-term obligations and long-term goals.
Wealth-Building Strategies Beyond Debt Repayment
Managing student debt is only part of the financial equation. To achieve financial independence, physicians should also focus on saving and investing strategically:
High-Yield Savings Accounts: Keep emergency funds in accounts that provide higher returns than traditional savings.
Diversified Investment Portfolios: Spreading investments across stocks, bonds, and alternatives helps manage risk while pursuing growth.
Tax-Advantaged Accounts: Maximize contributions to retirement plans, HSAs, and other tax-efficient vehicles.
Insurance Planning: Disability and life insurance protect your income and ensure financial security for your family.
Building Wealth While Paying Off Medical School Debt
The path to financial stability isn’t about choosing between loan repayment and investing—it’s about creating a balanced plan. By prioritizing debt strategically, saving consistently, and leveraging the expertise of financial advisors, young medical professionals can build wealth while paying down debt.
With the right approach, you can manage loans, save for retirement, and begin building generational wealth while advancing your medical career.
Managing medical school debt doesn’t have to stand in the way of your financial future—connect with us today to create a strategy that works for you.