The average physician salary is $313,000, but that number alone doesn’t tell the whole story of doctors’ earning potential. There are more than 750,000 doctors working today, but a physician’s income can vary greatly depending on their specialty.
The highest-paid doctors can earn well above the average physician salary, while primary care physicians often earn below the average. Each medical specialty has different demands, complexity and pay structure.
Physician salary by specialty
According to the Medscape Physician Compensation Report for 2020, the top paid doctors by specialty are:
- Orthopedic surgeon: $511,000
- Plastic surgeon: $497,000
- Otolaryngology: $455,000
- Cardiologist: $438,000
- Radiologist: $427,000
You can see that the highest-paid doctors are also the highest-paid surgeons.
Other top-earning physician specialists on the list include:
- Dermatologist: $411,000
- Anesthesiologist: $397,000
- Emergency medicine physician: $357,000
- Pulmonalogist: $342,000
- OB/GYN: $308,000
- Psychiatrist: $268,000
- Internal medicine specialist: $257,000
- Infectious disease specialist: $246,000
- Pediatrician: $232,000
As you can see, there’s a large variance in physician salary by specialty. A pediatrician makes less than half what a plastic surgeon makes. In fact, the average primary care physician earned $243,000 while the average specialist earned $346,000, according to the same survey.
A doctor’s chosen specialty in medicine and all of the extra years of training can have a big impact on income, as well as on their loan repayment strategy to eliminate their medical school debt.
Average medical school debt
The average physician that Student Loan Planner’s experts have worked with has about $334,000 in medical school debt, but the amount of debt varies depending on where the physician went to school.
Medical school degree costs are typically lowest at public institutions and higher at private and for-profit institutions:
- In-state public med school (e.g. University of Michigan: $258,000)
- Out-of-state public med school (e.g. University of California, Davis: $282,000)
- Private med school (e.g. Loyola University of Chicago: $338,000)
- Private osteopathic medical schools (e.g. Western University of Health Services: $341,000)
- For-profit medical schools (e.g. St George’s University: $379,000)
Based on our research and work with doctors who graduated with medical school debt, there’s not much difference in salary based upon where they attended school. Doctors who went to different types of school can earn the same pay but end up with drastically different student debt burdens.
If you want to see more details about the cost of different medical schools, check out our blog post on The Cost of Every Type of Medical School.
Best (and worst) student loans for medical school
Medical students have several student loan options. These options can be broken down into two main categories of med school debt:
Federal student loans for medical school
Federal student loans are issued by the government and include Stafford Loans (subsidized or unsubsidized) and Grad PLUS Loans.
Med school grads have flexible repayment options. They can pay them back based on how much they owe — such as on Standard, Graduated or Extended Repayment plans — or based on their income with an income-driven repayment plan.
These loans are also eligible for taxable loan forgiveness with income-driven repayment, as well as tax-free loan forgiveness with Public Service Loan Forgiveness (PSLF). PSLF can make loan repayment a lot less expensive.
The main problem with federal loans, especially Grad PLUS, however, is that the interest rates can be high. But these loans are typically better for aspiring doctors, especially because they’ll need payment flexibility during residency and to keep the option open for PSLF.
Private student loans for medical school
Private med school loans are issued through a bank, not the federal government. These loans aren’t eligible for income-driven repayment or loan forgiveness (taxable or PSLF).
The upside is that the interest rate could be lower on private loans for those who know they’ll be paying back their loans in full.
Private loans should mainly be avoided by physicians-to-be because it would be tough to make payments on a resident salary and during fellowship. Plus, there are no forgiveness options for private loans. They must be paid back in full.
Student loan repayment for med school debt
Student Loan Planner’s team has done over 4,400 student loan consultations advising on more than $1,100,000,000 in student loans. In our experience, there are three definitive ways to pay back medical school debt based on career, income and the amount of debt:
1. Aggressive med school loan repayment
For doctors who owe about the same amount they make annually once becoming an attending physician (e.g., $300,000 or less in student debt making $250,000 per year) and aren’t planning to work for a PSLF-qualifying employer, their best bet is to refinance to a lower interest rate and pay back these loans in 10 years or less.
While in residency and possible fellowship, it’s best to hold off on refinancing. Keep the federal student loans on income-driven repayment perhaps using Revised Pay As You Earn (REPAYE) for the interest subsidy. Then refinance after becoming an attending physician when their debt-to-income ratio is low enough to refinance.
2. Income-driven repayment with taxable loan forgiveness
Pursuing income-driven repayment with taxable loan forgiveness is a strategy for doctors who owe more than twice their income (e.g., $500,000 in med school debt while earning $250,000 per year or less).
This strategy includes selecting an income-driven repayment plan that will keep loan payments to a minimum. These plans could include Pay As You Earn (PAYE), REPAYE or Income-Based Repayment (IBR).
After making payments based on their income for 20 to 25 years, whatever loans are remaining would be forgiven. The physician would then owe taxes on the forgiven balance.
The best way to optimize this plan is to take advantage of the lower student loan payments by saving aggressively on the side and maxing out pre-tax retirement accounts. This approach will help both reduce their student loan payments and save up over time for the tax on the forgiven balance.
PSLF should definitely be considered as a great option for physicians. If a physician is considering this strategy, they need to first make sure to have Direct federal student loans, then choose an income-driven repayment plan and work full time for a PSLF-qualifying employer. Once they reach 120 months of qualifying payments, the balance is forgiven tax-free through PSLF.
Because most residency programs include at least three years working for a qualifying hospital, doctors can get a three-year head start while having low payments based on their residency income.
For those that need a four-year residency or fellowship afterward, PSLF could be an extremely inexpensive way to pay back med school debt. It might even end up costing less than the amount of the loans taken out.
Here’s a link to our top PSLF tips for more information.
How to pay back med school student loans
Physicians can save a bunch of money paying back their debt if they pick the right strategy, especially if they can get started right after graduating from med school.
Many doctors we’ve worked with weren’t aware of the flexible repayment options during residency so they ended up going into forbearance and not getting any PSLF credit or they got an interest subsidy on REPAYE while planning to go into private practice.
It’s never too early and it’s never too late to make sure you’re on the right repayment strategy. The good news is that there’s a plan that will work for your specific situation.
If you have six figures’ worth of med school debt and want to be on an optimal course, we can help you design a custom plan that will fit around your chosen career path and medical specialty.
Don’t let your med school loans get in the way of pursuing the path you set out for during med school. Learn more about getting a custom student loan plan for your med school debt here.
If you have any questions about taking out loans for med school or the best way to pay them back, feel free to reach out to me directly at [email protected].