Written By Molly Laughter, MBA, CSLP®, CFA®, CFP®
Updated on January 11, 2024
When you walk into a hospital and see a professional walking briskly in a white coat, you might think “there goes a rich doctor.” Think again.
Sure, it’s common – perhaps universal – to have a six-figure income as a physician. Their average physician annual salary in the United States ranges from $200,000 to $300,000 depending on your source. However, the income gap between a primary care physician in Chicago and an orthopedic surgeon in Anchorage is far and wide.
There are many fields of medicine and doctors aren’t the only folks in the hospitals. The cost of education to practice medicine varies widely based on the school and specialty. More education does not always correspond to more income.
12 Best-paying medical jobs by specialty
According to the Bureau of Labor Statistics (BLS), here are the mean salaries for the most well-known and highest-paying jobs in the medical field (dental fields are excluded from this list, but here’s an in-depth overview of the average salary for dentists).
- Anesthesiologists: $271,440
- Surgeons: $251,650
- OBGYNs: $239,120
- Psychiatrists: $217,100
- Family medicine physicians: $214,370
- General internal medicine physicians: $210,960
- Nurse anesthetists: $189,190
- Pediatricians: $184,570
- Optometrists: $125,440
- Physician assistants: $116,080
- Nurse practitioners: $114,510
- Registered nurses: $80,010
As you can see, there is a large variance in average income by healthcare practitioner and by practice area, and the majority of medical services professionals unfortunately make salaries on the lower end of the spectrum. There are nearly three million registered nurses with an average salary of $80,010 and three million health technologists or technicians with an average salary of $48,990.
Medical salary at a hospital vs. private practice
The numbers listed above are mean salaries and obviously don’t reflect all sources of income for medical professionals, but it’s a starting point. Medical salaries, bonuses, and side hustle income for doctors also vary depending on whether the practitioner is working for a large hospital, part of a physician-owned group contracted with a hospital or smaller practice in a rural setting, teaching hospital, etc.
Despite the Bureau of Labor Statistics’ mean salary of $271,440, Salary.com lists a median pay of $400,700 for an anesthesiologist. That’s the important difference between mean and median. Mean is a true average, where median is the middle number of the group.
Case study example
According to the American Society of Anesthesiologists, 57% of anesthesiologists work with a private physician group, and anesthesiologists who work in academic medicine make 10% to 25% less than their private practice counterparts. Where a medical professional works has a lot to do with their salary range.
Compensation has changed over time in medicine, too. Physician compensation has decreased tremendously with the changing landscape of health insurance, with reimbursements dropping annually for years. The “business” of medicine has made collections difficult across specialties, which impacts medical professionals across the board.
But there’s something else to consider, too.
Average student loan debt by medical profession
The amount of student debt taken on is a much larger piece of the puzzle today than it used to be. The Student Loan Planner® team has worked individually with more than 900 physicians. These clients had an average of $335,000 in student debt. Here are some other average debt loads from our experience.
- Average physician: $335,000
- Physician assistants: $196,785
- Nurse practitioners: $181,115
- Registered nurses: $138,937
Put yourself in the shoes of a medical school student or a physician assistant (PA) student who is taking on the same high amount of debt as everyone else in the same class and trying to decide which specialty to follow. Looking at the debt balances above, try telling yourself there isn’t an incentive to follow the path of the highest-paying medical job or specialty later on.
The most expensive US programs for healthcare practitioners
We’ve written in the past about the cost of medical school, with an average of over $40,000 per year. Costs peak at about $90,000 per year for non-residents at schools like University of Illinois and University of Utah. Medical school itself is four years, followed by some combination of residency, internships, or fellowships depending on the specialty.
We’ve also written about the cost of PA school and have found an average cost of attendance between $65,000 and $75,000. At some California schools, like University of Southern California, costs can exceed $175,000.
According to NurseJournal.org, a registered nurse program takes two to four years to complete. The cost of nursing school is based on the undergraduate institution you choose.
A nurse practitioner requires at least a master's degree, and the process takes about 6 years, largely dependent on the path you choose. The average student loan burden for nurse practitioners we’ve met exceeds $180,000, and Columbia University seems to top the charts with an estimated cost up to $264,000.
Best and worst student loans for medical professionals
When you decide to pursue your dream career in a medical field, you’ll be confronted with many financial aid options. The two largest categories are private loans and federal loans.
Private loans for healthcare education
Private loans for medical education are provided through private banking institutions. Even though their names may be familiar, like Sallie Mae, it’s important to realize that these institutions are not backed by the federal government.
As such, we frequently see much higher interest rates on private loans. Most borrowers don’t pay much attention to their loan details while in school, but become overwhelmed after they graduate. You should know that an interest rate of 8% to 10% on private student loans is too high.
The only thing you can do with private loans is refinance them in search of a lower interest rate. We work with trusted refinancing lenders to provide better terms and cash back bonuses.
Federal loans for healthcare education
When it comes to graduate school for those in the medical profession, the federal government issues both Federal Direct or Stafford (subsidized and unsubsidized) Loans and Direct Graduate PLUS Loans.
The first step is to complete the Free Application for Student Aid (FAFSA) at StudentAid.gov. You’ll receive a response with all available aid based on your financial situation.
Are federal or private loans better?
Federal loans provide significantly more flexibility when it comes to repayment. Here are a few reason why it’s important to think about the federal program before signing up for private loans:
- Federal loans are much more flexible with forbearance.
- Federal loans have multiple repayment options including income-driven repayment.
- Federal loans allow borrowers to switch between repayment plans as their needs change.
- Federal loans have forgiveness provisions including Public Service Loan Forgiveness and long-term forgiveness.
- Federal loans are forgiven if you die, they do not carry over to your heirs.
Student loan repayment for medical debt
If you make decisions based solely on minimizing debt, you might be thinking “well obviously I shouldn’t go to X” or “Y is obviously the best choice!”
Unfortunately, it doesn’t exactly work that way. Whether it’s a good practice or not, prestige still plays a role in the hiring process. Patients want to feel that they’re being taken care of by the best. Employers look for the highest levels of competence and experience in care when seeking to fill a role.
So how do you tackle this conundrum?
If you ran the math to pay everything back to zero, you might be tempted to run a cost-benefit analysis to find the highest-rated program that is the least costly.
But what if you could have it all? What if you could go to the most expensive school without the goal of paying off your student loans? It feels wrong or backward, but the federal student loan system allows for that.
A case: PSLF for medical professionals
- A surgeon goes to Harvard Medical School and graduates with $350,000 in federal student debt.
- She does five years in residency working for a nonprofit hospital earning about $50,000 per year.
- Then she does a two-year fellowship to narrow down her specialty. She makes roughly $60,000 per year.
- During this time she makes 84 months’ of payments on an income-driven plan working for two different hospitals, paying somewhere between $200 to $250 per month under an IDR plan, like Revised Pay as You Earn or REPAYE.
- She leaves residency and elects to work for a few years directly for a nonprofit hospital making a starting salary of $250,000. At this point, her payments jump to $1,800 or more per month. Remember, this only lasts until her payment count reaches 120 (she’s already at 84 payments).
- In total, she pays about $86,000 and a balance of close to $475,000 gets forgiven tax-free through the Public Service Loan Forgiveness program.
While PSLF might be attractive to those with great nonprofit hospital systems nearby, it’s not the right fit for everyone. The federal system also allows for longer-term forgiveness options.
Long-term student loan forgiveness via income-driven repayment
For medical professionals like nurse practitioners and physician assistants, the debt burden can overwhelm the income potential. If your debt level is at least 1 or 1.5 times your income when you get out of school, you should consider long term forgiveness.
Depending on when you first borrowed student loans, you might be eligible for Pay as You Earn Repayment (PAYE) or Income-Based Repayment (IBR). Most borrowers are eligible for REPAYE as long as the loans are Direct Loans as opposed to FFELs.
Under these plans, you’ll make income-driven payments over 20 or 25 years and have a balance forgiven after that time.
The balance will likely be taxable to you as income in the year of forgiveness, so you’ll want to save for the inevitable “tax bomb.” We recommend saving monthly in a taxable brokerage account for this tax liability.
Private student loan refinancing
If you borrowed private loans for medical school or another form of graduate school, the only thing you can do is keep an eye on rates, and refinance to a lower interest rate and/or payment depending on your goals.
You can consider the refinancing ladder strategy, which involves refinancing your loans multiple times as you pay them down over time.
If you are in a private practice where income potential is very high, you might consider refinancing your loans out of the federal system to save money on interest over the long term.
Are all doctors rich?
It’s a much more complicated question than it used to be. We talk about this in our consultations, but your habits have a lot to do with your wealth over time.
If you are a doctor who borrowed the maximum amount during school and have chosen a lucrative field, then you’ll need to decide between forgiveness and refinancing.
A nurse who has a six-figure debt, but has a starting salary of $75,000, might consider long-term forgiveness or PSLF, depending on where they work.
If your debt is approximately equal to your income level post-school, you probably want to refinance, but it’s worth exploring all of your options. That’s what we’re here for! Meet with your very own consultant and weigh the options live by scheduling a consult to discuss your student loan situation with us.
