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Why is my student loan interest rate so horrible

April 21, 2010

I just received my financial aid award for next year. All of my loans have a fixed interest APR of 6.8%. But when I look at mortgage interest rates they are all around 5%, with some dipping down below 4%. Two or three percentage points makes a HUGE difference when calculating out the costs for the amount of loans medical students must take out. For the amount of debt I expect to graduate with, two points ends up costing $58,000 with a 20 year repayment schedule.

Why is my medical student loan interest rate artificially fixed at 6.8% and not trending downwards as other interest rates have? Medical students are simply looking for some help with their debt. We don’t expect to go to school for free and we understand that our earnings potential will greatly help out with repaying our debt. At the same time, we do expect reasonable tuition rates and reasonable loan terms (not just for us, but all students). Piling on debt at exorbitant interest rates will only result in one thing–more medical students choosing high-paying specialties.  And everyone knows how that story plays out.

One Comment leave one →
  1. Brad permalink
    May 11, 2010 8:38 pm


    I’m starting M1 in the fall, and my rates are sitting at a fixed 7.8%. Kind of frustrating when my savings accounts are lucky to get 1 or 2%…

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