After graduating from medical school, prospective doctors start a multi-year residency program to gain supervised, hands-on clinical training in their chosen specialty. Some graduates then go on to complete a fellowship, which provides extra training in an even more specialized area of medicine.
Both programs involve postgraduate medical training, but they differ in several ways, including the length of the program and degree of specialization. If you’re an aspiring physician, understanding these differences can help you plan your career path and prepare financially.
With the median medical school debt reaching $215,000 among Class of 2025 borrowers, financial planning is especially important during these training years.
What is a Residency Program?
Medical residency is an intensive clinical training period that comes right after you graduate from medical school. You’ll often spend 60 to 80 hours per week gaining hands-on experience under the guidance and supervision of attending physicians.
Residency programs typically span three to seven years, depending on your specialty. They’re accredited by the Accreditation Council for Graduate Medical Education (ACGME) and may take place in hospitals, clinics, or other healthcare settings.
Some examples of residency specialties include internal medicine, pediatrics, emergency medicine, and surgery. Even though you’re in training during this time, you take on a lot of responsibility caring for patients, performing procedures, and documenting cases.
Completing your residency makes you eligible for board certification. You can become board-certified after passing the exam that’s specific to your medical specialty.
What is a Fellowship Program?
A fellowship is an optional program that some physicians pursue after residency. It gives you additional experience and expertise in a medical subspecialty, like vascular surgery or pediatric cardiology. It provides advanced training for doctors and can lead to senior roles within the medical field.
Fellowships can also open the door to academic research opportunities. These programs are more narrowly focused than residencies and often last one to three years, depending on your specialty.
Since fellows have already completed their residency training, they may have more independence and responsibility than they did as residents.
Medical Residency vs. Fellowship: Key Differences
Here’s a closer look at the differences between residencies and fellowships after medical school.
Stage and Scope of Training
You go into residency immediately after medical school. It’s the foundational training medical school graduates need before becoming full-fledged physicians. During residency, you’ll gain experience within your specialty and work under close supervision of attending physicians.
Fellowship is an optional program that some doctors pursue after their residency for even more specialized expertise. Since you may already be licensed to practice medicine, you may work more independently, perform more specialized procedures, and mentor residents.
Some medical fellows are also involved in medical research.
Salary
Medical residents and fellows receive similar salaries, though fellows sometimes make slightly more. Either way, your income will likely be a lot lower during this time than when you’re working as an attending physician.
Here are the average salaries of medical residents and fellows, according to the Association of American Medical Colleges (AAMC):
- $68,166 in the first year
- $73,301 by the third year
- $89,187 by the seventh year
Your earnings can also vary depending on where you live and work, as well as your specialty.
Managing Student Loans During Residency or Fellowship
Many medical school residents and fellows carry significant student loan debt while making modest training salaries. According to the AAMC, the average medical school debt among graduates who borrowed is $215,000. Residents and fellows rely on several strategies to manage their student loan debt during this time.
Income-driven Repayment Plans
If you’re carrying federal student loans, you can get them on an income-driven repayment (IDR) plan. IDR plans adjust your monthly student loan payments in accordance with your income, usually setting them at 10% to 20% while extending yourrepayment terms to 20 or 25 years.
While you’re earning a lower salary during your residency and training years, an IDR plan could significantly reduce your monthly payments.
Deferment and Forbearance
Another option is postponing payments completely through deferment or forbearance. Federal student loans are eligible for these programs, and some private loans provide this option, as well.
College Ave, for example, lets you fully defer payments on your medical school loans throughout residency and fellowship. Keep in mind that interest charges continue to accrue during deferment and forbearance, so pausing payments could increase your total repayment cost.
Public Service Loan Forgiveness (PSLF)
If you choose to work in public service, you could get your federal student loans forgiven through the Public Service Loan Forgiveness program. PSLF forgives your balance after 10 years of service in a qualifying nonprofit and 120 qualifying monthly payments.
This program could offer major financial relief if you’re planning to work long-term in the world of nonprofit healthcare.
Refinancing Student Loans
Refinancing your student loans is another strategy worth exploring. If you have strong credit, you could qualify for a better interest rate. Reducing your rate could give you significant savings, especially if you’re carrying a large debt balance.
You’ll also get the chance to combine multiple loans into a single monthly payment and choose new repayment terms. Be cautious about refinancing federal student loans with a private lender, though, as you’ll lose eligibility for income-driven repayment plans, PSLF, and other federal benefits.
Keep Up with Federal Student Loan Changes
There are major changes coming to federal student loans on July 1, 2026 that may impact how you manage your student loans. Here are a few changes to be aware of:
- New borrowers will no longer have access to Grad PLUS loans and will face different borrowing caps for Direct unsubsidized loans
- Existing borrowers can keep borrowing Grad PLUS loans and use the old borrowing caps for three more years or until the end of their program, whichever comes first
- There will be a new income-driven repayment plan option called the Repayment Assistance Plan (RAP)
- The PAYE and Income-Contingent Repayment plans will be eliminated by July 2028
If you’re already in medical school or planning on it in the future, make sure to stay informed about this overhaul to the federal student loan system and how it might affect you.
Budgeting During Medical Training
Living on a resident or fellow salary can be challenging, especially if you’re in a high-cost city or managing student loan debt. Here are some tips for managing your finances:
- Create and follow a budget so you know where your money is going. Budget-tracking apps can help you make and stick to a plan.
- Keep living like a student by keeping your spending low and limiting lifestyle inflation. Consider sharing housing or opting for public transportation to cut down your expenses.
- Come up with a plan for managing your student loans, whether that’s income-driven repayment or full deferment while you’re in residency or fellowship.
Residency vs. Fellowship: Bottom line
Residency programs offer hands-on training in your chosen specialty, while fellowships offer more advanced education in a subspecialty. Both programs help you progress from general practice to deeper expertise over the course of several years after medical school.
Since salaries for residents and fellows tend to be modest, managing living expenses and student loans can be challenging during this time. Adjusting your student loan payments or postponing them through deferment are common ways to ease the financial pressure during residency and fellowship programs.
