Finding the Light at the End of Student Debt

By the time you leave dental school, you may have racked up half a million dollars in student debt—a truly formidable amount. Don’t leave figuring out how to deal with it up to future you. Planning your repayment strategy now can bring you out from the shadow of debt sooner than you think. 

It’s the moment you’ve been waiting for: You’re going to graduate dental school, collect your degree, and find a job as a practicing dentist. After all that work, you’ll be done with dental school. 


But it won’t be done with you. 


As you know, a dental degree is one of the most expensive degrees there is. Most dentists graduate with about $305,000 in dental school debt, more than three times the average graduate degree. Planning how to manage repaying such a sum, on top of all the other demands of starting a career and a new chapter in life, can feel like one daunting task too many, and it’s tempting to let it slide and just concentrate on making the payments one by one. But making the effort now will benefit you down the road—especially when you want to retire—and there are several methods you can use to help the process. 


Once of the best ways to start managing that mound of debt is to make it smaller. Refinancing your nonfederal loans to get a lower interest rate can both decrease your monthly payments now and knock thousands off the cumulative total over the years. A company that specializes in student loans, like Laurel Road or Juno, can help walk you through the process and options. If you are an ADA member, Laurel Road offers an additional discount.  


When you can, paying more than the minimum toward the principal also helps reduce your total debt by shrinking the amount being charged in interest every month. Every little bit helps. 

Investigate Federal Repayment Programs

If you have federal student loans that would be negatively affected by refinancing, federal repayment plans based on your income may be another option. These plans base payment amounts on a percentage of your discretionary income (as determined by your annual income and state poverty guidelines) and adjust as your income changes. In these programs, you may be able to pay off your loan before the end of the repayment period, and any remaining balance at the end of the period is forgiven—but the taxes on it are not. 


If you are working for a qualifying government or nonprofit organization, you may also be eligible for the Public Service Loan Forgiveness Program, which forgives the outstanding balance on eligible loans after 120 payments. Your state may offer separate loan forgiveness or repayment programs as well. 


Now that you’re employed, with a known income, creating a budget is another basic but important step in planning your way out of student debt, as well as toward other goals, such as practice (or home) ownership. Identifying your spending habits can help show you where compromises in lifestyle and deferring purchases now can help you pay down debt or add to savings that will benefit you later. Setting definite goals and timelines to reach them can help bring your budget into focus. 


Remember that there are differences in debt: debt in the service of something that will increase your net worth over time (like your student loans) can help you grow financially in the long run, while debt incurred on everyday purchases (e.g., credit card debt, car loans) can be a drag on your finances and credit score. Limiting your total debt—one rule of thumb is no more than 30% of your total available credit, or, say, $3000 on a card with a $10,000 limit—can help keep your credit score healthy. 

Plan for Practice Ownership

Do you want to own your own practice someday? How to run a small business may not be what you learned in dental school, but the income from it can substantially help in paying off your student debt before you’re ready to retire. If practice ownership is a goal—or even if it might be—now is the time to start planning for it. And no, it’s not too soon to put retirement savings in your budget, either!  

Get Help

Juggling all your financial demands can be an overwhelming prospect. Getting expert guidance from a financial planner who is well versed in helping healthcare professionals can help you sort through your options, identify your professional and personal goals, and develop a roadmap to achieving them. Professional networks, such as the ADA, can also provide assistance in finding the tools and people you need to help you get started.  

Stick to Your Plan

Once you’ve created your plan, stick to it. It may mean putting off buying the nicer car or splurging on a vacation for a few years, but once you are free of student debt, there will be that much more money in your account every month for more rewarding purposes. And then you can truly kiss dental school goodbye.