Managing Your Student Loan Debt

As part of our New Dentist Month, we’re exploring timely topics for dental school graduates who are just starting out on their own. This week’s post focuses on student loan debt and provides tips on managing it better.

It’s estimated that most dental school graduates have an average of $241,000 in student loan debt. Even though dentist salaries are high, that’s still an astronomical number and a daunting challenge as new dentists begin their careers.

 How can you keep your debt obligations in check without letting them take over your financial life or dictate your future career aspirations?

The key is understanding repayment options and correctly managing your money. It’s harder than it sounds – but we’ve got some tips to help you get started.

Compound Interest

Compound interest is great for investments and terrible for loans. Take this example from the ADA:

Repayment schedules for two student borrowers paid over 10 and 15 years

  Student A  Student B 
Amount Borrowed  $100,000 $100,000
Length of Loan
 10 15
Interest Rate  6% 6%
Monthly Payment  $1,110.00  $844.00
Total Amount Paid 
Over 15 years (180 months)







As you can see, the longer repayment term isn’t necessarily better. Compound interest continues to accumulate over the life of the loan, making the initial principal balance significantly higher in the long run. Know what you’re getting into when you’re structuring your repayment terms.

Repayment Options 

To start, consolidating your student loans may be a good option. If you have multiple loans, making one monthly payment alleviates the hassle of remembering several due dates, and you could save on interest in certain cases. Typically, you can consolidate your loans on your own from one service provider, like Great Lakes or Sallie Mae.

Refinancing can be a good option, too. When you refinance, you take out a new loan that will allow you to repay all your existing ones. Then, you make one monthly payment to your new, refinanced loan. The catch is that you lose potential benefits, like deferment options with federal loans.

Then, consider income-driven repayment plans. These plans range from monthly payments that are a percentage of your income to payments that change as you earn more over time.

You also may want to look into loan forgiveness options. There are federal and state programs that will forgive the remainder of your debt after a length of time, or will cover a portion of your debt. Click here for more information on these programs. This also covers loan forgiveness options through the military.

ADA members receive special discounts in addition to whatever your loan servicer provides. Check out this link for more information.


It may help you to keep things in perspective and make more informed choices if you know truth from fiction.

Myth 1: I don’t have to repay my student loans if I declare bankruptcy.

False. Even though bankruptcy should almost never be an option, you cannot discharge federal or private student loans in bankruptcy court.

Myth 2: I’ll take the longest repayment period allowable to better manage my payments.

False. Although tempting, try to avoid choosing the longest repayment period offered. We discussed compound interest above; you’ll end up paying thousands more over the life of your loan than if you create and stick to a budget early on.

However, if you decide to buy a practice, refinancing may be a good option. You’ll need to weigh the pros and cons.

Myth 3: I can’t have good credit if I have a lot of student loan debt.

False. Lenders will look at your overall debt to income ratio as much as they will consider how well – or poorly – you maintain good standing. Make your payments on time, every time.

Student loan lenders now allow you to select your payment due date, and there are options for lower interest rates when you sign up for automatic deductions or when you’ve made a series of consistent, on-time payments over a number of years.

Myth 4: It’s not a big deal if I miss one or two payments sometimes.

False. Even one late payment can trigger delinquency, which is when you’re not making timely payments. Delinquent accounts get flagged on your credit report, which negatively impacts yoru credit score – this in turn can limit your borrowing options down the road if you decide to buy a house or a dental practice. Always let your lender know if you’re unable to make payments. Usually, if you’re proactive, they can work with you.

You’re not alone! Most dental school graduates are intimidated by their debt. Take control of your finances now, and you’ll be surprised at how quickly you can begin to enjoy your salary if you stick to a smart financial system early on.

Stay tuned for more posts in New Dentists Month. Next up: What to Consider Before Becoming a Dental Associate. Contact us with any questions.