How to Pay Off Your Dental School Loans

By Christy Rakoczy, Student Loan Hero

Dental school is really expensive, with the average debt for dental grads topping $261,000. Of course, while the shocking size of the bill might be obvious, how to tackle repayment isn’t always as clear.

The good news is, however, that by getting organized and taking a proactive approach, it’s possible to get dental school loans paid off more quickly than you might think, while still accomplishing your other financial goals. To achieve this feat, just follow these five steps.

1. Figure out exactly what you owe.

First and foremost, you need to know exactly how much your student loan debt is. You may have both federal student loans and private student loans, and may owe money to multiple lenders. You need to have a clear idea of to whom you owe and what your loan balances are, so you can decide how to pay back your loans.

You can use the National Student Loan Data System (NSLDS) to find out about your federal loans and obtain a copy of your credit report to identify your private student loan lenders. List your loans, the names of your lenders, the interest rate on each loan and the total balance. This will help you later because you may decide to prioritize paying higher-interest private loans before sending extra money to lower-interest federal student loans.

2. Track your spending and make a budget.

Once you know how much you have to pay, you’ll want to figure out what funds you have to accomplish the task. This means budgeting. “The easiest way to tackle debt repayment is to stick to a budget that you’re comfortable with,” advised Keri Danielski, consumer finance expert and spokeswoman for Intuit’s money management tools, Mint and Turbo.

Of course, you’ll want to get an idea of your expenses in order to make a realistic budget. “To manage your money when dealing with school debt, you need to take an honest look at where you’re spending your money,” Danielski said. “It can be surprising to see where your money is going when you see all your finances laid out.”

If you track your spending for around 30 days, you’ll identify areas where you might want to make cuts. This helps you to develop a budget that’s reasonable and based on your lifestyle, leaving you with some spare cash to put toward loan repayment and other financial goals.

3. Decide how much goes to dental school debt vs. other priorities.

Once you have a budget, you can determine how much money to allocate toward your dental school debt and other priorities. “Include at least your minimum loan payment into your monthly budget,” advised Leslie Tayne, debt resolution attorney and managing director of Tayne Law Group P.C. “Even if you’re simply paying the minimum, meeting due dates prevents late fees from racking up and your credit score from plummeting.”

Once you’ve taken care of paying the minimums, Tayne said, you could earmark some extra cash for your dental school debt. However, she cautioned that you should pay off your highest-interest debt first — which might be credit cards or personal loans, rather than student loans.

Tayne also advised not putting so much cash toward paying dental school debt that you forget other key objectives, such as saving for retirement or buying a home. “Balancing your other financial goals is important, particularly after your higher-interest loans are mostly paid off,” Tayne said. “Setting aside at least 10 percent of your income toward retirement is advisable.”

4. Look into all your repayment options.

When you owe a lot of money for dental school, you need to investigate all of the repayment options that the federal government or your private student loan lender has available. Choosing the right repayment plan ensures you pay your dental school loans within an appropriate time frame, while also keeping your monthly payments comfortable.

You have a number of choices beyond the standard 10-year repayment plan, including various income-based plans that cap your payment at a percentage of your disposable monthly income.

“Most loans will automatically enroll you for a 10-year repayment plan, which can result in incredibly high payments,” Tayne said. “Consider changing to an income-driven plan to help pay only what you can reasonably afford.”

If you’re working in a public service position, you also may be eligible for Public Service Loan Forgiveness, which would allow you to have the remaining balance of your loans forgiven after 120 on-time payments. Some dentists who provide low-cost medical services in underserved areas might potentially qualify for loan forgiveness.

5. Consider consolidating or refinancing your dental school debt.

Another option that may make sense is to consolidate or refinance your dental school loans. Consolidation is done through the Department of Education and it involves taking out one big, new consolidation loan to repay other existing federal student loans. You won’t lower your interest rate because your new loan charges interest based on a weighted average of existing debt. But you can reduce the size of your payments, since your consolidation loan offers more repayment options, including longer payment terms of up to 30 years. You’ll also simplify your repayment if you have just one loan to pay instead of many.

Refinancing is another option, and in this case, you’ll get a new loan through a private lender to repay your existing federal or private debt. By comparison shopping among student loan refinance lenders, you may be able to lower the interest rate on your debt when you refinance. On the downside, you’ll give up some borrower protections that come with your federal loans, including loan forgiveness and income-based plans. Still, reducing your interest rate could be worth it, as this can reduce your monthly payment and result in your paying less interest over time.

If you owe a lot, you’re not alone.

While dentists often have particularly high loan balances, student loans are a major problem for people across many professions. In fact, Americans owe more on their student debt than on credit cards — a massive $1.48 trillion as of 2018.

It’s frustrating to cope with owing so much, but these tips can make the repayment process easier so you can move on with your life as a practicing dentist without lingering debt.

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