New Dentists Can Tap Key Strategies to Reduce Their Debt

Leslie Kasperowicz


Most dentists didn’t choose their profession solely based on its income potential, but it was likely on the list. The expectation of a job with a six-figure average starting salary can make it easy to think that once you start your career, your financial woes will be behind you.

Unfortunately, dentists have a lot of financial concerns to deal with, not the least of which is student loans.

The American Dental Education Association (ADEA) reports an average debt of $292,169 for dental school graduates. Dentists have a higher debt-to-income ratio than other medical professions like optometrists, pharmacists, and even physicians.

For young dentists who are in a stage of life where buying a home and maybe even starting a family are also big financial concerns, it can suddenly feel like you’re starting out from a difficult position. The key to avoiding the black hole of debt is to get your financial plans together right from the start.

Join the ADA

Your first step as a dentist should be to join the ADA to take advantage of the many discounts and services that members receive. Membership includes several different benefits.

For example, ADA programs can help you to refinance student loans at a lower interest rate through the Laurel Road program to pay them off faster. You can also get special rates on everything from credit cards to group life insurance.

The ADA even provides a 401(k) program and other investment assistance that can get you started on retirement savings. You might not be thinking about that right out of school, but the sooner you start, the more peace of mind you will have for the future.

New dentists often go to work in an established practice rather than starting their own practice. It’s a good financial move, particularly when you’re still in the thick of student loans. But if you do want your own practice, planning for that day from the start is vital. It means keeping your expenses low while you pay down student debt and prepare for the costs of opening a practice.

Planning ahead in this way may mean putting off the purchase of a new home or a car until you’re more financially stable. But the good news is that the ADA can also provide assistance with practice finance loans. Yes, it’s another loan. But since dental practice owners make more money on average than an associate dentist, it can be a smart financial move in the long run.

Insurance, Repayment, and More

That said, you have to budget, prepare, and know what the realistic income expectations are for the area where you plan to practice as well as what the cost of running your practice will be. Factor in costs like leasing space, equipment, paying employees, and the right business insurance for a dental practice.

Business insurance may seem like a big expense, but it’s both necessary and a smart financial move. The average dental malpractice claim payout is $68,000. A judgment against you is the last thing you need added to the financial pile.

And even when you plan ahead and make careful financial decisions, the truth is that dentists may wind up dealing with more debt than they can realistically handle. There are programs available for dentists to help with that debt, including government programs for student loan forgiveness.

Many of those programs require you to make specific commitments, such as the Public Service Loan Forgiveness program, which is available if you work for a qualifying nonprofit or for the government.

Additionally, the National Health Services Corps Loan Repayment Program is available to dentists who commit to working in an underserved area for two years.

There is also a program that will adjust your student loan payments to match what you’re earning, known as Revised Pay As You Earn (REPAYE). It’s a good choice for a dentist starting out with a lower-income residency job.

Most of these programs are for student loan debt only, and not everyone can work in the areas required. If you have other debt to deal with or don’t qualify for forgiveness, there are other options.

Stay Focused to Pay Down Debt

Don’t be fooled by debt relief myths. There are helpful resources that can get you back on track if financial troubles threaten to overwhelm you. The sooner you deal with debt, the better.

One of the most common financial misconceptions is that you should approach large debt by spreading it out over as much time as possible to lower the payments. Unfortunately, especially with a large amount owed, that means you’re paying a lot of interest and wind up paying far more than the original sum.

It’s important to set up payments you can afford but also to pay off those loans as quickly as reasonably possible to reduce the total amount of interest. Throw extra money at the principal of the loan whenever you can, even if it means putting off vacations or other purchases.

Be Realistic about Finances

Most dentists go into school knowing that they will have a long road of paying off debt ahead of them. Even with very aggressive payoff plans, dentists can expect to be paying student loan debt for at least 10 years, and realistically the timeframe is often twice that long.

That means you have to do two main things. First, decide what your plan of attack will be for paying the debt down. Second, plan for how you will do that. Then, of course, you have to stick to the plan.

Eventually, every dentist can be debt-free. But smart decisions at every step and proper use of the resources available will get you there faster.

Ms. Kasperowicz is an insurance and finance expert who is the managing editor of She is a former Farmers Insurance and Financial Services CSR and has been helping people understand insurance and finances through education for more than 10 years.

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