HPSP from a financial standpoint

[Stripegum101]

Hey guys,

I lurked around the forum from time to time and have read up on HPSP quite a bit. But I have yet to see what people think about HPSP if you are planning to attend a 3 year private dental school.

For this thread, I hope we can put all the other issues aside and like the title says, just look at it from a strictly financial perspective (since the other pros and cons of HPSP are covered very well in other posts).

The things I am certain of:
1. Only three years payback
2. All tuition, equipment, books are paid
3. ~ $2000 monthly stipend plus 20K bonus
4. Average cost of attending a private dental school is around 300K - 350K

The things I am somewhat certain of:
5. According to the post on why I shouldn't get into HPSP, the pay received during the 3 years in active duty is ~$60K a year
6. Average income from a recent graduate can range from 60k-225k a year with most between 100K - 125k

If I get loans, I end up with 300K debt (probably ~400k with interest)
If I go HPSP route, I give up 3 years of private practice but end up with ~200K in my bank account.

So I guess it comes down to lose* 3 years or lose ~600K

Seems like a great deal if you're just looking at the numbers. What do you guys think?

Oh and I heard that the 2k stipend and 20k bonus get taxed. How much is left afterwards? (I'm just a student with no income what so ever)

*(I am not trying to be rude. I understand that to those who want a military career, you're in no way "losing" 3 years. But for the sake of simplicity, please bear with me)

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[kalvydas]

Let's start with your certain things:
1) 3 years HPSP – will incur only 3 years pay back (unless you do 1 year AEGD what is neutral year, thus you will end up spending 4 years on active duty)
2) Tuition, equipment, books paid – that's nice. Under reimbursement you can get (at least in US Navy: Sonic scaler - $552, Loupes - $1000, Caulk/Densply Prolite - $1450, Cavijet - $1450, Digital Diagnostic Camera - $1500, plus lots of cheaper instruments/supply)
3) 1900 monthly stipend plus 20K bonus – both are taxable. If you sign HPSP contract in September, your income for that year will be (1,900*4 + 20,000 = $27,600). If you single and have no other income or adjustments, you will end up paying $1,924 in taxes. PLUS one additional catch – bonus will require 4 years payback contract, thus you will end-up having 4 years obligation for 3 years of school + $20,000 "we got you for longer" loan
4) School cost of 300 – 350k - NYU is one of the most expensive universities, and three year program will cost you about 200k (62,000 yearly tuition + fees). HPSP covers only tuition and fees, not living expenses, bills. So you will have to survive on $1,900 stipend, or get additional loans for living expenses. If you ready to live moderate, $1,900 stipend might be enough, if you have family or want to live like a "doctor"- $1,900 is nothing near to enough.

Now about not so sure things:
5) Pay – for 3 years your pay will be (single, no dependents, no prior military service, living let's say in Norfolk, VA area (one of the biggest Navy bases):
Taxable income:
Base pay: $3,540.30*12 = 42,483.60
Variable Special Pay: $250.00*12 = 3,000
Additional Special Pay = 10,000
Total taxable income: $55,483
After taxes: 55,483 – 7,319 = $ 48164
Non-taxable income:
BAS: $223.04*12 = 2,676.28
BAH (Norfolk, VA): $1534.00*12 = 18,408
Total non-taxable income $21,084
Total income after taxes = $69,248

6) Average new grad pay is 100 – 125K. Now the "happiest" part – with HPSP you will have no loans for tuition/fees, thus if you go civilian life, and want to repay 200k in loan within 3 years, you will need to have additional 65,000 income. So your civilian income in order to match military HPSP will have to be at least 134K. So fresh grad civilian pay (100-125K and more) is somewhere near to military HPSP benefits (and you don't need to deploy, take IA task, stand duty; also the more you work in civilian life, the more you earn – in military pay stays the same no matter how good/bad are you, how many hours you work – and expect to work at least 40hrs a week)


Now to your dilemma:

"If I get loans, I end up with 300K debt (probably ~400k with interest)" – most likely 300K debt, and if you want to repay within 3 years (living within same level as military officer) you will need to make 150K a year.

"If I go HPSP route, I give up 3 years of private practice but end up with ~200K in my bank account" – you won't have 200K in bank. I don't see huge chunk of money being saved having $69K a year income. You most likely end-up with maybe 30-50K in savings (if you live moderate life), but nothing near 200K.

There is no choosing between lost 3 years and 600K. It will be more closely to 3 years and 50K. And if you take 20K bonus – you will end up choosing between 4 years and 50K

Another thing having three years as associate instead of military experience: private practice can really help you to create patients base, get experience for own future practice, and even allow opening own practice with having patients starting with the first day of practice.


Disclaimer: I am going for 3 years HPSP, but I have 4 years as enlisted so after graduation, I will be O-3E: that gives me base pay's monthly advantage of $1,183 (yearly $14,000 more), have dependents - another $370 advance in BAH (yearly $4,400 more), plus foreign language pay (know Lithuanian language), that gives $3,000 a year more. So looking from financial side I will be getting about $85,000 in income plus no loans.
Also I am eligible for GI bill that gives me $2,700 monthly income (based on NYU zip code) while attending dental school.

 

[teeth63a]

The things I am certain of:
1. Only three years payback
2. All tuition, equipment, books are paid
3. ~ $2000 monthly stipend plus 20K bonus
4. Average cost of attending a private dental school is around 300K - 350K

The things I am somewhat certain of:
5. According to the post on why I shouldn't get into HPSP, the pay received during the 3 years in active duty is ~$60K a year
6. Average income from a recent graduate can range from 60k-225k a year with most between 100K - 125k

If I get loans, I end up with 300K debt (probably ~400k with interest)
If I go HPSP route, I give up 3 years of private practice but end up with ~200K in my bank account.

So I guess it comes down to lose* 3 years or lose ~600K

Seems like a great deal if you're just looking at the numbers. What do you guys think?

Oh and I heard that the 2k stipend and 20k bonus get taxed. How much is left afterwards? (I'm just a student with no income what so ever)

Hmmm....there's only one three year school that comes to mind...

You are correct on items #1-4. I believe the Army paid for my loupes as well.

#5 You could possibly be earning $60,000 if you're at Ft Polk, but it could be as much as $80,000 if you're in Hawaii, Germany, Korea or Alaska, as you will be reciving the Cost of Living Allowance (COLA) if you're OCONUS (Outside the Continental United States). I haven't run the numbers, but it can be a big range.

#6 Is fairly accurate. But a recent grad making $225,000 right out of school...? Possibly if he works for his parent's non-insurance participating/ high-end/LVI/cosmetic office. The $100-125k figure is definitely realistic.

So...I had a 2 year HPSP scholarship at a school that would have initially cost $212,000 (circa 2001). The Army paid for two years and supplies (approx $162,000). I still borrowed $60,000. I owed 3 years to the Army.

This is how I looked at it: I took the schloarship amount ($162k) and stipend pay for two years $32,000 (approximately, can't remember exactly and it was 1998) and divided it by 3 (the number of active duty years), which equals $64,667. I tacked on $64,667 to my salary of each year I was active duty (base, bonus, BAH, BAS), which paid $55,000 . So by the way I look at it, I was making $119,667 a year for three years.

Now I didn't include my Individual Ready Reserve years (IRR) because no dentist yet or ever had been called back into active duty from the IRR. Most of my peers considered ourselves "free and clear", although technically we weren't.

Now you may disagree with the way I look at it, and divide the scholarship amount by eight (the full obligatory term). But hey, looking at it this way made me feel a whole lot better.

In the scale of a 20-30 year career, 3-4 years in the Army is a drop in the bucket. WHile you won't learn much business, you will learn to build speed, may sharpen your abilities with exposure to specialists or the AEGD, and learn office management skills. You could moonlight on the side if you wanted.

Regarding the taxes, if you don't change your witholdings from (W4), expect approximately a 30% deduction. If you are savvy enough to predict your tax situation, you can adjust your witholdings, drop the percentage deduction and instead of getting one big return (as most young students do), you pay a little or get a little back.

If you want to calculate your projected debt and loan payoff, a good place to go is bankrate.com. Click on the mortgage calculator button. Enter your student loan amount as your "mortgage", enter your interest rate, and select the term (15 or 30 years...and I think Sallie Mae still offers only these terms). You'll get a chart with your loan payment ammortized over the life of the loan.

Hope this helps.


Edit: I didn't factor in the stipend at first post.

 

[eric275]

Now the “happiest” part – with HPSP you will have no loans for tuition/fees, thus if you go civilian life, and want to repay 200k in loan within 3 years, you will need to have additional 65,000 income. So your civilian income in order to match military HPSP will have to be at least 134K. So fresh grad civilian pay (100-125K and more) is somewhere near to military HPSP benefits (and you don’t need to deploy, take IA task, stand duty; also the more you work in civilian life, the more you earn – in military pay stays the same no matter how good/bad are you, how many hours you work – and expect to work at least 40hrs a week) .[/COLOR]

I'm not gettting how you claim that $100-$134K is near to military HPSP benefits? Considering that your $100-$134k is pre-tax, you'll actually take home about $70-$100k post tax. Add on health benefits, any retirement, lost revenure for vacation time and it would be pretty hard to pay off $300k+ in three years unless you live in a box and eat Ramen noodles.

Another way to compare the value ....Add up your three years of HPSP benefits, $300k, plus your yearly income in the military for 3 years, $210k, and divide by three years. $300k + $210k = $510k / 3 = $170k/year. Now keep in mind that the $170k is POST TAX so you would actually have to make ~$221k per year (assuming that your tax rate will be ~30%) to equal the value of your HPSP scholarship and have the capital to pay your loans off three years after graduation.

Granted my example is leaving out tax write-offs and credits for interest paid on student loans as a civilian dentist but I'm also not adding to the military side the ~$6k value to take 30 days vacation, the money spent on CE, malpractice insurance, health insurance, etc so we'll just call it a wash for simplicity sake.

 

[Stripegum101]

"PLUS one additional catch – bonus will require 4 years payback contract, thus you will end-up having 4 years obligation for 3 years of school + $20,000 “we got you for longer” loan"

Can anyone else confirm that statement? I guess it wouldn't matter if I decide to stay in the military but I don't know what I want at this point and would like to keep options open.

"but end up with ~200K in my bank account" - by this I meant since the military will take care of all my living expenses (housing, etc) and I won't have much free time to spend my pay...won't it all end up in savings.

 

[KOM]

Eric275's financial summary is much more accurate.

Kalvydas, take a closer look at some of your reasoning and run the numbers again. Also, even if you were to pay off your loan in 3 years, you'd still rack up a significant amount of interest just in that time frame that hasn't been spoken for with regards to your #6.

 

[teeth63a]

"PLUS one additional catch – bonus will require 4 years payback contract, thus you will end-up having 4 years obligation for 3 years of school + $20,000 “we got you for longer” loan"

Can anyone else confirm that statement? I guess it wouldn't matter if I decide to stay in the military but I don't know what I want at this point and would like to keep options open.

"but end up with ~200K in my bank account" - by this I meant since the military will take care of all my living expenses (housing, etc) and I won't have much free time to spend my pay...won't it all end up in savings.

Most lump the BAH and BAS as part of "regular" pay (but it is tax free). The military takes care of your housing by giving you the BAH (Basic Allowance for Housing), and if you live off post, you'll be using that to pay your rent. If you live on post, you don't get the BAH.

 

[ArmyDDS2013]

Assuming you do get BAH and live in a decently high priced area and attended an expensive private school, you civilian income would need to be closer to 200,000/year to equal the entire financial package you get with hpsp, stipend, and no prior service 0-3 pay.

And eric is right, in order to pay off 250-300k in a debt in 4 years would require earning a lot, working a lot, and living in a closet eating ramen noodles and $1 dollar menu at mcdonalds.

 

[DrReo]

You need to factor in the goodwill if you start a business a year after graduation. Investing 1 year as an associate and then 2 years into your business will put you ahead in terms of owning potential. You cannot quantify, but the sooner you start your business, the sooner you get situated.... and can reach your maximum earning potential.

 

[kalvydas]

Assuming you do get BAH and live in a decently high priced area and attended an expensive private school, you civilian income would need to be closer to 200,000/year to equal the entire financial package you get with hpsp, stipend, and no prior service 0-3 pay...

The thing is: HPSP pays your tuition, fees and gives $1,900 stipend. There is no BAH during school, thus even if you get HPSP you might need to take additional loan for living expenses.

Three year HPSP at NYU gives: $62,000(tuition)x3(years)=$186,000 plus $1,900(stipend)x36(months)=68,400 so HPSP saves you $254,400 (186,000+68,400). Yearly pay out 254,400/3=84,800. So civilian in order to match military+HPSP pay comes to : 69,000 (regular military pay) + 84,000(tuition/fees stipend loan)= 153,000.

If your school is in expensive area HPSP might not be enough to graduate withoul additional loans. Thus saying that you might end up with $300,000 - 400,000 loans without HPSP and $0 loans with HPSP is not correct.

 

[ArmyDDS2013]

The thing is: HPSP pays your tuition, fees and gives $1,900 stipend. There is no BAH during school, thus even if you get HPSP you might need to take additional loan for living expenses.

Three year HPSP at NYU gives: $62,000(tuition)x3(years)=$186,000 plus $1,900(stipend)x36(months)=68,400 so HPSP saves you $254,400 (186,000+68,400). Yearly pay out 254,400/3=84,800. So civilian in order to match military+HPSP pay comes to : 69,000 (regular military pay) + 84,000(tuition/fees stipend loan)= 153,000.

If your school is in expensive area HPSP might not be enough to graduate withoul additional loans. Thus saying that you might end up with $300,000 - 400,000 loans without HPSP and $0 loans with HPSP is not correct.

The 4 year hpsp makes quite a difference in total financial support.

Edit: Adding in the support to military pay is the assumption that a civilian dentist would be paying back all loans within 4 years. Otherwise it's impossible to quantify this comparison.

Using your numbers, NYU for 4 years is going to be 62,000/year times 4. This is assuming no increase in tuition which we know isn't going to happen especially in tough economic times like right now.

4 years tuition alone is $248,000. You need to add in costs of equipment, books, etc. which is easily 5k-10k per year. Let's just say it'll add 15,000 to the total tuition costs. That is $263,000 total. Add the stipend $2100/month averaged for increases (and 1.5 months of 0-1 pay) over 4 years is $100,000, add the 20k bonus and the total support provided is 263 + 100 + 20 = $383,000.

Of course in NY you would probably need to take out an additional 8500 or so of unsubsidized loans which is interest free and can be deferred 6months of 1 year after graduation (not sure which one).

$383,000 /4 years = $95700.

A $95,700 net salary is roughly a $120-130k salary per year. The military pay (60-80k) is just extra if you want to think of it that way. This is the only way I think about it otherwise it makes me sick that a new graduate will be earning twice what I will make in the Army =)

 

[teeth63a]

A $95,700 net salary is roughly a $120-130k salary per year. The military pay (60-80k) is just extra if you want to think of it that way. This is the only way I think about it otherwise it makes me sick that a new graduate will be earning twice what I will make in the Army =)

It looks like we all calculate it the same way...tuition/books+stipend+army pay all divided by obligation years.

I myself would definitely factor in the Army pay into your calculation, so it should be

$95,7000 + $70,000 (averaged out)
=$165,700

or in pre-tax dollars
$120,000 +$70,000
=$190,000

In other words you will still be leaps and bounds ahead of your peers in terms of your financial obligation.

 

[DrReo]

It looks like we all calculate it the same way...tuition/books+stipend+army pay all divided by obligation years.

I myself would definitely factor in the Army pay into your calculation, so it should be

$95,7000 + $70,000 (averaged out)
=$165,700

or in pre-tax dollars
$120,000 +$70,000
=$190,000

In other words you will still be leaps and bounds ahead of your peers in terms of your financial obligation.

It all depends what you do while you're in the service or in civilian world. A dentist I shadowed (in a rural area) is building a massive practice and will be hiring an associate. He graduated 5 years ago...

 

[jfitzpat]

You need to factor in the goodwill if you start a business a year after graduation. Investing 1 year as an associate and then 2 years into your business will put you ahead in terms of owning potential. You cannot quantify, but the sooner you start your business, the sooner you get situated.... and can reach your maximum earning potential.

I don't think most practicing dentists would put much stock in a couple years of good will being worth 350k. There is a recent thread over at Dental Town discussing this topic and the dentists over there are almost universal in their assessment that if you need to borrow 350k to go to dental school, the military is the way to go. Sure there are some dentists that are buliding booming practices are few years out of school, but they are the exception and not the rule.

 

[kalvydas]

A $95,700 net salary is roughly a $120-130k salary per year. The military pay (60-80k) is just extra if you want to think of it that way. This is the only way I think about it otherwise it makes me sick that a new graduate will be earning twice what I will make in the Army =)

I do not discourage anyone from joining military, but if you join military only for money – you will be really disappointed. Looking only from financial standpoint – military is not worth that.

I am trying to let people see both sides of military. As enlisted, I met/worked with too many people who were really disappointed with their choice to go military way. Working with person whose only thoughts are "I hate this life", "I have xx days left to serve", "I don't care about anything, I am just serving my time", is really hard and unproductive. Recruiters tell you only bright and shine side of military, none of them will tell you bad side, will not give you adverse examples of military life. That's their job: to get people in no matter what (even if you/they have to lie, falsify test results, even flush controlled substances out of your body before "pee test"). The only way to get any negative information from recruiters is to ask them, and sometimes even to ask same question over and over again.

OK, now about financial standpoint:
The more expensive school – more attractive military is. The cheaper school – less attractive military is
1) The most expensive schools (I googled them) are (based on tuition, fees, supply and not accounting living expense/transportation, as HPSP do not cover them)
a) University of Southern California School of Dentistry (USC Dental):Tuition: $61,953 Fees: $2,253 Equipment: $8,593 Total: $74K
b) University of Pennsylvania, School of Dental Medicine (UPenn): Tuition: $53,990
General fee: $2,000 Books, supplies: $1,050 Misc: $4,725 Instruments: $6,496 Technology fee: $536 Clinical apparel: $166 Total: 69K
c) New York University College of Dentistry (NYU Dental):Tuition: $52,510 Fees, books, instruments: $9,884 Total: 62K
d) Boston University Goldman School of Dental Medicine (BU Dental): Tuition: $51,990
Fees, instruments: $6,525 Books, supplies: $1,975 Total: 60K
e) Tufts University School of Dental Medicine (Tufts Dental): Tuition: $48,300 Dental kit: $3,200 Fees, charges, supplies: $4,741 Books, supplies: $2,250 Total: 59K
2) Contract time: anything less than 3 years is not worth. Signing HPSP for 2 years will incur 3 years obligations, thus you will have to divide two year tuition and fees by 3 to get actual HPSP benefit.
3) AEGD – looking only from financial standpoint AEGD is waste of your financial future. AEGD is neutral year, thus member with 4 years HPSP and 1 year AEGD will end up having 5 years of total active service. To get actual HPSP benefit, you will have to divide total tuition and fees by 5 to get actual HPSP benefit.
4) 20K bonus, worth only if you sign 4 years HPSP contract. 3 year HPSP with bonus will incur 4 year obligation, and 3 year HPSP with bonus and AEGD will give you 5 year total service, thus you will have to divide 3 years tuition and fees by five (in this case HPSP is totally unattractive)
5) Tax benefits: only two parts of your military pay is tax free (BAH and BAS), everything else is taxable. Also you HPSP stipend while in school and bonus are both taxable. Thus actual HPSP benefit from stipend and bonus can be very different from one person to another.
My point is: if you join military only for financial reasons, you need to think hard and really do you math. If you expect to earn 125-150K after your school, military might not be worth it.
Two last calculations: (will use USC as most expensive school)
Tuition: 74Kx 4= 296K Stipend: 1,900 x 48 = 91K Total: 387K for 4 years.
1) If you do only 4 years HPSP and no AEGD- yearly benefit will be 97K, and civilian salary needs to be at least 70K+97K= 167K for 4 years to match military
2) If you do 4 years HPSP and 1 year AEGD – yearly benefit will be 78K, and civilian salary needs to be at least 70K+78K= 148K for 5 years to match military. I think having 5 years associate experience, you can make more than 148K

 

[jfitzpat]

I do not discourage anyone from joining military, but if you join military only for money – you will be really disappointed. Looking only from financial standpoint – military is not worth that.

I am trying to let people see both sides of military. As enlisted, I met/worked with too many people who were really disappointed with their choice to go military way. Working with person whose only thoughts are "I hate this life", "I have xx days left to serve", "I don't care about anything, I am just serving my time", is really hard and unproductive. Recruiters tell you only bright and shine side of military, none of them will tell you bad side, will not give you adverse examples of military life. That's their job: to get people in no matter what (even if you/they have to lie, falsify test results, even flush controlled substances out of your body before "pee test"). The only way to get any negative information from recruiters is to ask them, and sometimes even to ask same question over and over again.

OK, now about financial standpoint:
The more expensive school – more attractive military is. The cheaper school – less attractive military is
1) The most expensive schools (I googled them) are (based on tuition, fees, supply and not accounting living expense/transportation, as HPSP do not cover them)
a) University of Southern California School of Dentistry (USC Dental):Tuition: $61,953 Fees: $2,253 Equipment: $8,593 Total: $74K
b) University of Pennsylvania, School of Dental Medicine (UPenn): Tuition: $53,990
General fee: $2,000 Books, supplies: $1,050 Misc: $4,725 Instruments: $6,496 Technology fee: $536 Clinical apparel: $166 Total: 69K
c) New York University College of Dentistry (NYU Dental):Tuition: $52,510 Fees, books, instruments: $9,884 Total: 62K
d) Boston University Goldman School of Dental Medicine (BU Dental): Tuition: $51,990
Fees, instruments: $6,525 Books, supplies: $1,975 Total: 60K
e) Tufts University School of Dental Medicine (Tufts Dental): Tuition: $48,300 Dental kit: $3,200 Fees, charges, supplies: $4,741 Books, supplies: $2,250 Total: 59K
2) Contract time: anything less than 3 years is not worth. Signing HPSP for 2 years will incur 3 years obligations, thus you will have to divide two year tuition and fees by 3 to get actual HPSP benefit.
3) AEGD – looking only from financial standpoint AEGD is waste of your financial future. AEGD is neutral year, thus member with 4 years HPSP and 1 year AEGD will end up having 5 years of total active service. To get actual HPSP benefit, you will have to divide total tuition and fees by 5 to get actual HPSP benefit.
4) 20K bonus, worth only if you sign 4 years HPSP contract. 3 year HPSP with bonus will incur 4 year obligation, and 3 year HPSP with bonus and AEGD will give you 5 year total service, thus you will have to divide 3 years tuition and fees by five (in this case HPSP is totally unattractive)
5) Tax benefits: only two parts of your military pay is tax free (BAH and BAS), everything else is taxable. Also you HPSP stipend while in school and bonus are both taxable. Thus actual HPSP benefit from stipend and bonus can be very different from one person to another.
My point is: if you join military only for financial reasons, you need to think hard and really do you math. If you expect to earn 125-150K after your school, military might not be worth it.
Two last calculations: (will use USC as most expensive school)
Tuition: 74Kx 4= 296K Stipend: 1,900 x 48 = 91K Total: 387K for 4 years.
1) If you do only 4 years HPSP and no AEGD- yearly benefit will be 97K, and civilian salary needs to be at least 70K+97K= 167K for 4 years to match military
2) If you do 4 years HPSP and 1 year AEGD – yearly benefit will be 78K, and civilian salary needs to be at least 70K+78K= 148K for 5 years to match military. I think having 5 years associate experience, you can make more than 148K

There are some major flaws with your analysis. I'm too lazy to address them in detail, but as for a couple:

1. You do not take into account any interest or tuition increases running on the debt you would take out if you borrowed the money. Right now USC has a cost of attendance over 100k a year. With interest and tution increases, that will easily be 450k by the time you graduate. Plus, interest will run while you are paying it back. You compare the civilian salary vis a vis the benefit gained for HPSP. What you should be doing is comparing your military salary vis a vis the cost of paying back the 450k loan over the time period you are in the military.

In the case of USC, the cost of paying back 450k over four years at 6% would be $10,500 per month. That is $126,000 a year in AFTER TAX dollars, which is more like $168,000 in pretax dollars. Add this to the $70,000 and you get $238,000. That is what you would need to average over your first four years of practice to make it financially better to not take HPSP.

2. You treat the AEGD like a wasted year. You do realize that kids who aren't in the military also do AEGDs and they sure as hell don't get paid 70k a year while they are doing it. It is a valuable way to get experience in areas that dental school doesn't cover in enough detail.

I will always tell people not to join the military JUST for the money, but there is no question that for more expensive schools it makes financial sense. You say that people should do the math and I agree, but you need to make sure you are making the correct calculations taking into account all of the variables.

 

[kalvydas]

You do not take into account any interest or tuition increases running on the debt you would take out if you borrowed the money. Right now USC has a cost of attendance over 100k a year.

We need to clearly differentiate cost of attendance and tuition/fees. Cost of attendance includes: tuition, fees, board/room, transportation and other expenses. HPSP pays only tuition and fees. HPSP will not reimburse total cost of attendance. Thus you will have to cover difference between total cost minus tuition and fees out of your taxable $1,900 stipend. (As right now total coast of attendance at USC is 101K (not counting last year where tuition/fees drops to 44K), and tuition/fees is 74K. Thus difference that will not be covered by HPSP is 101-74= 27K. Stipend will cover 1,900x12 = 24K, and you might be short by 3k each year). If you live in expensive area, $1,900 might not be enough, and you might need to take additional loans (even with HPSP contract).

My point is (and I think many others posted in this topic will agree): if you attend private/expensive school - HPSP might be good choice (run your own numbers). If you attend state/cheap school - HPSP might be wrong choice (especially if you are basing your decision solely from financial standpoint).

 

[jfitzpat]

We need to clearly differentiate cost of attendance and tuition/fees. Cost of attendance includes: tuition, fees, board/room, transportation and other expenses. HPSP pays only tuition and fees. HPSP will not reimburse total cost of attendance. Thus you will have to cover difference between total cost minus tuition and fees out of your taxable $1,900 stipend. (As right now total coast of attendance at USC is 101K (not counting last year where tuition/fees drops to 44K), and tuition/fees is 74K. Thus difference that will not be covered by HPSP is 101-74= 27K. Stipend will cover 1,900x12 = 24K, and you might be short by 3k each year). If you live in expensive area, $1,900 might not be enough, and you might need to take additional loans (even with HPSP contract).

My point is (and I think many others posted in this topic will agree): if you attend private/expensive school - HPSP might be good choice (run your own numbers). If you attend state/cheap school - HPSP might be wrong choice (especially if you are basing your decision solely from financial standpoint).

I don't think you really need to differentiate. HPSP will actually pay you about 27k or 28k a year in pay (when you take into account the 45 day ADT). Almost no school is going to give you that much living expense loans. With that in mind, the cost of attendance is an accurate depiction of the HPSP benefits. Heck, if anything the cost of attendence might even represent on the low end. If you would need to take out additional loans under HPSP, you would need to take them out above and beyond cost of attendence even if you weren't on HPSP, so it would be a wash.

I agree that for cheaper schools or for less than a three year contract, it doesn't make sense unless you really want to be in the military. I just think the numbers you are posting or heavily skewed and I don't want people to base their decisions on them.

 

[AFDDS]

I do not discourage anyone from joining military, but if you join military only for money – you will be really disappointed. Looking only from financial standpoint – military is not worth that.

I am trying to let people see both sides of military. As enlisted, I met/worked with too many people who were really disappointed with their choice to go military way. Working with person whose only thoughts are "I hate this life", "I have xx days left to serve", "I don't care about anything, I am just serving my time", is really hard and unproductive. Recruiters tell you only bright and shine side of military, none of them will tell you bad side, will not give you adverse examples of military life. That's their job: to get people in no matter what (even if you/they have to lie, falsify test results, even flush controlled substances out of your body before "pee test"). The only way to get any negative information from recruiters is to ask them, and sometimes even to ask same question over and over again.

You make some good points in this section and I think you are spot on about not joining for financial reasons only.

I would like to touch on my view of the type of people you are talking about above. After being enlisted and and officer, I've seen more of these people than I care to talk about. Most of these people are those that will never be happy. They complain about everything and the world is always against them. I knew one dentist that just couldn't wait to get out so he could start smoking pot again. That's all he ever talked about and how he hated the military because he couldn't do that in the military. That's just stupid.

The majority of them think they are going to join the military and it will be some sort of country club atmosphere and they can just goof around and be a general pain in the backside. The problem is that they never took a moment to think about the fact that they are joining the military. It's a heirarchal society with expectations of how you will act and that you will have a good work ethic. Some never seem to get that and whine and moan about everything. Some people just like to whine and are always being wronged. The world owes them something and so does the military. Many people only think of what is coming and not what they have already received.

If you are thinking of taking a HPSP scholarship, think of these things first:
1) I will be in the military
2) I will be an officer and will be expected to set the example and lead from the front
3) I just had all or most of my dental education (setting me up for the rest of my life) paid for, now I just need to spend some time paying that "loan" back.
4) No one owes me anything else. Now that I've been paid, It's my turn to payback.


If you can't honestly say those things and believe them, the military probably isn't for you. We can't continue to give everyone a trophy just for playing the game.

 

[license2kill]

This is an informative thread. I have done these similar calculations myself and have also thought about not joining the military simply for financial means. On the flip side of comparing how HPSP fits with an expensive school. What do you guys personally think about HPSP and a relatively cheap school? "Unfortunately", I did not get accepted to an expensive school to make HPSP a good financial choice. Given that tuition and fees max at 30K/yr, would you guys still do HPSP if you were in my shoes?

I was simply thinking about joining for the opportunities of specializing and serving the men and women in uniform, everything else was simply extra. But am I drilling holes in my pocket for doing so?

 

[ArmyDDS2013]

We need to clearly differentiate cost of attendance and tuition/fees. Cost of attendance includes: tuition, fees, board/room, transportation and other expenses. HPSP pays only tuition and fees. HPSP will not reimburse total cost of attendance. Thus you will have to cover difference between total cost minus tuition and fees out of your taxable $1,900 stipend. (As right now total coast of attendance at USC is 101K (not counting last year where tuition/fees drops to 44K), and tuition/fees is 74K. Thus difference that will not be covered by HPSP is 101-74= 27K. Stipend will cover 1,900x12 = 24K, and you might be short by 3k each year). If you live in expensive area, $1,900 might not be enough, and you might need to take additional loans (even with HPSP contract).

My point is (and I think many others posted in this topic will agree): if you attend private/expensive school - HPSP might be good choice (run your own numbers). If you attend state/cheap school - HPSP might be wrong choice (especially if you are basing your decision solely from financial standpoint).

$1,900 is definitely enough money if you try really hard and budget correctly. Even in New york where a 1 bedroom costs over $2500/month, you can always find a roommate or 2 and stretch the stipend more. The $20,000 bonus for 4 years should make it unnecessary to take out additional loans. You could always take out some unsubstidized loans for equity if you run low on funds. ~8500/year

I would go out and say that the 3 year scholarship is borderline financially speaking especially for a school like USC where the 4th year is far less expensive than the first 3. The 4 year is financially very, very nice. This is only if you are thinking about paying back all your loans within a 4 year time frame. We all did different calcualtions but most of our numbers are very close to eachother.

The tax advantages come in many forms. First the stipend is taxed about a total of 9-10% if you're in single with no dependents. Of the $25,000 you earn, you only pay 2500 in tax (not bad).


Kalvi, using your numbers
5) Pay – for 3 years your pay will be (single, no dependents, no prior military service, living let's say in Norfolk, VA area (one of the biggest Navy bases):
Taxable income:
Base pay: $3,540.30*12 = 42,483.60
Variable Special Pay: $250.00*12 = 3,000
Additional Special Pay = 10,000
Total taxable income: $55,483
After taxes: 55,483 – 7,319 = $ 48164
Non-taxable income:
BAS: $223.04*12 = 2,676.28
BAH (Norfolk, VA): $1534.00*12 = 18,408
Total non-taxable income $21,084
Total income after taxes = $69,248

A net income of $69,248 is about equalivant to a civlian salary of 90-100k.

Most associates I know in Californai for example, earn $400/day or up to 22% of collections. I guess if you're very productive in a good area and confident, you can potentially earn a lot of money as an associate. Here's the thing, you can make 120-150k/year but you end up paying most of your salary back to taxes, loans and interest payments. If the thought of paying a total of 600k-1 million dollars back over 10-15-20 years than be my guest. I would rather earn a modest salary and endure some military bull**** and have a chance to really "serve" others while sacrificing some freedom but having made the best financial decision.

 

[AFDDS]

Using Sallie Mae's loan repayment calculator ( I know it's more convoluted than this, but I don't have the time right now to do all the numbers)

$100K subsidized stafford loan at graduation @ 5% interest
standard payback time allowed - 10 years
minimum monthly payment - $1061.00
Total interest over 10 years - $27,279
Total amount to payback - $127,279

This is the standard payment option only. You can calculate it by amount earned and it will change the amount.

 

[Focker2Fillings]

2) Tuition, equipment, books paid – that’s nice. Under reimbursement you can get (at least in US Navy: Sonic scaler - $552, Loupes - $1000, Caulk/Densply Prolite - $1450, Cavijet - $1450, Digital Diagnostic Camera - $1500, plus lots of cheaper instruments/supply)

This is the first I've heard of anyone being reimbursed for anything besides loupes. Anyone else had experience with being reimbursed for any of the other stuff, or anything else for that matter? I can't imagine a school requiring a digital diagnostic camera, etc. Maybe they just submitted it and it was approved?

 

[ArmyDDS2013]

This is the first I've heard of anyone being reimbursed for anything besides loupes. Anyone else had experience with being reimbursed for any of the other stuff, or anything else for that matter? I can't imagine a school requiring a digital diagnostic camera, etc. Maybe they just submitted it and it was approved?

anything that the military approves used to be reimbursed with no questions asked. There is a list of items. I've been hearing some schools will only sign off on required instruments these days - not recommended.

 

[krmower]

anything that the military approves used to be reimbursed with no questions asked. There is a list of items. I've been hearing some schools will only sign off on required instruments these days - not recommended.

Your best bet is to read the HPSP manual. For the Army this is found in MODS. If after reading it you aren't sure about anything you can call the HPSP program office to double check, or you can buy the item (don't open it), see if you get reimbursed - if not return it.

I spoke with the HPSP guy that is over dental the other day while waiting for the elevator. His biggest frustration was all the emails and phone calls he gets for things that they list in their FAQ or that are in the manual.

 

[umkcdds]

if it is on your school's list of REQUIRED supplies, then it is fine. you can submit just about anything that your school official will sign off on, but if it isn't on the school's official list of required supplies, then prepare for it to be rejected.

from time-to-time, people will submit something for reimbursement, and the army will ask for a supporting document, from the school, proving that the item is on the list of REQUIRED supplies (read: not just an optional piece of equipment). if it isn't on the list, it will be rejected.

anything that is on the school's list of REQUIRED supplies will be approved.

 

[mola_pulla]

Does anyone know how much we make if we do the AEGD? I've heard we don't get the $10,000 bonus during that year.
Also, has anyone taken out loans during dental school, above what the stipend is? I've had to take out about 1000.00 a month above the stipend. I live in Vegas and our stipend only pays for our rent and utilities. We then have food, health insurance, gas for our car and some other things. I have a wife and children. I was wondering if we're able to put the loans borrowed on a 30 year payoff plan after graduation.
The reason I ask is that I've heard during the AEGD you only get paid about 55,000, and I wonder if that will be enough to pay off my loans and still live off of.
I'm just curious to see if someone has this information. Thank you.

 

[ArmyDDS2013]

Does anyone know how much we make if we do the AEGD? I've heard we don't get the $10,000 bonus during that year.
Also, has anyone taken out loans during dental school, above what the stipend is? I've had to take out about 1000.00 a month above the stipend. I live in Vegas and our stipend only pays for our rent and utilities. We then have food, health insurance, gas for our car and some other things. I have a wife and children. I was wondering if we're able to put the loans borrowed on a 30 year payoff plan after graduation.
The reason I ask is that I've heard during the AEGD you only get paid about 55,000, and I wonder if that will be enough to pay off my loans and still live off of.
I'm just curious to see if someone has this information. Thank you.

Did you take our unsubsidized loans? Those don't need to be paid back until sometime after you graduate. Also there is a pre-commission loan you can obtain through USAA that is for $25,000 on a 2.99% APR which is great.

 

[krmower]

Does anyone know how much we make if we do the AEGD? I've heard we don't get the $10,000 bonus during that year.
Also, has anyone taken out loans during dental school, above what the stipend is? I've had to take out about 1000.00 a month above the stipend. I live in Vegas and our stipend only pays for our rent and utilities. We then have food, health insurance, gas for our car and some other things. I have a wife and children. I was wondering if we're able to put the loans borrowed on a 30 year payoff plan after graduation.
The reason I ask is that I've heard during the AEGD you only get paid about 55,000, and I wonder if that will be enough to pay off my loans and still live off of.
I'm just curious to see if someone has this information. Thank you.

You make full pay including the $10k during any training. The rule changed in 2004 to allow it. You should be making around $75k/yr.

 

[hattrack04]

You make full pay including the $10k during any training. The rule changed in 2004 to allow it. You should be making around $75k/yr.

I remember getting an e-mail stating that we will not get the $10,000 until you complete your AEGD if you decide to not take a licensing exam (such as the WREB)....can someone else confirm this?

 

[AFDDS]

I remember getting an e-mail stating that we will not get the $10,000 until you complete your AEGD if you decide to not take a licensing exam (such as the WREB)....can someone else confirm this?

You must have an active, valid license in order to receive the ASP. If you decide to wait, you won't have a license and therefore cannot receive ASP until you complete the AEGD.

 

[crane820]

I do not discourage anyone from joining military, but if you join military only for money – you will be really disappointed. Looking only from financial standpoint – military is not worth that.

I am trying to let people see both sides of military. As enlisted, I met/worked with too many people who were really disappointed with their choice to go military way. Working with person whose only thoughts are “I hate this life”, “I have xx days left to serve”, “I don’t care about anything, I am just serving my time”, is really hard and unproductive. Recruiters tell you only bright and shine side of military, none of them will tell you bad side, will not give you adverse examples of military life. That’s their job: to get people in no matter what (even if you/they have to lie, falsify test results, even flush controlled substances out of your body before “pee test”). The only way to get any negative information from recruiters is to ask them, and sometimes even to ask same question over and over again.

OK, now about financial standpoint:
The more expensive school – more attractive military is. The cheaper school – less attractive military is
1) The most expensive schools (I googled them) are (based on tuition, fees, supply and not accounting living expense/transportation, as HPSP do not cover them)
a) University of Southern California School of Dentistry (USC Dental):Tuition: $61,953 Fees: $2,253 Equipment: $8,593 Total: $74K
b) University of Pennsylvania, School of Dental Medicine (UPenn): Tuition: $53,990
General fee: $2,000 Books, supplies: $1,050 Misc: $4,725 Instruments: $6,496 Technology fee: $536 Clinical apparel: $166 Total: 69K
c) New York University College of Dentistry (NYU Dental):Tuition: $52,510 Fees, books, instruments:$9,884 Total: 62K
d) Boston University Goldman School of Dental Medicine (BU Dental): Tuition: $51,990
Fees, instruments: $6,525 Books, supplies: $1,975 Total: 60K
e) Tufts University School of Dental Medicine (Tufts Dental): Tuition: $48,300 Dental kit: $3,200 Fees, charges, supplies: $4,741 Books, supplies: $2,250 Total: 59K
2) Contract time: anything less than 3 years is not worth. Signing HPSP for 2 years will incur 3 years obligations, thus you will have to divide two year tuition and fees by 3 to get actual HPSP benefit.
3) AEGD – looking only from financial standpoint AEGD is waste of your financial future. AEGD is neutral year, thus member with 4 years HPSP and 1 year AEGD will end up having 5 years of total active service. To get actual HPSP benefit, you will have to divide total tuition and fees by 5 to get actual HPSP benefit.
4) 20K bonus, worth only if you sign 4 years HPSP contract. 3 year HPSP with bonus will incur 4 year obligation, and 3 year HPSP with bonus and AEGD will give you 5 year total service, thus you will have to divide 3 years tuition and fees by five (in this case HPSP is totally unattractive)
5) Tax benefits: only two parts of your military pay is tax free (BAH and BAS), everything else is taxable. Also you HPSP stipend while in school and bonus are both taxable. Thus actual HPSP benefit from stipend and bonus can be very different from one person to another.
My point is: if you join military only for financial reasons, you need to think hard and really do you math. If you expect to earn 125-150K after your school, military might not be worth it.
Two last calculations: (will use USC as most expensive school)
Tuition: 74Kx 4= 296K Stipend: 1,900 x 48 = 91K Total: 387K for 4 years.
1) If you do only 4 years HPSP and no AEGD- yearly benefit will be 97K, and civilian salary needs to be at least 70K+97K= 167K for 4 years to match military
2) If you do 4 years HPSP and 1 year AEGD – yearly benefit will be 78K, and civilian salary needs to be at least 70K+78K= 148K for 5 years to match military. I think having 5 years associate experience, you can make more than 148K

Excellent analysis, very helpful

 

[teeth63a]

Bumping this to the top 'cause I've been asked about it recently.

 

[SEAirLand]

Just throwing my two cents in here...

HPSP is great for higher cost schools. Don't forget there is a second program, HSCP which is good for lower cost schools and if you get into it, your time in dental school counts towards your time in the military.

So, HPSP you start off at zero time in after d-school. With HSCP you start off with 4 years after d-school. This affects your pay level.

I also have under the "ask a navy dentist" thread posted the Navy Student Manual. Its broken into two pdf docs, part one and part two.

ALL the questions that have been asked here, for the most part, is described in detail in the manual. I suggest reading it if you are serious.

 

[abumadni1234]

Bumping this to the top 'cause I've been asked about it recently.

How to you bump the thread

 

[dmdluffy]

How to you bump the thread

By writing bump

 

[SEAirLand]

Bump!

 

[teeth63a]

Bring some flowers, then have a nice dinner at a fancy restaurant, watch a romantic comedy, and then maybe you can bump the thread.

 

[UBDent19]

 

[budda10000]

here is how you have to look at it. For my school the average graduating debt w/ interest being charged will be ~380k
The logic I used when choosing my 3 yr HSPS was this
my debt on graduation will be ~50k(I used some saving's for part of my first yr tuition+COL is really low so I can service my debt w/ the stiped)
Each year of attendance at my school is ~75k minus COL
In addition to this I will make an additional 75k in stiped income(pre-tax)
My military pay for 3 yrs will average 75K with all specialty pay+housing allowance+ect(more like 80k of pre-tax equivalent income)
Finally I will have saved myself about 50,000 in interest payments while in school and an additional ~25k in interest payments per year for the first few years
75,000X3=225K
+75K= 300k
+75kx3=525K
+50k in school interest=575K
+75k(1st 3-4yrs interest)=650K

This doesnt include all the additional interest payments that my fellow students will be paying in the 7-10 years it will take them on average to repay their loans. 650K is the amount of money you would have to make AFTER TAXES in order to beat HSPS at a more expensive school in your first 3 yrs of work. That scenario is highly unlikely. More likely is you will make ~400-450k your first 3 yrs out pre-tax

It made the desition easy

In additiion my branch(US Army) allows you to work in private practive on your off days so I can accrue experience and extra income in the private sector at the same time. In addition I have FULL BENEFITS and no costs of doing business(malpractice ect) for what its worth.

 

[user101]

The things I am certain of:
1. Only three years payback
2. All tuition, equipment, books are paid
3. ~ $2000 monthly stipend plus 20K bonus
4. Average cost of attending a private dental school is around 300K - 350K

The above in bold is not correct..if you accept the bonus you must commit 4 years.

Only considering finances, this scholarship is >>>>> anything else.
It matters not if new dentists make 100-125k per year if they are drowning in increasing debt that is greater than their salary. If they tried to pay off their loans within 3-4 years the hpsp recipient would be the one with more money even if only making 60k.

 

[vellnueve]

Why bring back a 18 month old thread?

 

[Tiankum]

The things I am certain of:
1. Only three years payback
2. All tuition, equipment, books are paid
3. ~ $2000 monthly stipend plus 20K bonus
4. Average cost of attending a private dental school is around 300K - 350K

The above in bold is not correct..if you accept the bonus you must commit 4 years.

Only considering finances, this scholarship is >>>>> anything else.
It matters not if new dentists make 100-125k per year if they are drowning in increasing debt that is greater than their salary. If they tried to pay off their loans within 3-4 years the hpsp recipient would be the one with more money even if only making 60k.

If you take the 20k bonus, you'll owe 4 years.

 

[Hedgy]

I think this is a very relevant thread. People want to know what they can make and what financial obligations they will have. I encourage those of you who are interested in this thread to check out a similar one on Dentaltown. Just search HPSP and you'll find the thread from last month. I think it gives a very good perspective from many who are in private practice.

I think one thing that gets overlooked in all of this is how much debt dentists are taking on in private practice. I don't know a dentist out that would EVER payback dental school loans in 3-4 years. Most are on a 20-30 year plan. Purchasing a practice can be from $300-$1M+ and it's not easy getting financed like it used to be. These used to be paid off in 7 years, now many are financing 10-15 years. Consider $300k student loan debt + say $500k practice financing + House? + new car (we need to live the lifestyle) and you are easily over $1M in debt and you haven't seen patient #1 yet. A lot can be said about not having $200-300k debt hanging over your head when you decide to buy a practice. If one plans on practicing for 30 years, chances are the 4-5 years of unique experience, confidence, pride in country and for those who serve will be more relevant in the grand scheme of life than the small monetary differences. Finances are a part of life, but I don't let them define me. Don't let money define you either.

 

[ChapelHillT]

I think this is a very relevant thread. People want to know what they can make and what financial obligations they will have. I encourage those of you who are interested in this thread to check out a similar one on Dentaltown. Just search HPSP and you'll find the thread from last month. I think it gives a very good perspective from many who are in private practice.

I think one thing that gets overlooked in all of this is how much debt dentists are taking on in private practice. I don't know a dentist out that would EVER payback dental school loans in 3-4 years. Most are on a 20-30 year plan. Purchasing a practice can be from $300-$1M+ and it's not easy getting financed like it used to be. These used to be paid off in 7 years, now many are financing 10-15 years. Consider $300k student loan debt + say $500k practice financing + House? + new car (we need to live the lifestyle) and you are easily over $1M in debt and you haven't seen patient #1 yet. A lot can be said about not having $200-300k debt hanging over your head when you decide to buy a practice. If one plans on practicing for 30 years, chances are the 4-5 years of unique experience, confidence, pride in country and for those who serve will be more relevant in the grand scheme of life than the small monetary differences. Finances are a part of life, but I don't let them define me. Don't let money define you either.

 

[docdok]

1

 

[docdok]

1

 

[docdok]

I think this is a very relevant thread. People want to know what they can make and what financial obligations they will have. I encourage those of you who are interested in this thread to check out a similar one on Dentaltown. Just search HPSP and you'll find the thread from last month. I think it gives a very good perspective from many who are in private practice.

I think one thing that gets overlooked in all of this is how much debt dentists are taking on in private practice. I don't know a dentist out that would EVER payback dental school loans in 3-4 years. Most are on a 20-30 year plan. Purchasing a practice can be from $300-$1M+ and it's not easy getting financed like it used to be. These used to be paid off in 7 years, now many are financing 10-15 years. Consider $300k student loan debt + say $500k practice financing + House? + new car (we need to live the lifestyle) and you are easily over $1M in debt and you haven't seen patient #1 yet. A lot can be said about not having $200-300k debt hanging over your head when you decide to buy a practice. If one plans on practicing for 30 years, chances are the 4-5 years of unique experience, confidence, pride in country and for those who serve will be more relevant in the grand scheme of life than the small monetary differences. Finances are a part of life, but I don't let them define me. Don't let money define you either.

What a great response! Love it!

I'll add something simple.

Whether you go straight into PP or military for 4 years does it really matter what you choose? You will most likely practice 30 years heck some of the docs I worked with back in the day practiced till they were 80!!!

Point is this: 4 years military is a drop in the bucket in your entire dental career.

Also, if you think you know everything after 4 years in dental school; well....please stay away i don't want you working on any of my patients =))

4 years Military; no debt, build skills; serve your country; network in the state you probably want to live in so when you get out you got a job lined up; you are searching for that practice getting that lined up etc etc...

Just because you are lin the military doesn't mean you are 100% in the military; after the end of the day you go home you live among civilians just like anyone else.