$400,000 in debt?

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jenfromdablock

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This is the magic number for most private schools. Can someone reassure me that everything is going to be alright?
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Don't expect to be living the lifestyle many people say dentists do live while you are paying off your loans.
 
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jenfromdablock said:
This is the magic number for most private schools. Can someone reassure me that everything is going to be alright?
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No, that isn't a magic number for private institutions. And you've already made a long thread on this subject. Cram yourself in a one bedroom with four other people and panhandle for Ramen if you're freaking out about the necessary entrance fee into this awesome career.
 
Well just think of it like this...would you rather take home 40K each year and enjoy being a dentist? or take home 40K each year (if your lucky) working as a research assistant or teacher (assuming you got a bio degree)?

^also agree with Ferneezy. If you are single you can save a ton of $ by squeezing into an apartment with a few others.
 
Debt is certainly a big issue and will continue to grow larger as long as the student loan bubble gets bigger. There is really no way that you will be paying those loans off any time soon. $3k/month for the next 30 years seems to be the norm nowadays for graduating dentists. Of course, you could be aggressive about your repayment, but even that will take many years. That $400000 is just the principal - you also have to factor in the accrued interest, which starts accruing as soon as you receive your loan disbursement. So it might actually be closer to $450k by the time you graduate. You will need to look at the amortization. Now I don't know what the current interest rate on federal loans is, but last I heard it was 6.8%. It could be higher now, but even at 6.8% with $450k debt, that means that you will pay ~$30k your first year after school just on the interest alone! On top of that you must pay down the principal of your loan. Student loans will not be the only loan that you will have to worry about. If you wanna buy a house, then you will have to pay mortgage and if you need a nice car, you will have to get a loan for that as well. This is also not to mention that you will also need to pay for your CE classes, disability, and malpractice insurance. Not to mention that you will be taxed heavily on your income as a dentist - and very little, if any, of your student loan repayment warrants a tax deduction.

You may want to look into the military HPSP option.
 
We are educated adults, therefore we must not only be conscious of the debt but also plan accordingly. For that fee, we will have the ability to open up or own shop (eventually!) and finally do what we want. If that means making 40K for the first part fine I can be savvy with my money! It takes time to make your life how you want it, don't expect it to be handed to you as soon as you graduate
 
jenfromdablock said:
This is the magic number for most private schools. Can someone reassure me that everything is going to be alright?
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Just do the math. It's a lot of money to repay, and if you want to do it reasonably fast you'll have to work very hard and live cheaply.
 
Expert said:
Debt is certainly a big issue and will continue to grow larger as long as the student loan bubble gets bigger. There is really no way that you will be paying those loans off any time soon. $3k/month for the next 30 years seems to be the norm nowadays for graduating dentists. Of course, you could be aggressive about your repayment, but even that will take many years. That $400000 is just the principal - you also have to factor in the accrued interest, which starts accruing as soon as you receive your loan disbursement. So it might actually be closer to $450k by the time you graduate. You will need to look at the amortization. Now I don't know what the current interest rate on federal loans is, but last I heard it was 6.8%. It could be higher now, but even at 6.8% with $450k debt, that means that you will pay ~$30k your first year after school just on the interest alone! On top of that you must pay down the principal of your loan. Student loans will not be the only loan that you will have to worry about. If you wanna buy a house, then you will have to pay mortgage and if you need a nice car, you will have to get a loan for that as well. This is also not to mention that you will also need to pay for your CE classes, disability, and malpractice insurance. Not to mention that you will be taxed heavily on your income as a dentist - and very little, if any, of your student loan repayment warrants a tax deduction.

You may want to look into the military HPSP option.
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Just to clarify this info...
D1 and D2 max for Direct loans is $40,500, D3 and D4 max is $47,167, and current rate is 5.41%. Aggregate total is $224,000 if you have outstanding Stafford Loans. After that, you would cover the rest of the COA using Direct Plus currently at 6.41%. Rates are tied to financial markets and interest rates will be determined each June for new loans being made for the upcoming award year. Interest accumulated during dental school is capitalized when you enter repayment making the principle significantly larger.

As for the OP, a lot can happen in the next ~5 years (repayment begins 6 months after graduation through interest still accumulates), see where life/dental school takes you and how legislation impacts federal student loans in the near future. There will always be some way to pay off your loans but we can't predict how that will turn out.
 
How long has dental tuition been this high? And are there any resources that have looked into recent graduates ability to repay this massive amount Of debt.
 
I liked all of yours answers...some of them really scared me.

I'm all for living with roommates during and after college.

I liked the idea of joining the national guard or doing IBR/PAYE (even if the forgiven amount is "taxed" as income)
 
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If you really want to do this then go for it. If you are worried about debt then maybe figuring up some numbers will give you more guidance.
For example:
You don't do dentistry with no debt and make on average 50k for the next twenty years. So 1 million total.
You do dentistry having 400k in debt and make 120k (lowballing) average for next twenty years. If you pay off that 400k after twenty years, it will total roughly 800k after interest. (120k x 20) - 800k = 1.6 million total.
Now these are just estimates and there are a ton of different variables that could be applied to each calculation such as pay raises, buying a house, or a practice. Plus, there's no telling what could happen in the next twenty years.
Keep in mind that this profession can open up many different doors which can lead to financial gain. Other jobs may not be able to provide as many options.
 
duvaldentist said:
How long has dental tuition been this high? And are there any resources that have looked into recent graduates ability to repay this massive amount Of debt.
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Dental tuition has far outpaced inflation for the last twenty years. Student loan subsidization has fueled this rise in tuition that is not limited to the dental profession. Average student loan debt upon graduation from dental school is about $250,000. However, this figure comes from a survey that included those that had their school paid for by parents. If you don't have help, you could easily pay more. I have several friends that went to school in the Northeast and are now over $400,000 in debt. As a general dentist you will make between $500 and $1000 per day as an associate. If you start a practice that could increase your income but also increase your debt. A practice could easily cost you $500,000.
 
How do people who go to private schools (the vast majority) end up paying back their loans? This isn't a problem of the future....this is happening now.
 
jenfromdablock said:
How do people who go to private schools (the vast majority) end up paying back their loans? This isn't a problem of the future....this is happening now.
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I don't think it is happening right now to the extent that it will be for our class of 2018. tuition rates go up and up and up every year.
 
AVB2104 said:
Call up family members, try military, national guard, etc....

Taking out 400k loan is financial suicide. You'll be paying your loans for the rest of your life.
I don't care how frugal you plan to be. You can't beat the numbers....
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If you family member need a call, I can give them a call ahha j/k. Uncle Sam got my back!
 
AVB2104 said:
Call up family members, try military, national guard, etc....

Taking out 400k loan is financial suicide. You'll be paying your loans for the rest of your life.
I don't care how frugal you plan to be. You can't beat the numbers....
Click to expand...



Yes, and given that dental school is so competitive these days with far more applicants than the number of dental school spots, you will always have people willing to take on that kind of debt. And as long as you have people willing to get themselves into such a deep hole, the cost of dental education will only continue to rise exponentially.
Not too long from now, the average debt will probably be $600k, maybe even close to $700k from some the expensive OOS private dental schools.
The question is at what point will the debt threshold be reached for the vast majority of those considering dentistry as a profession?
Not too long ago, (maybe 6 - 8 years ago), the debt from a private OOS school was on the order of $250 - $300k. It was much lower a few years before that. Now it's ~$400k - $500k. And not too long into the future, it will be $600k, and will continue as long as the threshold debt level is reached.
When will that point be reached? At $600k? $700? Even more?
Only when people decide it's too much and other careers start to appear to be far more secure and rewarding, then maybe we can hope the cost might start to come down.
I honestly fear that not too long from now, $400k debt from dental school will seem to be on the lower end of dental school debt. At that point, people may 'wish' that they had the 'low' level of debt that the OP does.
 
The best suggestion I got from a dentist I shadowed was to learn how to be a good businessman. She was a general dentist and made $700k last year and barely worked. She just had a good marketing system to fill up her chairs as her 3 associates did all the work.. The lowest paid general dentist i shadowed made $180k and only worked till 2 mon-fri. He told me he could easily clear 230k a year but he would rather leave early to coach at the local high school. Granted both of these ppl owned their own practice but the point I'm making is that you will make well over $120k a year if you have any type of business mind so just go where you get in if you don't have a cheaper option. Finances will work themselves out over time.
 
Well, the number of applicants started decreasing for some private schools. ( at least this year).
 
wolfchild007 said:
The best suggestion I got from a dentist I shadowed was to learn how to be a good businessman. She was a general dentist and made $700k last year and barely worked. She just had a good marketing system to fill up her chairs as her 3 associates did all the work.. The lowest paid general dentist i shadowed made $180k and only worked till 2 mon-fri. He told me he could easily clear 230k a year but he would rather leave early to coach at the local high school. Granted both of these ppl owned their own practice but the point I'm making is that you will make well over $120k a year if you have any type of business mind so just go where you get in if you don't have a cheaper option. Finances will work themselves out over time.
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But imagine if you were clearing this kind of money AND didn't have exorbitant debt. THAT is the real winner!!!
 
LaughingGas said:
But I have no other option. 🙁
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Buck up Laughing Gas. You have options. The military is a great option which I can further explain through my own experiences if you are interested. However, ask yourself if you really want to be a dentist. Even with the military you won't escape dental school debt free. Things are bad now and getting worse. Competition is fierce across the country. You could say big cities are really bad while some distant suburbs may only be bad. The Pew Charitable trust says the country needs 10,000 more dentists. I completely disagree with this but no one in power is going to listen to me. Bottomline: Dental fees are not keeping up with inflation. Ask yourself, if you became a dentist, would you be happy making $120,000/year and paying $2500 to 3500 per month in student loan payments for the next 25 years.

The other option, which I know you may not want to hear is to choose another career where people don't try to control your market like they try to control the healthcare profession. No one gets upset when software programmers or bankers make big money. You will find, if you become a healthcare provider, that you will be resented for your success (even by fellow dentists). I know you want to help people too. That's something we should all strive for but you don't have to be a healthcare provider to do that.
 
str8ner, I considered about this profession with the mind of being indefinitely with debt. There are options to become debt free or have less debt through military and other type of scholarships. Unfortunately, being married (wife doesn't want me to go to military) and being a permanent resident limits the options for me.
 
LaughingGas said:
str8ner, I considered about this profession with the mind of being indefinitely with debt. There are options to become debt free or have less debt through military and other type of scholarships. Unfortunately, being married (wife doesn't want me to go to military) and being a permanent resident limits the options for me.
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I certainly understand. I have several friends limited by immigration issues. Dentistry is even difficult for citizens that want to move state to state. Every state has it's own rules. Florida is notoriously difficult to get into. Frankly, you would probably make far more money starting a dental insurance to compete with Delta Dental. The CEO took home 18mil in 2011 despite it being a "nonprofit" organization. Delta has also been aggressively reducing its reimbursement for procedures.
 
Has anyone thought about maybe doing this "PAYE" repayment plan. (Pay As You Earn)... seems almost too good. look it up. 2 stipulations: 1) you cant have a loan prior to 2007 2) you will have a loan on or after 2013 Academic Year.... best thing about this, you get your loans forgiven after 20 years (however you need to pay taxes on the money that will be forgiven). also, lets say you make a modest 100K fresh out of school. with this fancy calculator that includes your state residency (CA in this case) family size (single in this case) and the poverty income (at $11,170), they calculcate your monthly loan repayment at $693.71 per month! Obviously the more you make per year, the more you pay per month...
 
ILLchief said:
Has anyone thought about maybe doing this "PAYE" repayment plan. (Pay As You Earn)... seems almost too good. look it up. 2 stipulations: 1) you cant have a loan prior to 2007 2) you will have a loan on or after 2013 Academic Year.... best thing about this, you get your loans forgiven after 20 years (however you need to pay taxes on the money that will be forgiven). also, lets say you make a modest 100K fresh out of school. with this fancy calculator that includes your state residency (CA in this case) family size (single in this case) and the poverty income (at $11,170), they calculcate your monthly loan repayment at $693.71 per month! Obviously the more you make per year, the more you pay per month...
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It is because the IBR/PAYE/PSLF programs are new and no one has been "forgiven" yet, the first group of people eligible for PSLF will be in 2017 and IBR/PAYE significantly after that. Also, we can't predict how future legislation passed will impact federal student loans. In the end, if you crunch the numbers and have significantly high debt and low income when you enter repayment, PAYE may be the best option and hopefully in 20/25 years your practice will be established and be able to handle the tax burden associated with PAYE/IBR.
 
sjv said:
It is because the IBR/PAYE/PSLF programs are new and no one has been "forgiven" yet, the first group of people eligible for PSLF will be in 2017 and IBR/PAYE significantly after that. Also, we can't predict how future legislation passed will impact federal student loans. In the end, if you crunch the numbers and have significantly high debt and low income when you enter repayment, PAYE may be the best option and hopefully in 20/25 years your practice will be established and be able to handle the tax burden associated with PAYE/IBR.
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Ah okay that makes sense. Didn't know they were relatively new... I only ask bcuz USC kept raving about it during their financial aid session.
 
sjv said:
It is because the IBR/PAYE/PSLF programs are new and no one has been "forgiven" yet, the first group of people eligible for PSLF will be in 2017 and IBR/PAYE significantly after that. Also, we can't predict how future legislation passed will impact federal student loans. In the end, if you crunch the numbers and have significantly high debt and low income when you enter repayment, PAYE may be the best option and hopefully in 20/25 years your practice will be established and be able to handle the tax burden associated with PAYE/IBR.
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Yeah IBR is the route to go. The "tax" isn't 35%...it's more like 25% for the first 250,000 and maybe 35% for the remaining 150,000 assuming your total debt overall is 400k. That average's to about $120,000 "tax" hit....
 
OutRun said:
It's funny you mention that! Not even one month later from your post we see the 2015 proposed budget gutting PSLF, with a proposed cap of $57k (not clear if it's for undergrad or grad)? How many future graduates / specialists would want to go into academics or public health dentistry if this went into effect?

Reference: http://blogs.wsj.com/washwire/2014/...poses-broader-debt-forgiveness-for-students/?
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There has been a lot of debate about this thus far, this is only a proposal so it doesn't mean much until the final budget is passed.
Some good blog posts here around March 5th/6th if you're interested: http://askheatherjarvis.com/blog
 
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"Among the changes proposed Tuesday, individual borrowers would face new limits on how much debt that could have forgiven. The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years. And payments for married borrowers filing separately would be calculated on their combined household adjusted gross income."

Lol. Sucks to be going to USC/all the other rip-off dental schools.

I assume most of you have never worked before. Well, after having worked several years making 6 figures before going to dental school, I can assure you that 3k out of your paycheck every month is a lot. It is hilarious seeing predents justify and convince themselves that they will get through all the debt. It is one thing thinking about it now and later living with this back-breaking debt. At some point, it makes sense to start considering other options.
 
thewingman said:
"Among the changes proposed Tuesday, individual borrowers would face new limits on how much debt that could have forgiven. The amount forgiven for public-sector workers would be capped at $57,500. Borrowers with debt loads above $57,500 would make payments for 25 years. And payments for married borrowers filing separately would be calculated on their combined household adjusted gross income."

Lol. Sucks to be going to USC/all the other rip-off dental schools.

I assume most of you have never worked before. Well, after having worked several years making 6 figures before going to dental school, I can assure you that 3k out of your paycheck every month is a lot. It is hilarious seeing predents justify and convince themselves that they will get through all the debt. It is one thing thinking about it now and later living with this back-breaking debt. At some point, it makes sense to start considering other options.
Click to expand...

That proposed cap is for PSLF. How many dental students plan on going full time into a nonprofit workplace or going into full time clinical/academia at a dental school? Not many so the proposed cap doesn't affect dentistry as much as medicine.
 
$400k is way too much debt. There is a tipping point, and people on the wrong side will be left holding the bag. USC is ridiculous in trying to sell these programs that are not even funded, as they know damn well the onus will be on the students to pay back the debt while their programs gets rich off the federal loans.
 
BrazilianRider said:
Well this thread scares the hell out of me.

I'm just going to pretend I didn't read this and go back to studying for the DAT.
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Work your butt off and get a good scholarship, go to the cheapest school that you can get into, and save as much money that you can now. Although the money you save won't be a dent in terms of tuition, if you are strategic, it can help keep you from taking out more loans for housing and such.
 
Just improve your application and apply for your in-state schools next year, or Creighton (which is a private school that only costs 50k/year)
 
The finances are tough, and I admit that the thought of the repayment has kept me up at night. Having just started my 30's, I hope to make dentistry my final career move. With that being, said, my company recently offered to pay for my masters in CS as an enticement to stay. I guess it just comes down to how happy you'll be with your career in the future, regardless of the money.
 
alxspider said:
$400k is way too much debt. There is a tipping point, and people on the wrong side will be left holding the bag. USC is ridiculous in trying to sell these programs that are not even funded, as they know damn well the onus will be on the students to pay back the debt while their programs gets rich off the federal loans.
Click to expand...

Yeah, I actually emailed USC specifically awhile back about the cost, and their email response amounted to a link to IBR. What a scam.
 
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