Another HPSP Value Analysis

[2th Doc]

Advertisement - Members don't see this ad

A financially astute classmate of mine developed a simple and customizable spreadsheet to assess the value of the HPSP. I noticed the other thread going on about the value of the HPSP and thought I'd add in another approach for the potential benefit it may be to anyone. It primarily takes into account the disparity of the tax situations between a military dentist and private practitioner. There are admittedly a number of omissions like hidden income items, any investment contribution deductions, and other personal details, so you can modify it to suit your needs should you desire to add in more detail.

To be clear, I'm not insinuating that the decision to accept or decline the HPSP, should it be offered, is merely a financial one. The financial aspect is a small cog in the overall machine, but it does deserve some consideration. Hope this spreadsheet helps.

 

[gatorfan99]

So, according to the spreadsheet, you need to make 300k/yr in private practice to match 4yr HPSP scholarship (assuming 450k in students loans)?

 

[2th Doc]

Yes, under the assumption that you would be paying back your student loans in 4 years, like a HPSPer would be "debt free" after 4 years. Note though that this spreadsheet also does not take into consideration stipend, signing bonus, or 1.5 mo/yr active duty pay while in school, so you could add those in as well.

 

[distressstudent]

awesome spread sheet. really like the fact that i can alter the numbers to my liking and have it calculate it for me.

 

[w4nt2baDDS]

Nice, this helps me better understand what tax rates are going to look like.

To compare this with the other spreadsheet I made the other day I switched the loan principal to 240K and changed it to 5 years of military service. The calculated value is $190,093.

This matches what I had guessed/calculated later on in the other thread:

you would need to have a job that is closer to 190K+ for it to wash out the value of the HPSP.

Thanks for sharing this 👍

 

[Roto Picante]

As a young AF dentist I have languished over all of these details myself. Making the decision to apply for/accept the HPSP scholarship is very difficult. And in my opinion it should make at least some financial sense to you to accept the scholarship depending on the cost of the school you plan on attending.

I think that it is safe to assume that the HPSP is a fairly good value for years 0-5 post graduation if you plan on attending a school that isn't in Canada or Texas, or isn't a CHEAP in state school.

Once you have accepted a scholarship, graduated dental school and begun work as a military dentist a new decision will arise that I believe is an even harder one to make. Whether or not to leave the military at 4-5 years. Awesome, you are debt free! Now what? Do you take the carrots that the military dangles as incentives such as multi year retention bonus, specialty training, or an assignment in Europe (I got lucky and got this one right after my 1 yr AEGD training)?

In my opinion the more valuable information for a future/current military dentist would be to determine the value of a job as a military dentist for years 5-25. This would allow long term projection to determine at what point the military no longer makes financial sense.

Also, it would be nice to have a comparable spreadsheet for private practice for 25 years (a good guess lifetime working length as a dentist). Maybe this spreadsheet could include the cost of: malpractice insurance, disability, private health insurance....etc. You could even factor in 1-5 years as an associate and then a practice purchase at some point. The purchase of a practice would affect your yearly income for the better but for a time, it would also increase your debt (small business loan).

Many assumptions would be needed to calculate this stuff. I have obviously left a lot of financial factors to be considered and would love to hear anyone's opinion on the matter.

Hope this all makes sense.