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I'm not stupid but I figured that the general trend is that the Army wants you to be in for 1, 2 maybe 3 years before giving you a slot into ortho, perio or endo. That's not to say its impossible to get in straight from dental school. It just seems like current army dentists that like the army will choose to go to residency training to eat up time and expand their skills.
The Army knows that if you are given an Ortho slot after of school, you will have your papers in for resignation when your payback is over. Giving the residency slot to you after 2 or 3 years ensures that the army gets to use you for those extra years without having to pay an outside contractor way more money.
Edit: If the Army wanted more retention with itis dentist and physicians, then all healthcare professionals should be paid able a min of $80k base salary + bah/benefits etc.
Addressing the first couple paragraphs: Like most schools/organizations - the Army compares all applicants. The selection process focuses not only on academics, but also the other things important as an Army officer - fitness, motivation, performance, etc... Let's look at Ortho as an example - if you have 15 people competing for 3 slots - 5 from dental school - 10 that have been in between 1-8 yrs (this is an example). Who do you think is going to stand out as the more "well-rounded" candidate? The individual that has been in several years, had great recommendations from current officers, or an unknown new officer coming straight out of school? This is not to say an individual coming out of school will never be selected, but the odds are in favor of those who have the strongest resume - new dental graduate or seasoned dental officer. Some specialties don't have as many individuals that apply - therefore chances of getting selected for anyone applying is better.
Starting pay is close to $80,000 and it begins to jump very rapidly from years 2-4 (3 different pay jumps during that time). Bonuses and pay benefits are continually being modified and improved.