Financial debt question

[nshah613]

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I'm a predent waiting to hear back from schools. I have a question and I keep thinking i'm the only one in this situation. Looking at costs of most schools, 4 years in dental school will cost on average $200,000. I will not be able to contribute at all to cost of the school, so I'm relying pretty much on all loans. I've filled out my fafsa already. After graduating from dental school, dental education loans + undergrad loans + interest will add additional 70-100,000. So my total debt after I'm done with dental school will be around 300-350,000. Is there anyone in this situation? My question goes out to other predents, current associates or dentists with their own practice. How did you/do you deal with all the debt? I'm thinking it'll be extremely difficult for a guy like me to get a mortgage for buying a practice even after working as an associate for 2-3 years. I'm definitely excited about going to dental school, and I think it's the best profession in the world for me. I can't see myself doing anything else, but at the same time I'm just worried about the debt.

Sorry if i bored anyone with such a long question

 

[crazy_sherm]

Many of us are in similar situations. You deal with it by knowing that this will be one of the best investments you'll ever make in your life and that it will allow you the means to eventually pay it off. If you're really worried about it, talk to a financial advisor and they'll probably draw up some plan for you that will make a lot of sense in the long run.

A lot of people buy houses with earning potentials much lower than yours will be, and their loans are at a higher interest rate than student loans, yet they manage. Even with $350k in the hole, banks will still throw their money at you when you decide to open your own practice, as long as you still have a DDS/DMD at the end of your name.

 

[nshah613]

That's true. I definitely look at it as an investment. I just wanted to see if there were people in my situation.

 

[ItsGavinC]

I'm in a similar situation as well. It'll take time to pay it off, but it's doable.

 

[howui3]

Unless you are from Mississippi and go to the state school where the tuition is about 6,000 a year, you will have a lot of debt. More if you go to a private school, especially NYU and less if you go to a public school. But never the less you will a lot of debt.

Here is a something I heard from my Arizona interview: dentists have the lowest default rate, lower than MDs. The reason: we can start to work right away while all the med students need residency, etc. Plus if we want to specialize we can moonlight while in residecy and make money.

Don't worry about the loan amount at this point. After graduation from dent school or specialty program you will be making enough money to start paying off your loan.

 

[DIRTIE]

start playing powerball or something like that, you might get lucky.

I do think that being in debt say 100-200K and then being in major debt like you will be 300+ is a big difference and will reflect in where you will go and practice. You will need to go to a city or an area that in general reimburses a lot more. But it is do able, but it really sucks for us as opposed to a few years ago because that 200 or 300K will not shrink as fast as it would have if you would have graduated a few years ago since the interest rate is being jacked up, 6.8 by the summer is the predicted percent.

 

[nshah613]

What do the rest of you think?

 

[jpollei]

What do the rest of you think?

Crunching numbers all day might lead you to overlook another aspect that should be considered. And I realize what I'm about to say is often debated on SDN and may elicit differing feedback, but here's my two cents:

Live tight while in school and avoid any unnecessary extras...the new car, nice vacations during breaks, a sweet place to live, eating out all the time. Keep it simple--you'll thank yourself later when you have less debt to repay. You may not be able to affect what the school charges for tuition/fees, but you can determine what you pay for rent, etc.

 

[leia05]

I'm definitely excited about going to dental school, and I think it's the best profession in the world for me. I can't see myself doing anything else, but at the same time I'm just worried about the debt.

NSHAH, I'm glad SO you asked this question because it saved me the trouble of introducing it! :-D I'll be going to Mississippi, which someone mentioned as being really cheap compared to other schools.... my overall debt including living expenses should run me somewhere around $85-95K for all 4 years. I know that seems like a drop in the ocean compared to the debt of a lot of you other guys out there, but it still looms heavily over my head. I'm going to be going from debt free right now to that much in the hole? It's a little intimidating, even though I know dentists make a good living-and like you, I can't see myself in another profession. Right now I'm entertaining the idea of the Navy's HSCP to pay for school plus give me a guaranteed job when I get out of school. What routes are other people going-and why-, because I'd like to know what all my options are before I "sign on the dotted line" Thanks! 😀

 

[mdub]

my overall debt including living expenses should run me somewhere around $85-95K for all 4 years

I don't understand wh so many people around here guess about things like how much they'll have to pay. There are answers. And those answers are easy to find.

http://www.bankrate.com/brm/popcalc2.asp

$95,000 @ 6.5% over 20 years is $708.29/month. That's $8499.48/year. That's about $13,000 in pre-tax terms.

 

[dentalman]

That is the cheapest you will ever get for school. How about this un-original option: Making loan payments until it is paid off and having control of your life. Although I am also in full support of the navy so go for it.

 

[mdub]

Making loan payments until it is paid off and having control of your life.

There are downsides to paying off your loans fast when there are investment options with (real) rates of return higher than your interest rate. If you have loans at 6.5% and you're getting 11% from the stock market (which is about the historical post-War average), you'll be losing money relative to what you otherwise could have had. Also, if inflation goes higher than than your interest rate, the longer you wait, the less debt you'll have in real terms.

Certainly, the psychological sense of being unencumbered by debt is worth something. Having the option to take risks without having as many fixed costs is also worth something.

I'm just saying that it's not universally true that paying off debt faster is better. For instance, I'm paying off my 2.875% student loans as slow as possible. Inflation is higher than that. In a sense, inflation is paying part of my loan for me.

 

[leia05]

So basically, most everyone is just getting loans to survive? Which ones would y'all recommend based on your own experiences (ease of getting the loan, interest rate, etc)?

 

[mdub]

So basically, most everyone is just getting loans to survive? Which ones would y'all recommend based on your own experiences (ease of getting the loan, interest rate, etc)?

Most professional school students, not just dental students, get loans for living expenses. It's certainly the norm, not the exception.

The student loan market is competitive. Most of the lenders are pretty similar in terms of rates and service. Get qualified at several lenders and pick the best one. Don't pick a lender and then take what they give you.