Harsh Reality of Dental School Debt

[spearmint]

As the realization that I'll be owing upwards of $350K for dental school sinks in, I've been giving myself an ulcer just thinking about my life of indebtedness (esp if I want to open my own practice, which is another $600K or so...that's almost $1 MILLION!!).

I've been online trying to find experiences from recent grads to reassure myself that most recently anointed dentists have no problems paying off their debts of this magnitude. Unfortunately, I've found more discouraging stories of struggling grads. The typical story I hear on forums and from personal acquaintances is that many scramble to find a job with different offices/clinics/mills (usually as a contractor 1 day/wk). As a contractor (even if the minimum pay/day is $450), they have to pay for their own employment taxes, social security, health insurance benefits, malpractice benefits, etc on their own dime. So, their actual take home is much less. Many struggle to pay their student loans. I know there's the Income Based Repayment program, but you'll end up paying more on the lifetime of that loan due to interest adding up. I love dentistry, but I'm wondering if it's worth it to be in this much debt. It seems like most recent grads are working just to pay off debt.

Even established dentist whom I've talked to think I'm absolutely nuts to be taking on so much debt. They've graduated 15-20 years ago when the tuition of dental schools were a fraction of what it is now. They said they would never go into dentistry today if they had to pay as much as we do now. They are doing okay financially only because their dental school debts were not as high and their interest rates was lower too. If they had that much debt to pay off, they said they would be struggling right now as dentistry isn't as lucrative as it once was.

Here is a thread from DentalTown about the huge debt that some recent grad or soon to be grad started. Most dental school recruiters usually say that you'll have no problem with the debt, that you'll make sooo much money blah blah (Of course, they'll say this to get students to go and pay...dental schools are businesses after all). I thought it was an interesting thread that made me more realistic about what kind of life I'm likely to get into. The thread is from 2008, but I think it still holds true today. It has certainly made me get my head out of the clouds and think hard about the reality of it all. I guess I'll have to be (or learn to be) okay with living like a poor undergrad for a good chunk of my life.

http://www.towniecentral.com/MessageBoard/thread.aspx?s=2&f=214&t=106176&pg=1

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[Chemboy23]

As the realization that I'll be owing upwards of $350K for dental school sinks in, I've been giving myself an ulcer just thinking about my life of indebtedness (esp if I want to open my own practice, which is another $600K or so...that's almost $1 MILLION!!).

I've been online trying to find experiences from recent grads to reassure myself that most recently anointed dentists have no problems paying off their debts of this magnitude. Unfortunately, I've found more discouraging stories of struggling grads. The typical story I hear on forums and from personal acquaintances is that many scramble to find a job with different offices/clinics/mills (usually as a contractor 1 day/wk). As a contractor (even if the minimum pay/day is $450), they have to pay for their own employment taxes, social security, health insurance benefits, malpractice benefits, etc on their own dime. So, their actual take home is much less. Many struggle to pay their student loans. I know there's the Income Based Repayment program, but you'll end up paying more on the lifetime of that loan due to interest adding up. I love dentistry, but I'm wondering if it's worth it to be in this much debt. It seems like most recent grads are working just to pay off debt.

Even established dentist whom I've talked to think I'm absolutely nuts to be taking on so much debt. They've graduated 15-20 years ago when the tuition of dental schools were a fraction of what it is now. They said they would never go into dentistry today if they had to pay as much as we do now. They are doing okay financially only because their dental school debts were not as high and their interest rates was lower too. If they had that much debt to pay off, they said they would be struggling right now as dentistry isn't as lucrative as it once was.

Here is a thread from DentalTown about the huge debt that some recent grad or soon to be grad started. Most dental school recruiters usually say that you'll have no problem with the debt, that you'll make sooo much money blah blah (Of course, they'll say this to get students to go and pay...dental schools are businesses after all). I thought it was an interesting thread that made me more realistic about what kind of life I'm likely to get into. The thread is from 2008, but I think it still holds true today. It has certainly made me get my head out of the clouds and think hard about the reality of it all. I guess I'll have to be (or learn to be) okay with living like a poor undergrad for a good chunk of my life.

http://www.towniecentral.com/MessageBoard/thread.aspx?s=2&f=214&t=106176&pg=1

While all of what you say is most definitely reason for concern...you'll be able to repay it. A public health dentist makes about 150k per year and gets ~25k per year paid towards his/her tuition repayment. What you need to do is work as a public health dentist for about 4 years...allowing you to get your feet on the ground and a way to pay off student loans if worse comes to worse. You can live off of about 35k per year while paying back as much money on your loans as possible. That's 140k total toward that principle. That times 4 = 560k. Use the rest for interest, and putting some down on a practice. The ASDOH dental school dean told me that number on the salary of a public dentist...so before everyone starts attacking me on an inflated number...go attack him. I certainly didn't think that could be true...but, IT IS! So, don't worry yourself to death...and if you're honestly doing dentistry for the love of it, it's totally worth it. No amount of money can buy happiness. Best of luck to you!

 

[ddsjc2014]

As the realization that I'll be owing upwards of $350K for dental school sinks in, I've been giving myself an ulcer just thinking about my life of indebtedness (esp if I want to open my own practice, which is another $600K or so...that's almost $1 MILLION!!).

I've been online trying to find experiences from recent grads to reassure myself that most recently anointed dentists have no problems paying off their debts of this magnitude. Unfortunately, I've found more discouraging stories of struggling grads. The typical story I hear on forums and from personal acquaintances is that many scramble to find a job with different offices/clinics/mills (usually as a contractor 1 day/wk). As a contractor (even if the minimum pay/day is $450), they have to pay for their own employment taxes, social security, health insurance benefits, malpractice benefits, etc on their own dime. So, their actual take home is much less. Many struggle to pay their student loans. I know there's the Income Based Repayment program, but you'll end up paying more on the lifetime of that loan due to interest adding up. I love dentistry, but I'm wondering if it's worth it to be in this much debt. It seems like most recent grads are working just to pay off debt.

Even established dentist whom I've talked to think I'm absolutely nuts to be taking on so much debt. They've graduated 15-20 years ago when the tuition of dental schools were a fraction of what it is now. They said they would never go into dentistry today if they had to pay as much as we do now. They are doing okay financially only because their dental school debts were not as high and their interest rates was lower too. If they had that much debt to pay off, they said they would be struggling right now as dentistry isn't as lucrative as it once was.

Here is a thread from DentalTown about the huge debt that some recent grad or soon to be grad started. Most dental school recruiters usually say that you'll have no problem with the debt, that you'll make sooo much money blah blah (Of course, they'll say this to get students to go and pay...dental schools are businesses after all). I thought it was an interesting thread that made me more realistic about what kind of life I'm likely to get into. The thread is from 2008, but I think it still holds true today. It has certainly made me get my head out of the clouds and think hard about the reality of it all. I guess I'll have to be (or learn to be) okay with living like a poor undergrad for a good chunk of my life.

http://www.towniecentral.com/MessageBoard/thread.aspx?s=2&f=214&t=106176&pg=1

Simple solution = Don't go to dental school and get a job somewhere else.
If you want to open up any kind of your own business, it will cost at least 300k to 400k. After that you are not sure that business will do well or not.
But dentistry, its a licensed professional job thus you can at least get a job somewhere.

 

[coolslugs]

While all of what you say is most definitely reason for concern...you'll be able to repay it. A public health dentist makes about 150k per year and gets ~25k per year paid towards his/her tuition repayment. What you need to do is work as a public health dentist for about 4 years...allowing you to get your feet on the ground and a way to pay off student loans if worse comes to worse. You can live off of about 35k per year while paying back as much money on your loans as possible. That's 140k total toward that principle. That times 4 = 560k. Use the rest for interest, and putting some down on a practice. The ASDOH dental school dean told me that number on the salary of a public dentist...so before everyone starts attacking me on an inflated number...go attack him. I certainly didn't think that could be true...but, IT IS! So, don't worry yourself to death...and if you're honestly doing dentistry for the love of it, it's totally worth it. No amount of money can buy happiness. Best of luck to you!

That number is inflated. I do not know where a public health dentist could be paid 150K + 25K in loan repayment straight out of dental school...

 

[Chemboy23]

That number is inflated. I do not know where a public health dentist could be paid 150K + 25K in loan repayment straight out of dental school...

Yeah, that's what I thought too...but I really didn't consider myself to be in the position to argue with the dean of a dental school, a career (dentistry) which he has been in for about 30 years or so. LOL

 

[Chemboy23]

Also he told us "don't worry at all about money" LOL...yeah....ok??? People are about to go into 350k+ debt and "don't worry about it..." hahaha!

 

[Machiavelliansm]

Also he told us "don't worry at all about money" LOL...yeah....ok??? People are about to go into 350k+ debt and "don't worry about it..." hahaha!

Are you really picking LLU over ASDOH and Mississipi?

 

[321931]

Are you really picking LLU over ASDOH and Mississipi?

Mississipi is dirt cheap. Why would you choose LLU over it?

 

[Osity]

The OP's source comes from a blog/message board, in other words, an extremely reliable source of information. I hope you sense the sarcasm.

Here is the reality: If you graduate with $300k of debt, your repayment options are:

10 Years: $3,450/month (approximately $115k in interest with 6.8% interest rate)

25 Years: $2,080/month (approximately $320k in interest)

An average dentist coming out of school can make $150k (gross) working as an associate. If you are taxed at 40%, that would leave you with $90k of disposable income, or $7,500/month.

If you pay $3,500/mo in loans, $2,500/mo in a mortgage, you still have $1,500 left for whatever else you need to pay. If you spend wisely, invest, and save, you will be just fine.

There aren't many dentists that are getting food stamps because they can't find work. You just need to be smart with you money, pay back what you owe, and you will be in great shape.

After you pay down you student loans for a few years, you invest in a practice, which enables you to earn far more than you can as an associate. That allows you to pay off your business loans faster.

Dental school and the dental profession are an investment. That is the way you look at it. You can graduate with a BA/BS with little or no debt and make $40k a year starting, or you can invest, have debt, and have a much higher initial salary and huge potential down the road. Plus, you eventually make your own hours, go on vacation when you want, etc, but that comes after you pay back what you owe and establish yourself.

 

[Jackson-Ave-Dental]

The OP's source comes from a blog/message board, in other words, an extremely reliable source of information. I hope you sense the sarcasm.

Here is the reality: If you graduate with $300k of debt, your repayment options are:

10 Years: $3,450/month (approximately $115k in interest with 6.8% interest rate)

25 Years: $2,080/month (approximately $320k in interest)

An average dentist coming out of school can make $150k (gross) working as an associate. If you are taxed at 40%, that would leave you with $90k of disposable income, or $7,500/month.

If you pay $3,500/mo in loans, $2,500/mo in a mortgage, you still have $2,500 left for whatever else you need to pay. If you spend wisely, invest, and save, you will be just fine.

There aren't many dentists that are getting food stamps because they can't find work. You just need to be smart with you money, pay back what you owe, and you will be in great shape.

After you pay down you student loans for a few years, you invest in a practice, which enables you to earn far more than you can as an associate. That allows you to pay off your business loans faster.

Dental school and the dental profession are an investment. That is the way you look at it. You can graduate with a BA/BS with little or no debt and make $40k a year starting, or you can invest, have debt, and have a much higher initial salary and huge potential down the road. Plus, you eventually make your own hours, go on vacation when you want, etc, but that comes after you pay back what you owe and establish yourself.

No one should have any problems paying off their loans... even using Osity's numbers... paying back 3,450$ in loans per month still leaves you with about 4,000$ a month to play around with.

$4000/month?! That equates to ~$48,000/year... Do you have any idea how many people live with $8/hour jobs for the rest of their life? No offense but with how everyone in my family lives... I would personally do a more aggressive repayment plan. I don't need $4000/month to get by. I can eat cup noodles and pasta for the next few years after I graduate if I have to if it'll mean that I'll be debt free sooner.

$2,000/month is more than enough to get by, besides you should also factor in a spouse if he/she will be existent at that time lol.

7,500 - 2000 = $5,500 in loan repayment per month...
Repaying $66,000/year
Even with a 6.8% interest rate and we can even assume that there will be 115k total interest too...

Can repay this in roughly 6 years

 

[Chemboy23]

Mississipi is dirt cheap. Why would you choose LLU over it?

I'm not necessarily choosing LLU over Mississippi...we have kids that are here in AZ...so Loma would be closer for us. I talked to the guy in admissions at ASDOH and he told us that I probably wouldn't get accepted here. So, that's why. It's not that I do not want to go to the MS dental school and save money, but I have obligations/responsibilities holding me out west. To me, having the support/company of my wife by my side for what could most likely be the most stressful times of my life is very important. We're actually still waiting to hear back from MS on their decision, but I think I'm good to go there. If we get in there (in MS), we will most likely move there and go to school. Like you all have said, it would be a very bad financial decision to do anything else. But, we have to see if we're in there first.

If we choose MS, we will just save some of the money to fly the kids out to visit. I just hope we get in there!

 

[eringer]

Look, you will definitely be in a lot of debt after dental school, however you will also practice for around 40 or 50 years. Ya, debt is a big deal, but not when you consider how long you have to work it all out

 

[krnkimsung]

Since when the dentist fresh out of DS makes 150K? that's one hell of skill and productivity. My friend who graduated from NYU recently couldn't get enough hours to barely hit 100K a year (Gross). $2500 to play with ... a month? That might sound a lot to some people, but my first job out of college paid me approx $3900 per month (1970 per paycheck) after tax (dental/medical benefit included)

I don't think $2500 per month after getting your Doctoral degree is that much satisfying amount (after going through the hell of 4 years)

The OP's source comes from a blog/message board, in other words, an extremely reliable source of information. I hope you sense the sarcasm.

Here is the reality: If you graduate with $300k of debt, your repayment options are:

10 Years: $3,450/month (approximately $115k in interest with 6.8% interest rate)

25 Years: $2,080/month (approximately $320k in interest)

An average dentist coming out of school can make $150k (gross) working as an associate. If you are taxed at 40%, that would leave you with $90k of disposable income, or $7,500/month.

If you pay $3,500/mo in loans, $2,500/mo in a mortgage, you still have $2,500 left for whatever else you need to pay. If you spend wisely, invest, and save, you will be just fine.

There aren't many dentists that are getting food stamps because they can't find work. You just need to be smart with you money, pay back what you owe, and you will be in great shape.

After you pay down you student loans for a few years, you invest in a practice, which enables you to earn far more than you can as an associate. That allows you to pay off your business loans faster.

Dental school and the dental profession are an investment. That is the way you look at it. You can graduate with a BA/BS with little or no debt and make $40k a year starting, or you can invest, have debt, and have a much higher initial salary and huge potential down the road. Plus, you eventually make your own hours, go on vacation when you want, etc, but that comes after you pay back what you owe and establish yourself.

 

[lnngu]

Btw... is my math way off or does $7,500 - 3,500 - 2,500 = 1.5k?

 

[Chemboy23]

btw... Is my math way off or does $7,500 - 3,500 - 2,500 = 1.5k?

lol

 

[Osity]

Btw... is my math way off or does $7,500 - 3,500 - 2,500 = 1.5k?

Lol yep, just changed it.

 

[Osity]

Since when the dentist fresh out of DS makes 150K? that's one hell of skill and productivity. My friend who graduated from NYU recently couldn't get enough hours to barely hit 100K a year (Gross). $2500 to play with ... a month? That might sound a lot to some people, but my first job out of college paid me approx $3900 per month (1970 per paycheck) after tax (dental/medical benefit included)

I don't think $2500 per month after getting your Doctoral degree is that much satisfying amount (after going through the hell of 4 years)

If your job is so awesome, go do it and don't post on here.

Many people can make $150k out of school. Maybe your buddy wasn't that great. It also depends on where you live and what type of an agreement you with the dentist who owns the practice (ex. if you make 25% of what you produce, which is common), as well as how good the practice is. Two dentists that I have shadowed make $200k+, and they're less than five years out of school.

Your boy couldn't get enough hours? Dentists aren't paid hourly, they're paid by what they produce, unless they're working for some type of corporate dental company (and if he's doing that, I don't know why he's got into dentistry).

 

[dentalWorks]

As the realization that I'll be owing upwards of $350K for dental school sinks in, I've been giving myself an ulcer just thinking about my life of indebtedness (esp if I want to open my own practice, which is another $600K or so...that's almost $1 MILLION!!).

I've been online trying to find experiences from recent grads to reassure myself that most recently anointed dentists have no problems paying off their debts of this magnitude. Unfortunately, I've found more discouraging stories of struggling grads. The typical story I hear on forums and from personal acquaintances is that many scramble to find a job with different offices/clinics/mills (usually as a contractor 1 day/wk). As a contractor (even if the minimum pay/day is $450), they have to pay for their own employment taxes, social security, health insurance benefits, malpractice benefits, etc on their own dime. So, their actual take home is much less. Many struggle to pay their student loans. I know there's the Income Based Repayment program, but you'll end up paying more on the lifetime of that loan due to interest adding up. I love dentistry, but I'm wondering if it's worth it to be in this much debt. It seems like most recent grads are working just to pay off debt.

Even established dentist whom I've talked to think I'm absolutely nuts to be taking on so much debt. They've graduated 15-20 years ago when the tuition of dental schools were a fraction of what it is now. They said they would never go into dentistry today if they had to pay as much as we do now. They are doing okay financially only because their dental school debts were not as high and their interest rates was lower too. If they had that much debt to pay off, they said they would be struggling right now as dentistry isn't as lucrative as it once was.

Here is a thread from DentalTown about the huge debt that some recent grad or soon to be grad started. Most dental school recruiters usually say that you'll have no problem with the debt, that you'll make sooo much money blah blah (Of course, they'll say this to get students to go and pay...dental schools are businesses after all). I thought it was an interesting thread that made me more realistic about what kind of life I'm likely to get into. The thread is from 2008, but I think it still holds true today. It has certainly made me get my head out of the clouds and think hard about the reality of it all. I guess I'll have to be (or learn to be) okay with living like a poor undergrad for a good chunk of my life.

http://www.towniecentral.com/MessageBoard/thread.aspx?s=2&f=214&t=106176&pg=1

If you were to graduate with DDS/DMD, you "should" be able to pull off close to 100k per year your initial years as an associate. Last I checked, 350k debt and 100k income isn't a bad ratio at all.... sure you ain't gonna be sitting in a brand new Corvette Z06 (75k, 7.0L V8 with roaring 500 horse p.... Can you tell I want one hahah), but you will be able to pay off that debt "eventually"

I am no where near becoming a dentist, but I think the trick to living comfortably as a dentist is to establish yourself ASAP after dental school. By that I mean, get out, find some associate type work, work as much and as hard as you can to improve your hand, bussines skills, and most importantly your confidence.... Then when the time is right, you try to establish your own practice (either solo or partnership)...... I know it sounds like a Cinderella story, but if you talk to a few established and high earning dentists, they'll mostly tell you a similar story.

 

[armorshell]

The problem with these scenarios everyone puts up is that all anyone seems to care about is how you do the year after you graduate.

"I'll only be making 120k/year with $3000 a month in loans?!?!"

Get real people. Think about the way you'll spend most of your life, in an average year. If you pay your $300k in loans off in 10 years, and have a 30 year career, with an average salary of $215K (ADA 2009 numbers), assume 40% taxes, then on average you're clearing $115,000/year in 2011 dollars in your pocket every year.

You have to play the long game with careers. Realistically you'll have some crappy years right out of school but statistically, you're banking almost $10,000 a month post-tax with your DDS.

 

[Charmm]

Why not pay off the debt asap after graduation? I think this would be a better idea rather than buying a 100 k car!

Once you paid off your loan, things will fall into places easily.

 

[notin]

dentistry probably has a better risk of ruin:financial reward ratio than any other profession. if you can't handle this, you better not do anything the least bit ambitious for the rest of your life, just go pick out your cubicle now.

^^ it's been discussed on here in depth before whether you should pay off your debt asap or pay it off over time. i think both have their upsides.

 

[persenmi]

Have you ever heard of the Weimar Republic or Zimbabwe currency crisis? The extremely short story is that their idiotic governments (like ours) printed money to solve their problems which created more serious problems like hyperinflation and the ultimate destruction of the currency. The famous Zimbabwe $1,000,000,000,000 note (its so easy to add zeros on paper!) and the photo of the man with a wheelbarrow full of deutchmarks to buy a loaf of bread are good examples of how quickly paper money can lose its value in the right environment. And I have news for you, we live in that environment. Why do you think the cost of a dental education was $20k in the 70's but is for some reason $350k now?! Will it be $600k in 10 years? $1 million by 2030? This is inflation! Recently the Fed agreed to buy $6,000,000,000 in treasury bonds by June 2011 and will undoubtedly buy more after that. My point is, $400k might not buy a loaf of bread in 20 years if inflation continues at the rate it is now. In all likeliness, the rate of inflation will steadily increase until it explodes (picture the graph of an exponential function) at which point, infinity dollars won't buy a loaf of bread and the currency will be dead. The "wealth" of paper dollars will all be transferred to gold and silver (real, constitutional money). If you buy gold and silver now, you will be able to pay off your dental education in one day when gold/silver revalue .

 

[promolion]

I'm not necessarily choosing LLU over Mississippi...we have kids that are here in AZ...so Loma would be closer for us. I talked to the guy in admissions at ASDOH and he told us that I probably wouldn't get accepted here. So, that's why. It's not that I do not want to go to the MS dental school and save money, but I have obligations/responsibilities holding me out west. To me, having the support/company of my wife by my side for what could most likely be the most stressful times of my life is very important. We're actually still waiting to hear back from MS on their decision, but I think I'm good to go there. If we get in there (in MS), we will most likely move there and go to school. Like you all have said, it would be a very bad financial decision to do anything else. But, we have to see if we're in there first.

If we choose MS, we will just save some of the money to fly the kids out to visit. I just hope we get in there!

They actually told you that you won't get accepted? THat is very weird.

 

[UCLAzy]

Have you ever heard of the Weimar Republic or Zimbabwe currency crisis? The extremely short story is that their idiotic governments (like ours) printed money to solve their problems which created more serious problems like hyperinflation and the ultimate destruction of the currency. The famous Zimbabwe $1,000,000,000,000 note (its so easy to add zeros on paper!) and the photo of the man with a wheelbarrow full of deutchmarks to buy a loaf of bread are good examples of how quickly paper money can lose its value in the right environment. And I have news for you, we live in that environment. Why do you think the cost of a dental education was $20k in the 70's but is for some reason $350k now?! Will it be $600k in 10 years? $1 million by 2030? This is inflation! Recently the Fed agreed to buy $6,000,000,000 in treasury bonds by June 2011 and will undoubtedly buy more after that. My point is, $400k might not buy a loaf of bread in 20 years if inflation continues at the rate it is now. In all likeliness, the rate of inflation will steadily increase until it explodes (picture the graph of an exponential function) at which point, infinity dollars won't buy a loaf of bread and the currency will be dead. The "wealth" of paper dollars will all be transferred to gold and silver (real, constitutional money). If you buy gold and silver now, you will be able to pay off your dental education in one day when gold/silver revalue .

lol. dont forget your tinfoil hat tomorrow when you go to school or work

 

[cougarpride]

ouch.....i can feel your pain of being in debt but there shouldn't be a problem of paying your debt off IF you spend your money wisely...let's not forget that if you decide to get married or whatever...your spouse has income too


on another note...god bless texas with their cheap in-state tuition

 

[AndrewNJ]

lol. dont forget your tinfoil hat tomorrow when you go to school or work

Its not as outlandish a scenario as you think. With the way our government is spending and promoting consumer spending, the dollar will almost certainly collapse eventually. If you ran a household budget the way the government ran its budget, you would go bankrupt. So why would the end result be different for the government?

 

[kcin]

its not as outlandish a scenario as you think. With the way our government is spending and promoting consumer spending, the dollar will almost certainly collapse eventually. If you ran a household budget the way the government ran its budget, you would go bankrupt. So why would the end result be different for the government?

Liberalism is magic, bro. Don't be so heartless.

 

[Osity]

While we don't want hyperinflation like in Zimbabwe, we do want normal inflation, especially as students that will be acquiring a large debt in the next few years. The reason why is that inflation actually erodes our debt. If prices inflate we'll be making more money to pay down (because prices rise for our services) our fixed debt with a fixed interest rate.

 

[cbizzle7994]

Its not as outlandish a scenario as you think. With the way our government is spending and promoting consumer spending, the dollar will almost certainly collapse eventually. If you ran a household budget the way the government ran its budget, you would go bankrupt. So why would the end result be different for the government?

The U.S. will never go into hyperinflation. Hyperinflation is usually around 5-10% inflation per DAY. Even if the government gets an increasing need for money, we will just keep borrowing from other countries. And while that sounds really bad, the risk is quite minimal. For example, yea China holds a ton of the U.S.'s debt, but we are also their number one customer when it comes to their exports. If they ever tried to recall that debt and "bankrupt" the U.S., they would be crashing their own economy at the same time. It's a scary thought to keep borrowing, but it's not as high risk as you would think.

But, getting back to the original topic. I'm on the side of pay off your debt as soon as possible. I'll be graduating with 250K in loans or so and I plan to try and pay it off in 4-5 years. Make those extra payments when you can. Making extra payments is like investing in a CD that is paying out 6.9% per year. That's a damn good deal and it's 100% guaranteed.

 

[Osity]

I completely agree with cbizzle, hyperinflation is extremely unlikely, because we are the #1 lender to China and a ton of other countries.

I'll also be at about $250k, and I'll be doing everything I can to get that paid back in 5 years. The difference in interest over 5 years on $250k is about $50k, a nice chunk of money to do whatever you want with.

 

[ScavangerPro]

Have you ever heard of the Weimar Republic or Zimbabwe currency crisis? The extremely short story is that their idiotic governments (like ours) printed money to solve their problems which created more serious problems like hyperinflation and the ultimate destruction of the currency. The famous Zimbabwe $1,000,000,000,000 note (its so easy to add zeros on paper!) and the photo of the man with a wheelbarrow full of deutchmarks to buy a loaf of bread are good examples of how quickly paper money can lose its value in the right environment. And I have news for you, we live in that environment. Why do you think the cost of a dental education was $20k in the 70's but is for some reason $350k now?! Will it be $600k in 10 years? $1 million by 2030? This is inflation! Recently the Fed agreed to buy $6,000,000,000 in treasury bonds by June 2011 and will undoubtedly buy more after that. My point is, $400k might not buy a loaf of bread in 20 years if inflation continues at the rate it is now. In all likeliness, the rate of inflation will steadily increase until it explodes (picture the graph of an exponential function) at which point, infinity dollars won't buy a loaf of bread and the currency will be dead. The "wealth" of paper dollars will all be transferred to gold and silver (real, constitutional money). If you buy gold and silver now, you will be able to pay off your dental education in one day when gold/silver revalue .

Hyperbole much!?!? I dont think its fair to compare our country to that of Zimbabwe and Weimar republic. Although it is true that cost of dental education is skyrocketing, but the avg. salary has also been going up (granted not at the same rate as tuition). Also something to consider is the expense that schools have today compared to 20 years ago, i.e. the cost of setting up a sim-lab and other renovations to keep up with new technology

 

[Chemboy23]

They actually told you that you won't get accepted? THat is very weird.

Well, he called me one day and said "I want to go ahead and let you know something on your profile, since you emailed the admissions lady and needed to know something soon. After looking at everything and how your interview went, you were placed on the wait list (lower end) and with the class being as full as it is at the moment, I can tell you with about 99% certainty that your wait list status will not turn into an accept. We here at ASDOH wish you nothing but the best in your dental education and if any other information comes available, we will let you know ASAP."

 

[Chemboy23]

While we don't want hyperinflation like in Zimbabwe, we do want normal inflation, especially as students that will be acquiring a large debt in the next few years. The reason why is that inflation actually erodes our debt. If prices inflate we'll be making more money to pay down (because prices rise for our services) our fixed debt with a fixed interest rate.

I so agree with this. That's the one thing I was scared about, getting out of school owing a ton of money...and if the inflation problem seems to get fixed rather quickly, we will owe lots of money and won't be able to charge much for our services. For students entering dental school right now, inflation is actually working to our advantage. Good catch

 

[schen140]

I completely agree with cbizzle, hyperinflation is extremely unlikely, because we are the #1 lender to China and a ton of other countries.

I'll also be at about $250k, and I'll be doing everything I can to get that paid back in 5 years. The difference in interest over 5 years on $250k is about $50k, a nice chunk of money to do whatever you want with.

you might be forgetting about the debt that comes with purchasing a practice. even if you spend the first 5 years post-graduation paying off tuition loans, once you begin private practice you'll have another 500k-700k of debt on your hands. if you retain the same mentality of delayed gratification, it would take you another 5 years (since you'd have a higher salary now) to pay this off as fast as you can. that means in total, you would be working endlessly for 10 years while allocating all your earnings to your loan repayment

taking this into the picture, you can understand why some people would rather just spread out the repayment and enjoy life in the process. even if it's awesome to have no debt for the last 20 years of your career, dedicating 10 disciplined and unenjoyable years to get the debt out of the way is too depressing in my opinion

 

[cbizzle7994]

you might be forgetting about the debt that comes with purchasing a practice. even if you spend the first 5 years post-graduation paying off tuition loans, once you begin private practice you'll have another 500k-700k of debt on your hands. if you retain the same mentality of delayed gratification, it would take you another 5 years (since you'd have a higher salary now) to pay this off as fast as you can. that means in total, you would be working endlessly for 10 years while allocating all your earnings to your loan repayment

taking this into the picture, you can understand why some people would rather just spread out the repayment and enjoy life in the process. even if it's awesome to have no debt for the last 20 years of your career, dedicating 10 disciplined and unenjoyable years to get the debt out of the way is too depressing in my opinion

First off, I'm no expert but I'm pretty sure that you can get a practice for a lot less than 500-700k. Secondly, while some people may think it "unenjoyable" to live off of 35k a year or so after taxes and loan repayment, the vast majority of people in this country do so and seem to have no problem.

In the end, it's really just a personal choice. Do you want to pay more to have things you want now or pay less and have those same things later. Personally, I live comfortably for ~$20,000 a year now and could easily do it after graduating from dental school. I recognize that not all circumstances are the same and some people have obligations that require them to spend more per year, but I'm not in that situation. I like to look at things from an overall perspective and take the path that is going to best benefit me in the long run and that is paying off my loans as fast as possible. Not everyone's priorities are the same and in the end each person has to decide what's best for his or herself

 

[Osity]

you might be forgetting about the debt that comes with purchasing a practice. even if you spend the first 5 years post-graduation paying off tuition loans, once you begin private practice you'll have another 500k-700k of debt on your hands. if you retain the same mentality of delayed gratification, it would take you another 5 years (since you'd have a higher salary now) to pay this off as fast as you can. that means in total, you would be working endlessly for 10 years while allocating all your earnings to your loan repayment

taking this into the picture, you can understand why some people would rather just spread out the repayment and enjoy life in the process. even if it's awesome to have no debt for the last 20 years of your career, dedicating 10 disciplined and unenjoyable years to get the debt out of the way is too depressing in my opinion

It's definitely better to live within your means that pay a million dollars in interest (combined interest between your school/business loans). To me, paying over three times what it costs you to get your degree is depressing. And if you read above, not all of your money goes to loan repayment, you still have a significant portion of disposable income each month. But if you would rather give the government $1 million in interest payments, please be my guest. Maybe that can go towards reducing national debt.

 

[schen140]

i don't think it's realistic to pay off all your debt as soon as possible and still have enough income to say, buy a car, put down a mortgage, raise a child, go on vacations, etc. i haven't done the calculations i'll admit, but my intuition is telling me that line of thinking is too optimistic

so for me it basically comes down to: would i give up 10 years of my life to pay off all the debt, or would i live my life during those 10 years and tolerate the extra interest fees

i would prefer to live in the present, but i know there are people out there who are much better at delayed gratification than me. to each their own. my point is just to help you understand why some people go for the longer repayment option, despite the obvious financial consequences

however, an additional reason is that most people are simply unable to have that much income to pay off the tuition loans in 5 years. 150k as a first year associate is definitely too good to be true. that could be the figure for an ideal location in the country, but you should only treat it as an outlier. the average salary for private practitioners is around 140k, so it doesn't make sense for a first year associate to be making more money than that

 

[cbizzle7994]

i don't think it's realistic to pay off all your debt as soon as possible and still have enough income to say, buy a car, put down a mortgage, raise a child, go on vacations, etc. i haven't done the calculations i'll admit, but my intuition is telling me that line of thinking is too optimistic

so for me it basically comes down to: would i give up 10 years of my life to pay off all the debt, or would i live my life during those 10 years and tolerate the extra interest fees

i would prefer to live in the present, but i know there are people out there who are much better at delayed gratification than me. to each their own. my point is just to help you understand why some people go for the longer repayment option, despite the obvious financial consequences

however, an additional reason is that most people are simply unable to have that much income to pay off the tuition loans in 5 years. 150k as a first year associate is definitely too good to be true. that could be the figure for an ideal location in the country, but you should only treat it as an outlier. the average salary for private practitioners is around 140k, so it doesn't make sense for a first year associate to be making more money than that

False. Or at least not according to the ADA which I believe someone above posted

 

[schen140]

First off, I'm no expert but I'm pretty sure that you can get a practice for a lot less than 500-700k. Secondly, while some people may think it "unenjoyable" to live off of 35k a year or so after taxes and loan repayment, the vast majority of people in this country do so and seem to have no problem.

In the end, it's really just a personal choice. Do you want to pay more to have things you want now or pay less and have those same things later. Personally, I live comfortably for ~$20,000 a year now and could easily do it after graduating from dental school. I recognize that not all circumstances are the same and some people have obligations that require them to spend more per year, but I'm not in that situation. I like to look at things from an overall perspective and take the path that is going to best benefit me in the long run and that is paying off my loans as fast as possible. Not everyone's priorities are the same and in the end each person has to decide what's best for his or herself

i agree that if i could pay off all my loans while taking in 35k for personal income, that would be great. i think that's easier said than done though. maybe someone can perform the calculations? i'm no good with math

 

[Osity]

False. Or at least not according to the ADA which I believe someone above posted

Cbizzle, you're right. The average salary for a general dentist in 2008 was $207k. Salaries are continuing to rise.

Schen- you don't know anything about business or how money works, you admitted it yourself. Go look up facts before you use your 'intuition.' That's the reason why there are numbers and statistics, so you can see what actually goes on, not what you 'feel.'

By the way, you should try reading posts before commenting, so let me break it down for you again.

Average Net Monthly Salary (this means your earnings after taxes and deductions)- $7,500

Student loans repayment (the money you are paying each month-principle plus interest)- $3,000 (assuming a 10-year repayment and that you borrowed $250k).

Mortgage (this is the same as buying a house)- $2,000 (That would be your monthly payment if you bought a $300k house, including insurance and property taxes, approximately)

This next part is called math, specifically subtraction:

$7,500 Net Monthly Income
-$3,000 Student Loan Repayment
-$2,000 Mortgage
$2,500 Left over

That means you can buy a car, pay health insurance (assuming it doesn't become socialized), and even go on vacation, because you have money left over after you pay everything that you have to.

Of course this will vary, depending on how much you borrow and how much you spend on a house and eventually a practice. But as you gain experience, your net pay will increase, and consequently, you will be able to buy more things (or save money, which is an amazing concept).

 

[schen140]

no need to be so hostile, i'm here to have a friendly conversation. no need to take shots at me either

the flaw with your calculations is that they are based on a 150k first year associate earnings figure. that is clearly an outlier and not the average. i believe the average falls within 80-100k, which is a huge difference

if what you're saying is true, then there really is no issue at the heart of the matter, as we would all be able to live reasonably while paying off our debts quickly. but we know from today's dental students that this is simply not true. so either your calculations are off, or this issue simply does not exist. something's gotta give

in regards to your salary figure from the 2008 ADA book, is there any catch to it? such as having to work for a given number of years in private practice?

 

[Osity]

Where did you find the figure for $80-$100k for a first-year associate? I know four dentists off the top of my head that are making $150k (gross-before taxes and deductions) as associates, less than 5 years out of school. Perhaps it's a little less than that your very first year, but what you make will depend on what YOU can produce. You are not paid at an hourly rate like some jobs. Most likely, you will receive a percentage of what you produce (the dentists I know are making about 25% of what they are producing).

If you grossed $100k per year, you would wind up with close to $75k in net income. Divide that by 12 month, you make $6,250 a month. Less your costs, you are still in the black (meaning you have made money). It would give you a little less to work with, but you are still positive at the end of the month.

Sorry for the harshness, but you shouldn't talk about business topics if you don't understand them.

At the end of the day, if you are happy giving your money away to the government in the form of interest, you are more than welcome to do so. I will limit my payments to them because they already will be taking a large chunk in taxes.

 

[Osity]

I made a mistake in my initial calculations: I calculated taxes way too high.

If you gross $150k, you pay (based on current tax rates):

$35,709 in income taxes
8,170 in FICA (social security, medicare, medicaid, etc,)

That leaves you with roughly $106k in net income, or a little over $8,800 per month.

 

[schen140]

my family friends own a dental clinic and they pay their associates 80k per year. they give a set salary, but like you said, other dentists will pay based on a percentage of the overall income. from a google search, http://www.salarylist.com/all-associate-dentist-real-jobs-salary.htm states that the average associate salary is 110k. key being, the data there includes experienced associates and not just first-year ones

i never said that i don't understand business. i just said i'm too lazy to do the math. realistically speaking, from where we currently stand, we're unable to estimate accurately our future expenses anyway. we don't know how much we'll get taxed (I could get married, for example), or how much loans we'll take out to account for tuition hikes. right now it's just a ball park game. that's why i'm hesitant to get into specific numbers

i don't like the idea of paying all the accumulated interest, either. but more than that, i feel that paying off school loans and private practice loans as fast as i can should not be the priority if it interferes with me enjoying life, providing for my family, supporting my retired parents, etc

 

[Osity]

my family friends own a dental clinic and they pay their associates 80k per year. they give a set salary, but like you said, other dentists will pay based on a percentage of the overall income. from a google search, http://www.salarylist.com/all-associate-dentist-real-jobs-salary.htm states that the average associate salary is 110k. key being, the data there includes experienced associates and not just first-year ones

i never said that i don't understand business. i just said i'm too lazy to do the math. realistically speaking, from where we currently stand, we're unable to estimate accurately our future expenses anyway. we don't know how much we'll get taxed (I could get married, for example), or how much loans we'll take out to account for tuition hikes. right now it's just a ball park game. that's why i'm hesitant to get into specific numbers

i don't like the idea of paying all the accumulated interest, either. i just feel that paying off school loans and private practice loans as fast as i can should not be the priority if it interferes with me enjoying life, providing for my family, supporting my retired parents, etc

They must not be very good associates, or they are idiots, because they can most likely go elsewhere and make more than $80k.

And you don't have to say that you do or don't understand business, because from your posts, it is clear that you don't have much of a concept of it. Not trying to be too harsh, but that is pretty evident.

Like I said, as well as others, it's completely up to you how you handle your finances. The main idea is that you are not going to be living off nothing if you pay your loans off quickly. I am married, have a child, and we'll be just fine while paying off our loans in less than 10 years, and we'll still have enough money to buy a house, pay for my kids sports, etc.

This is completely a side note, but when you retire, like you mentioned your parents are, isn't the idea to have enough money to retire?

 

[schen140]

The main idea is that you are not going to be living off nothing if you pay your loans off quickly.

well i completely agree with this, so i'm not sure what we're arguing about. (actually i think we disagree about how luxuriously we'd be living if we opted to pay off our loans that quickly)

i don't deny that i'm not a business guy. i was just calling you out for saying "you don't know anything about business or how money works, you admitted it yourself," when actually i didn't say that at all

to answer your question, in an ideal situation, yes. but in today's economy, sometimes people have no choice but to retire, when they're already at a certain age and lose their job, or their health is breaking down, etc. there's a variety of factors

 

[Osity]

Good call schen. My point was that you can pay it off quickly and you should still have enough to do almost whatever you want (almost). Looks like we're agreeing on more and more.

Sorry to hear about the retirement situation, that's tough. Good for you for taking care of them. Take a lesson from that though, and start putting money into a retirement fund for yourself now.

 

[schen140]

i know, right? i promised to buy my dad a BMW, and also to remodel our house...(facepalm)

 

[7 Iron]

have things you want now or pay less and have those same things later. Personally, I live comfortably for ~$20,000 a year now and could easily do it after graduating from dental school. I recognize that not all circumstances are the same and some people have obligations that require them to spend more per year, but I'm not in that situation.

I'm all for paying down the loans as quickly as possible. I would like to point out, though, that "living like a student" (<$20k a year) gets old really fast, especially if you've done it for over 8 years through college and dental school. Realistically, I don't think most new graduates will pay down their loans this aggressively once they see their first few paychecks and realize they don't have to eat Ramen noodles every day anymore.

 

[joshwake]

Oooh scarry. Wonder what the "harsh reality" of making the national median of about 45k / year is like...?

this thread is ridiculous.