How to pay off debt & handle money

[lil_stethoscope]

Hello,

I am entering dental school in 2019 and I am completely in the dark about taking out loans for dental school and how you would go about paying them back in an efficient manner. I feel like it is a topic that most people need help with, I know it can be very variable based on situation but I am speaking for the normal student.

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[free99]

1. Go to the cheapest school possible
2. Take out as little money in student loans as possible without sacrificing your mental or physical health
3. I recommend staying with federal loans and not even entertaining private loans -- gov't loan repayment programs give you a lot of flexibility that private loans do not
4. Consider NHSC or military scholarships
5. Once you graduate understand the loan repayment options and pick the best plan for you -- REPAYE is a popular one because of the 50% interest subsidy and doesn't penalize you for paying down loans early.

 

[lil_stethoscope]

1. Go to the cheapest school possible
2. Take out as little money in student loans as possible without sacrificing your mental or physical health
3. I recommend staying with federal loans and not even entertaining private loans -- gov't loan repayment programs give you a lot of flexibility that private loans do not
4. Consider NHSC or military scholarships
5. Once you graduate understand the loan repayment options and pick the best plan for you -- REPAYE is a popular one because of the 50% interest subsidy and doesn't penalize you for paying down loans early.

Thank you very much for your detailed answer. Can you elaborate on how you went about budgeting your student loans so that way you are taking out the least amount possible for your lifestyle.

 

[charlestweed]

1. Live with your parents if your dental school is not too far away.

2. If you have to rent an apartment, share the cost with a roommate or roommates. I lived with 4 dental school classmates and only paid 1/5 of the rent + utility bills. When I studied for the finals, they also studied and not disturbed each other.

3. Avoid eating out too often. When I drove home to visit my parents (2-3 times a month), my mom cooked food that lasted me more than a week. Each day, I just took the food out of the freezer and tossed it in a microwave….saved me a lot of time and $$$.

4. Buy cheap dental supplies and used textbooks on Ebay or Amazon. There was no Ebay when I went to school years ago.... and I had to spend ridiculous amount of money on burs, ivorine teeth, and other supplies.

I think these are very small sacrifices to make. The more you sacrifice now, the greater the reward you will earn later….it’s not just the financial reward but also the mental toughness and the budget management skill that you gain. You will have no problem getting good paying jobs after graduation. And with good jobs and budget management, you should be able to pay back your loan a lot faster than your classmates, who maxed out their loans. All 4 of my roommates specialized (1 ortho, 2 endos, and 1 OS). They all work hard and are very successful.

 

[lil_stethoscope]

1. Live with your parents if your dental school is not too far away.

2. If you have to rent an apartment, share the cost with a roommate or roommates. I lived with 4 dental school classmates and only paid 1/5 of the rent + utility bills. When I studied for the finals, they also studied and not disturbed each other.

3. Avoid eating out too often. When I drove home to visit my parents (2-3 times a month), my mom cooked food that lasted me more than a week. Each day, I just took the food out of the freezer and tossed it in a microwave….saved me a lot of time and $$$.

4. Buy cheap dental supplies and used textbooks on Ebay or Amazon. There was no Ebay when I went to school years ago.... and I had to spend ridiculous amount of money on burs, ivorine teeth, and other supplies.

I think these are very small sacrifices to make. The more you sacrifice now, the greater the reward you will earn later….it’s not just the financial reward but also the mental toughness and the budget management skill that you gain. You will have no problem getting good paying jobs after graduation. And with good jobs and budget management, you should be able to pay back your loan a lot faster than your classmates, who maxed out their loans. All 4 of my roommates specialized (1 ortho, 2 endos, and 1 OS). They all work hard and are very successful.

WOW thank you very much i was not expecting a great answer like that! I really cant thank you enough!

 

[free99]

Thank you very much for your detailed answer. Can you elaborate on how you went about budgeting your student loans so that way you are taking out the least amount possible for your lifestyle.

charlestweed summed it up pretty well. I am married and share all my expenses with my wife, but if you're not I'd recommend roommates to cut cost of rent. Live close to school so you can walk or ride your bike if you can manage living without a car. Buy food in bulk and try to make simple meals to bring for lunches - slow cooker meals are really good to get a protein and grain quickly and simply. If you're going to go out with friends try to pregame and limit how many drinks you buy out at a bar - the tab adds up! But it's all a balance -- I'd have been totally miserable if I never did anything social, ate like a peasant, and never bought myself anything. So it's a balance of spending enough to do things that rejuvenate you and make you happy and not going overboard. Luckily many of my hobbies are free/low cost (hiking fishing cycling). The Millionaire Next Door is a good book that talks about finding happiness in a simple lifestyle.

I think being even slightly aware of how much money you spend on a monthly basis puts you way ahead of a lot of people in school. I think people tend to think about student loans like fake money because the debt incurred is just so so huge and it's so easy to get the loans. But I'm with charlestweed- little things ad up! I was amazed at the stuff people threw away when they graduated ... I sold dozens of dental things on dentaltown and ebay that others thought was garbage.

 

[2TH MVR]

I know it may not be practical, but a part time job can help. My last yr at DS .... I had a Fri evening, sat PT job at a Gold"s Gym. Made a few bucks, cleared my mind a little and worked out for free.

 

[TanMan]

Hello,

I am entering dental school in 2019 and I am completely in the dark about taking out loans for dental school and how you would go about paying them back in an efficient manner. I feel like it is a topic that most people need help with, I know it can be very variable based on situation but I am speaking for the normal student.

If you plan to open your own office soon after graduation, I may suggest borrowing more money to have the opportunity to buy equipment and supplies when the opportunity arises (such as endo files, easily resellable items, student pricing, student to student sales, etc...). 5-10% loan, 500% markup! Each time a graduating class would dump all their stuff, I'll either ask for it for free or buy it at ridiculously reduced rates and resell them for a profit on ebay (on stuff I'd never use). If you resell the stuff on ebay, just wait for all the dental students to sell their stuff so you're not in a price war. You can either earn a lot of money doing this, or save a lot of money for your practice startup.

 

[Cold Front]

There are 2 ways to pay off student loans:

1. The typical: Austerity measures. Live like a student... move to your parents basement... etc.

2. The atypical: Indebtedness. Don’t worry “too much” about your student loans and focus on potential... open or buy a practice as young as you can... play the long term game of retiring early with assets and savings that took the driving seat over student loans at a younger age. Disclaimer: Under a “calculated” plan.

Your risk aversiveness, personal goals, and retirement plans should be a factor in the path that works best for you. Student loans are just one piece of the puzzle for “hopefully” a rewarding career.

I took option 2, but it worked to “my” advantage. No two people who make the same income, let alone dentists, can be in similar situation in the long run. Life is full of variables, and most goals are easier said than done even with the best laid out plans.

 

[theleatherwalle]

I graduated with around 250k of debt back in 2015.

I would follow this plan which is what I have done.

Work at a corporate entity. You will be likely be making anywhere from 120-140 a year or 25-30% of production.

Pay back the minimum and save to buy a practice. It may seem like a riskier an option, but I've had more luck doing this. I will say that I commute nearly an hour to get to community outside of the metro where I live.

 

[AEZDent]

Select a school which will cost you less first of all. Secondly go for the government loans instead of the private ones. Stay with your parents to cut out additional expenditure.

Why government instead of private?

 

[princeafrica]

Why government instead of private?

I believe private loans have higher interest and do not have as much flexibility on ways to pay them off

 

[zToothinator]

I believe private loans have higher interest and do not have as much flexibility on ways to pay them off

Private loans don't necessarily have higher interest. You are correct that they don't offer as much flexibility to pay them off though.

Compared to Grad PLUS loans with 7.6% interest and a 4.248% origination fee, private loans can start from 5.99% interest depending on your credit score and offer 0% origination fee.

 

[deleted480308]

Read the @The White Coat Investor book/blog

 

[AEZDent]

Private loans don't necessarily have higher interest. You are correct that they don't offer as much flexibility to pay them off though.

Compared to Grad PLUS loans with 7.6% interest and a 4.248% origination fee, private loans can start from 5.99% interest depending on your credit score and offer 0% origination fee.

I haven't done a lot of research on this, but that's what I found out as well. It can also be lower if you get someone to cosign for you. Still not sure which is the better option though.

 

[BluntForceTrauma]

Read the @The White Coat Investor book/blog

Second this. Great resource.

 

[Cold Front]

We really live in an interesting times in terms of debt. There was a report that came out couple of days ago, that over 7 million people (up from 5.8 million 8 years ago) are behind on their auto loan payments by 90+ days or more by the end of 2018. Majority of those people were under the age of 30 and don’t understand the impact those late payments have on their credit.

There are 3 Americas in this country; The Jeff Bezos, The Middle Class, and the Many Who Struggle to make ends meet (including many grads and students with huge debt).

The next recession will not come from housing debt, auto loans, or personal credit, but from the corporations who create debt on themselves and extending that debt and liabilities to markets and consumers.

April is a big month in every institution in this country’s calendar. That’s when they share the next academic year’s tuition and cost of attendance. Almost every dental school (if not all) will increase their tuition as little as 2% and as high as 8%. Again, an interesting time to be alive in terms of debt in this country.

 

[2TH MVR]

We really live in an interesting times in terms of debt. There was a report that came out couple of days ago, that over 7 million people (up from 5.8 million 8 years ago) are behind on their auto loan payments by 90+ days or more by the end of 2018. Majority of those people were under the age of 30 and don’t understand the impact those late payments have on their credit.

There are 3 Americas in this country; The Jeff Bezos, The Middle Class, and the Many Who Struggle to make ends meet (including many grads and students with huge debt).

The next recession will not come from housing debt, auto loans, or personal credit, but from the corporations who create debt on themselves and extending that debt and liabilities to markets and consumers.

April is a big month in every institution in this country’s calendar. That’s when they share the next academic year’s tuition and cost of attendance. Almost every dental school (if not all) will increase their tuition as little as 2% and as high as 8%. Again, an interesting time to be alive in terms of debt in this country.

Looks like you and I read the same stuff. Did you also see that the GOP is looking at garnishing wages for student loans?

I don't think the majority of average citizens care about world or nation economics. They care about their own situation. What sucks is that outward economic issues as you mentioned (Corp debt, govt, etc) will impact average people regardless. What I find interesting is people's love affair with celebs, reality shows, athletes. I mean .... I love watching sports, but the obscene amounts of money poured into sport's arenas, athlete salaries, owners, TV rights, etc. etc. is obscene. Who do you blame. US lol. We propagate this kind of behavior. Look at all those reality tv shows. People seem to like watching the HAVES and HAVE NOTS.

The only true escape is to be financially independent and debt free. Not an easy task for the younger generation. Hopefully the sdn message of becoming a dentist with the lowest amount of debt takes hold and as a dentist .... you can have a better than average life ..... unless you decide you want to live the DOCTOR'S life with the big house, cars, etx. etc. Not saying certain material objects are bad, but make sure you can afford them. Affording something doesn't mean being able to get a loan for it.

Once you graduate. There are plenty of jobs available. Yes the system (mostly urban) is heading Corp, but work it to your advantage. Get your own private practice and have a Corp job on the side. Win-win. Be happy.

Oh .... it's Valentines Day. Make sure you buy something nice for your significant other. And don't use a credit card unless you plan to pay the balance off entitrely to avoid finance fees.

 

[Cold Front]

Looks like you and I read the same stuff. Did you also see that the GOP is looking at garnishing wages for student loans?

Yes, we do read the same stories. That student loans mandatory garnishment story is a bill that will not happen under the current congress. Democrats will not support it, and many Republicans have many people in their districts who are against it. So it’s a headline grabber move and will never happen.

The big story today is that retail sales is down to the lowest level in a decade. About 80% of US economy is driven by consumers, and this is a big crack in the economy now, and many are hoping this report is an outlier or we will be in big trouble if the retail sales continue to decline - specially after the tax reforms and cuts that was intended to prevent that from happening. Xi Jinping is meeting Mnuchin tomorrow, so the US delegation will play nice after today’s retail sales drop. So expect some trade optimism to counter that.