Incoming D[emoji23[emoji[emoji642]44][emoji[emoji642]45]] and really stressed out

[Nmcoy]

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[ab117]

I don't think you should reconsider unless you have a serious backup career that you could get into quickly. Say you pick some new path but it takes you another year to gain entry. That's a year of dentist income of opportunity cost which could approach negating the debt you'll incur + not having a "real" job for another year.

 

[pubhealthdent]

Hey everyone,

Last cycle I was fortunate enough to receive multiple acceptances to several schools. I decided to attend UNLV because out of the schools I was accepted to, UNLV was the only one that would offer in-state tuition after the first year, which would obviously lower the CoA. It was my understanding that my parents would be assisting me with living expenses during my time at UNLV, but today they told me that they essentially changed their mind and that I'm on my own. I'm extremely stressed out now because I fear that my total CoA will be too high for me to pay off in a reasonable amount of time after graduating. I intend to apply for scholarships during my time in school, and I also know that many people have gone through dental school with no aid from their parents or scholarships. Does anyone have a success story from this type of situation, or do you think I should be realistically reconsidering my decision to become a dentist? I know that when I've seen people consider turning down their acceptance in the past, I thought they were crazy, but now I'm just not sure. Any sort of insight or opinion is appreciated.

I graduated last year with $480k (from only dental shool, interest included). I had no financial assistance from family or scholarships. its totally doable. I'm doing PSLF with IBR so my monthly loan payments are like $1500/month which is totally doable. If I wanted to do a standard repayment plan, my payments would've been about $5500/month which would've been tough.

I guess what I'm trying to say is live like a dental student (don't blow through your loan money at the bar or on a really nice apartment) and you'll be good. If dentistry is what you want to do, you'll find a way to make it work.

 

[Vicviper]

Yeah, I'd say the vast majority of people don't get any financial support from their parents, and the schools will always have listed expected living allowances as part of the loan package you'll be looking at. Living expense is only a very small portion of the total cost of attending dental school, and should nowhere be considered a dealbreaker, as long as you're looking for a reasonable place to live. You're a student in dental school - sometimes you need to be ok with not having as nice of an apartment if the price is way better, as long as its still in a safe area.

I'm also on IBR, and it's the way to go- I got out of school with about $320K in loans, and now I'm working at a health center and doing loan forgiveness. If you want my best piece of advice though, look into the military! I totally would have done it if I knew better. It's probably not available for your first year, but maybe you can get it for years 2-4.

Good luck!

 

[Nmcoy]

Yeah, I'd say the vast majority of people don't get any financial support from their parents, and the schools will always have listed expected living allowances as part of the loan package you'll be looking at. Living expense is only a very small portion of the total cost of attending dental school, and should nowhere be considered a dealbreaker, as long as you're looking for a reasonable place to live. You're a student in dental school - sometimes you need to be ok with not having as nice of an apartment if the price is way better, as long as its still in a safe area.

I'm also on IBR, and it's the way to go- I got out of school with about $320K in loans, and now I'm working at a health center and doing loan forgiveness. If you want my best piece of advice though, look into the military! I totally would have done it if I knew better. It's probably not available for your first year, but maybe you can get it for years 2-4.

Good luck!

Thanks for the reply! I was set on the military and applied for the Air Force and Army HPSP. Unfortunately was not selected for the Air Force and was placed on the Order of Merit List (waitlist) for the Army, and haven't heard any updates since. I'll definitely be trying again for the 3-year scholarships this year though.

 

[Nmcoy]

I graduated last year with $480k (from only dental shool, interest included). I had no financial assistance from family or scholarships. its totally doable. I'm doing PSLF with IBR so my monthly loan payments are like $1500/month which is totally doable. If I wanted to do a standard repayment plan, my payments would've been about $5500/month which would've been tough.

I guess what I'm trying to say is live like a dental student (don't blow through your loan money at the bar or on a really nice apartment) and you'll be good. If dentistry is what you want to do, you'll find a way to make it work.

Thanks for your reply, I appreciate it!

 

[Nmcoy]

I don't think you should reconsider unless you have a serious backup career that you could get into quickly. Say you pick some new path but it takes you another year to gain entry. That's a year of dentist income of opportunity cost which could approach negating the debt you'll incur + not having a "real" job for another year.

I definitely understand your argument here, thanks for your reply!

 

[P7898]

I graduated last year with $480k (from only dental shool, interest included). I had no financial assistance from family or scholarships. its totally doable. I'm doing PSLF with IBR so my monthly loan payments are like $1500/month which is totally doable. If I wanted to do a standard repayment plan, my payments would've been about $5500/month which would've been tough.

I guess what I'm trying to say is live like a dental student (don't blow through your loan money at the bar or on a really nice apartment) and you'll be good. If dentistry is what you want to do, you'll find a way to make it work.

What about the tax bomb at the end of IBR?

 

[321931]

What about the tax bomb at the end of IBR?

I highly suggest anyone taking pubhealthdent's advice to take it with a grain of salt. Yes IBR works, but when you have kids, house, family, house, that debt burden along 450k loans ticking at 7% interest while saving for a huge tax bomb at the end of a dental career will keep you up at night. Most dentists can't even muster a 20+ year career...and we are looking at IBR being 25 years. Not to mention the dwindling prospects of dentistry due to saturation and insurance squeeze.

Bottom line: My advice for you OP is to have a plan. Buy a practice, start a practice, increase cash flow and pay it down. You will never "live" until you are debt free. But right now you are a matriculating student...so you have a ways to go. So enjoy the ride.

 

[pubhealthdent]

What about the tax bomb at the end of IBR?

Great question. With PSLF, you dont have to pay taxes on what's forgiven at the end of it. This is the only program to my knowledge that works like this.

 

[pubhealthdent]

I highly suggest anyone taking pubhealthdent's advice to take it with a grain of salt. Yes IBR works, but when you have kids, house, family, house, that debt burden along 450k loans ticking at 7% interest while saving for a huge tax bomb at the end of a dental career will keep you up at night. Most dentists can't even muster a 20+ year career...and we are looking at IBR being 25 years. Not to mention the dwindling prospects of dentistry due to saturation and insurance squeeze.

Bottom line: My advice for you OP is to have a plan. Buy a practice, start a practice, increase cash flow and pay it down. You will never "live" until you are debt free. But right now you are a matriculating student...so you have a ways to go. So enjoy the ride.

Most dentists cant work for 20 years? Seems slightly exaggerated. Would love to know where your getting that info from

 

[DentTreadOnMe]

Great question. With PSLF, you dont have to pay taxes on what's forgiven at the end of it. This is the only program to my knowledge that works like this.

What school did you go to?

And where are you working to qualify for PSLF?

 

[charlestweed]

I graduated last year with $480k (from only dental shool, interest included). I had no financial assistance from family or scholarships. its totally doable. I'm doing PSLF with IBR so my monthly loan payments are like $1500/month which is totally doable. If I wanted to do a standard repayment plan, my payments would've been about $5500/month which would've been tough.

I guess what I'm trying to say is live like a dental student (don't blow through your loan money at the bar or on a really nice apartment) and you'll be good. If dentistry is what you want to do, you'll find a way to make it work.

What’s the catch? You can’t just pay $1500/month, which is not even enough to cover the interest of the loan, and expect the entire $480k amount to be forgiven 20-25 years later.

 

[charlestweed]

OP, it may not be a bad thing that your parents can’t help you with the rent money. With slightly higher debt, you will be more motivated to work harder (ie 6 days/week) than your colleagues who owe less money. The more days you work and the more patients you treat, the more experience you will gain and the better dentist you will become. By working an extra Saturday every week for a Corp office, you can easily generate an extra $25k every year. And by doing this for 2 years, you should make enough to pay off the extra loan that you have to borrow to pay for the 4 years of rent in Vegas….assuming that the monthly rent payment is around $7-800/month.

After graduation, you can move back to live with your parents. That's another way to deal with high student loan debt and to save money….free shelter, free food, free laundry etc. I don’t think your parents will reject this.

 

[pubhealthdent]

What school did you go to?

And where are you working to qualify for PSLF?

I went to MOSDOH and am now working at an FQHC which qualifies as a 501c3 organization

 

[pubhealthdent]

What’s the catch? You can’t just pay $1500/month, which is not even enough to cover the interest of the loan, and expect the entire $480k amount to be forgiven 20-25 years later.

The catch is you have to be working in public health for 10 years. I don't think they ever imagined they'd have people in the program with such a high debt load but at this time there's no cap on the amount of loans

 

[DentTreadOnMe]

I went to MOSDOH and am now working at an FQHC which qualifies as a 501c3 organization

How much do you make at the FQHC, if you don’t mind me asking...? Trying to get an idea of opportunity cost of not doing private practice...

 

[Vicviper]

You should be looking at at least 120K at an FQHC, where I work starts new dentists at 142K. Plus, you usually save a ton in fringe benefits like not having to have malpractice insurance, they usually pay for your license, DEA, ADA membership, and you get insurance benefits which you'd not have if owning or most often working as an associate. Usually you'll always get a CE budget of about 2K as well. Add in loan forgiveness and the compensation package at FQHC's can be pretty nice, but I will say that all FQHC's are not created equal.

 

[DentTreadOnMe]

You should be looking at at least 120K at an FQHC, where I work starts new dentists at 142K. Plus, you usually save a ton in fringe benefits like not having to have malpractice insurance, they usually pay for your license, DEA, ADA membership, and you get insurance benefits which you'd not have if owning or most often working as an associate. Usually you'll always get a CE budget of about 2K as well. Add in loan forgiveness and the compensation package at FQHC's can be pretty nice, but I will say that all FQHC's are not created equal.

Thanks

 

[Big Time Hoosier]

The catch is you have to be working in public health for 10 years. I don't think they ever imagined they'd have people in the program with such a high debt load but at this time there's no cap on the amount of loans

I recently read the Department of Education estimates it will lose around $27 for every $100 in IBR loan programs. Clearly this is unsustainable and is going to cost hundreds of billions more than originally projected. IBR programs also disproportionately benefit graduate students, which are not their indented targets. These programs came about to help your kid’s 3rd grade teacher, not his pediatrician. In fact, this is already known as the “doctor loophole.” These programs were meant to help someone with $30,000 in loans, not $300,000.

The short/medium term macroeconomic outlook for the US government isn’t so great. For example, in 15 years the government will have to cut Social Security benefits by more than 20%. Do you expect the government to just forgive hundreds of thousands of dollars of your student debt all the while they tell some old widow who’s entirely dependent on Social Security to BTFU? Ain’t gonna happen.

If I were you, I’d be preparing to either have a cap on forgiveness retroactively imposed or to have the forgiven balance considered taxable income.

Big Hoss

 

[HarvardStudent]

Here's a pretty informative video about the way the income driven repayment plans work:

If you expect to make ~150k throughout your career (adjusted for inflation each year), you could probably stay on something like PAYE (10% of aftertax income each year) and take the forgiveness after 20 years (the forgiven amount is considered taxable income). That tax on forgiveness is the "tax bomb", and it could be pretty big (if you have 650k forgiven at an effective tax rate of 35%, you'll owe $227,500). You can plan for it you put aside a bit of money every month into something like bonds or stocks at the start of your career and transition it into cash once you get closer to the forgiveness point.

I attached a spreadsheet (made based on that video) with some sample numbers I put in. I assumed a one year GPR and then a salary of 120k that increases by 3% each year. For a total loan balance of 500k with an average interest rate of 6.5%, after taxes, loan payment, expenses, and saving for the tax bomb, you end up with $1,912.43 each month in discretionary income. You can use that to more aggressively pay back your loans, put more into retirement, or anything else you want. With $760 a month saved towards the tax bomb, by the time you have to pay it you will have enough saved up. If you pay the minimum payment throughout your career of making 120k and save $760 a month for the tax bomb, the total amount you put towards your loan of 500k ends up at 423k (including the $760 per month for the tax bomb).

Feel free to play around with the numbers in the spreadsheet

 

[Cthuluhoop]

Of course, that's based on the assumption that loan forgiveness exists 20 years from now. Plan on paying your debt and not relying on loan forgiveness for 20 years. Maybe use one of the government options as a crutch temporarily until you get on your feet and begin earning enough to make payments on a standard plan, but don't rely on loan forgiveness in 20 years.

Like Big Hoss said, it was meant for those with mid to high five figures of debt, not doctors and dentists with high six figure debts. Something is going to give within the next 20-25 years

 

[HarvardStudent]

Of course, that's based on the assumption that loan forgiveness exists 20 years from now. Plan on paying your debt and not relying on loan forgiveness for 20 years. Maybe use one of the government options as a crutch temporarily until you get on your feet and begin earning enough to make payments on a standard plan, but don't rely on loan forgiveness in 20 years.

Like Big Hoss said, it was meant for those with mid to high five figures of debt, not doctors and dentists with high six figure debts. Something is going to give within the next 20-25 years

I think PAYE and REPAYE taxed forgiveness might actually be safe for current borrowers, since it's in the Master Promissory Note we signed. Here's a link to that: Subsidized Loans and Unsubsidized Loans Promissory Note. Forgiveness is in the PAYE and REPAYE section

 

[Cthuluhoop]

I think PAYE and REPAYE taxed forgiveness might actually be safe for current borrowers, since it's in the Master Promissory Note we signed. Here's a link to that: Subsidized Loans and Unsubsidized Loans Promissory Note. Forgiveness is in the PAYE and REPAYE section

Everything is safe until it isn't. I just wouldn't bank on the government, especially in today's current climate, bailing me out in 20-25 years and would advise for almost all students to use them as a crutch initially, then rapidly pay the debt off when you begin making enough money. Who knows what will happen in 20 years.

Also if we're talking strictly on principles, taking out $600k to fund your education and then just banking on tax payers and the government to bail you out of your bad financial decision is a bit wrong in my opinion, but that's a different discussion altogether.

 

[Big Time Hoosier]

I think PAYE and REPAYE taxed forgiveness might actually be safe for current borrowers, since it's in the Master Promissory Note we signed. Here's a link to that: Subsidized Loans and Unsubsidized Loans Promissory Note. Forgiveness is in the PAYE and REPAYE section

“You may have to pay federal income tax on the loan amount that is forgiven.”

It’s right there in the same sections you mentioned in the promissory note. It says nothing, however, of the rate of said tax. They might not be able to outright deny the forgiveness of debt, but they very well could just tax any amount forgiven above a certain level at some ridiculous rate to claw their money back. Lesson learned: Read what you sign.

Big Hoss

 

[HarvardStudent]

“You may have to pay federal income tax on the loan amount that is forgiven.”

It’s right there in the same sections you mentioned in the promissory note. It says nothing, however, of the rate of said tax. They might not be able to outright deny the forgiveness of debt, but they very well could just tax any amount forgiven above a certain level at some ridiculous rate to claw their money back. Lesson learned: Read what you sign.

Big Hoss

“You may have to pay federal income tax on the loan amount that is forgiven.”

Looks like it's treated as income

 

[Big Time Hoosier]

“You may have to pay federal income tax on the loan amount that is forgiven.”

Looks like it's treated as income

Correct. But, for the PSLF, which pubhealthdent was referencing above, the forgiven balance is not currently taxed.

Big Hoss

 

[Big Time Hoosier]

Anyone still not sure why I always say go to the cheapest school you get into? If any of you predents haven’t figured it out by now, you will when your loans enter repayment.

And, snowflakes, don’t bank on all these “promises” politicians make to you to win your vote. Free college for everyone! Oh, and Medicare for all! And housing is a human right! And free childcare! It’s time for a political revolution! Green New Deal!

What BS.

Just to implement Medicare for all would require the federal government to more than double the individual and corporate tax rates. And what of all the other “free” stuff?! Where’s that money coming from? Maybe Bernie Sanders will donate his vacation home to the US Treasury. Maybe.

Big Hoss

 

[HarvardStudent]

Anyone still not sure why I always say go to the cheapest school you get into? If any of you predents haven’t figured it out by now, you will when your loans enter repayment.

And, snowflakes, don’t bank on all these “promises” politicians make to you to win your vote. Free college for everyone! Oh, and Medicare for all! And housing is a human right! And free childcare! It’s time for a political revolution! Green New Deal!

What BS.

Just to implement Medicare for all would require the federal government to more than double the individual and corporate tax rates. And what of all the other “free” stuff?! Where’s that money coming from? Maybe Bernie Sanders will donate his vacation home to the US Treasury. Maybe.

Big Hoss

Big Hoss 2020

 

[pubhealthdent]

How much do you make at the FQHC, if you don’t mind me asking...? Trying to get an idea of opportunity cost of not doing private practice...

I had 10+ job offers (all FQHCs, rural areas). Lowest salary was $145k. Where I am at, first year was guaranteed $200k then second year production based (I'll be probably right around 215-220k)

 

[pubhealthdent]

I recently read the Department of Education estimates it will lose around $27 for every $100 in IBR loan programs. Clearly this is unsustainable and is going to cost hundreds of billions more than originally projected. IBR programs also disproportionately benefit graduate students, which are not their indented targets. These programs came about to help your kid’s 3rd grade teacher, not his pediatrician. In fact, this is already known as the “doctor loophole.” These programs were meant to help someone with $30,000 in loans, not $300,000.

The short/medium term macroeconomic outlook for the US government isn’t so great. For example, in 15 years the government will have to cut Social Security benefits by more than 20%. Do you expect the government to just forgive hundreds of thousands of dollars of your student debt all the while they tell some old widow who’s entirely dependent on Social Security to BTFU? Ain’t gonna happen.

If I were you, I’d be preparing to either have a cap on forgiveness retroactively imposed or to have the forgiven balance considered taxable income.

Big Hoss

Yes the program is unsustainable in it's current state, but any changes that happen in the future will not affect people already in the program. And over the next 9 years while I continue going towards PSLF I'm able to put 30% of my after-tax income into a taxable investment account that should grow to the point that I could easily pay off anything if the govt changed their minds

 

[coldicecream]

The tuition for UNLV is $366K for OOS and $260k once you do IS after the first year. imo, these are both pretty reasonable amounts and I don't see any problems in paying those back. Like others have said, cut costs wherever you can like rent, food, clothes etc. Once you graduate, work as an associate for a couple years and open up your own practice. Honestly, there's nothing to worry so long as you have a plan.

 

[Nmcoy]

The tuition for UNLV is $366K for OOS and $260k once you do IS after the first year. imo, these are both pretty reasonable amounts and I don't see any problems in paying those back. Like others have said, cut costs wherever you can like rent, food, clothes etc. Once you graduate, work as an associate for a couple years and open up your own practice. Honestly, there's nothing to worry so long as you have a plan.

Luckily enough, I was selected to receive the Army HPSP this past Wednesday so I’m not too stressed anymore...but thank you for your response I greatly appreciate it!

 

[coldicecream]

Luckily enough, I was selected to receive the Army HPSP this past Wednesday so I’m not too stressed anymore...but thank you for your response I greatly appreciate it!

thats awesome! congrats!

 

[DentTreadOnMe]

I had 10+ job offers (all FQHCs, rural areas). Lowest salary was $145k. Where I am at, first year was guaranteed $200k then second year production based (I'll be probably right around 215-220k)

Dang. I’m headed your way haha.

 

[coldicecream]

I had 10+ job offers (all FQHCs, rural areas). Lowest salary was $145k. Where I am at, first year was guaranteed $200k then second year production based (I'll be probably right around 215-220k)

did you do a GPR or AEGD before starting work?

 

[pubhealthdent]

did you do a GPR or AEGD before starting work?

No, started work straight out of school

 

[321931]

I recently read the Department of Education estimates it will lose around $27 for every $100 in IBR loan programs. Clearly this is unsustainable and is going to cost hundreds of billions more than originally projected. IBR programs also disproportionately benefit graduate students, which are not their indented targets. These programs came about to help your kid’s 3rd grade teacher, not his pediatrician. In fact, this is already known as the “doctor loophole.” These programs were meant to help someone with $30,000 in loans, not $300,000.

The short/medium term macroeconomic outlook for the US government isn’t so great. For example, in 15 years the government will have to cut Social Security benefits by more than 20%. Do you expect the government to just forgive hundreds of thousands of dollars of your student debt all the while they tell some old widow who’s entirely dependent on Social Security to BTFU? Ain’t gonna happen.

If I were you, I’d be preparing to either have a cap on forgiveness retroactively imposed or to have the forgiven balance considered taxable income.

Big Hoss

The catch is you have to be working in public health for 10 years. I don't think they ever imagined they'd have people in the program with such a high debt load but at this time there's no cap on the amount of loans

I agree with everything said here. The biggest problem is this elephant in the room:

Why The Public Service Loan Forgiveness Headlines Are Misleading

The headlines surrounding Public Service Loan Forgiveness are misleading. Understand the nuances and learn why the program is working as intended.

www.forbes.com

"The numbers from the most recent Federal Student Aid data support that conclusion. FedLoan Servicing reports data on how many borrowers have made a certain number of qualifying payments. As of August 2018, it's as follows:

• 91-120 Months (8 to 10 years): 1,724 - Estimated Forgiveness 2019 to 2021
• 73-96 Months (6 to 8 years): 10,428 - Estimated Forgiveness 2021 to 2023
• 49-92 Months (4 to 6 years): 45,235 - Estimated Forgiveness 2023 to 2025
• 25-48 Months (2 to 4 years): 147,686 - Estimated Forgiveness 2025 to 2027
• 1-24 Months (up to 2 years): 413,922 - Estimated Forgiveness 2027 to 2029"

99% Of Borrowers Rejected Again For Student Loan Forgiveness

More than 99% of borrowers were rejected for student loan forgiveness.

www.forbes.com

"How many student loan borrowers were approved for student loan forgiveness?

Approximately 610 applications have been approved and 338 borrowers have collectively received $21.1 million in public service loan forgiveness. Cumulatively, only about 640 borrowers have received public service loan forgiveness based on approximately 132,000 processed applications. That's less than 0.5%.

"

Honestly, I would be surprised if PSLF holds up into the next decade. It is unsustainable with the current debt loads. I wouldn't be surprised if it gets scrapped and the borrowers get screwed, and or taxed for amount forgiven or whatever.

My question is that of these 132,000 processed applications- did they actually work for 10 years then apply for PSLF...and get rejected and in the end only 610 applicants approved? Cuz that's crazy to pay the minimum...let interest accrue...and then apply year 10- think oh hey everything is forgiven- but then you are rejected...and now have a 500k loan tab that has interest on it for the past 10 years. Am I reading this right or wrong?

 

[Big Time Hoosier]

I agree with everything said here. The biggest problem is this elephant in the room:

Why The Public Service Loan Forgiveness Headlines Are Misleading

The headlines surrounding Public Service Loan Forgiveness are misleading. Understand the nuances and learn why the program is working as intended.

www.forbes.com

"The numbers from the most recent Federal Student Aid data support that conclusion. FedLoan Servicing reports data on how many borrowers have made a certain number of qualifying payments. As of August 2018, it's as follows:

• 91-120 Months (8 to 10 years): 1,724 - Estimated Forgiveness 2019 to 2021
• 73-96 Months (6 to 8 years): 10,428 - Estimated Forgiveness 2021 to 2023
• 49-92 Months (4 to 6 years): 45,235 - Estimated Forgiveness 2023 to 2025
• 25-48 Months (2 to 4 years): 147,686 - Estimated Forgiveness 2025 to 2027
• 1-24 Months (up to 2 years): 413,922 - Estimated Forgiveness 2027 to 2029"

99% Of Borrowers Rejected Again For Student Loan Forgiveness

More than 99% of borrowers were rejected for student loan forgiveness.

www.forbes.com

"How many student loan borrowers were approved for student loan forgiveness?

Approximately 610 applications have been approved and 338 borrowers have collectively received $21.1 million in public service loan forgiveness. Cumulatively, only about 640 borrowers have received public service loan forgiveness based on approximately 132,000 processed applications. That's less than 0.5%.

"

Honestly, I would be surprised if PSLF holds up into the next decade. It is unsustainable with the current debt loads. I wouldn't be surprised if it gets scrapped and the borrowers get screwed, and or taxed for amount forgiven or whatever.

My question is that of these 132,000 processed applications- did they actually work for 10 years then apply for PSLF...and get rejected and in the end only 610 applicants approved? Cuz that's crazy to pay the minimum...let interest accrue...and then apply year 10- think oh hey everything is forgiven- but then you are rejected...and now have a 500k loan tab that has interest on it for the past 10 years. Am I reading this right or wrong?

There’re way too many unknowns, which is why the smart ones will expect to fully repay whatever they borrowed.

Big Hoss

 

[TanMan]

Future dentists should not plan to be defeated so early by planning for loan forgiveness. Future dentists should really find a way to make a lot of money quickly to move on from their debts and on to their lives. I'm not sure why this generation is so keen on avoiding debt that they incurred as opposed to making as much money as possible to pay for their liabilities, past, current, and future.

 

[DrJeff]

Future dentists should not plan to be defeated so early by planning for loan forgiveness. Future dentists should really find a way to make a lot of money quickly to move on from their debts and on to their lives. I'm not sure why this generation is so keen on avoiding debt that they incurred as opposed to making as much money as possible to pay for their liabilities, past, current, and future.

My hunch is the trend over the last 10 to 15+ years where the media (and arguably some within the education system as well) try to essentially demonize wealth, plays a bit of a roll in this.

Making money, even a lot of money, isn't a bad thing or something people should be ashamed of. If you have the skill set and/or talent so that others will pay you, you earned that money. That isn't a bad thing

 

[ab117]

Future dentists should not plan to be defeated so early by planning for loan forgiveness. Future dentists should really find a way to make a lot of money quickly to move on from their debts and on to their lives. I'm not sure why this generation is so keen on avoiding debt that they incurred as opposed to making as much money as possible to pay for their liabilities, past, current, and future.

It's because we know that our degrees have been devalued while they cost significantly more to obtain than they did for our parents.

The Myth of Working Your Way Through College

Once upon a time, a summer spent scooping ice cream could pay for a year of college. Today, the average student's annual tuition is equivalent to 991 hours behind the counter.

www.theatlantic.com

In 1979, 182 hours of work at minimum wage could pay for the average year of public university tuition, while in 2013 it would require 991 hours of work, before even accounting for increased room and board costs. It's the exact problem we talk about on here when everyone says that NYU's dental tuition is criminal when the same DDS/DMD costs half as much at a state school. But not everyone has realistic access to a state school while they still hope to obtain the significant benefits they believe that DDS/DMD will grant them.

I know there's an argument against going to dental school at all at these costs, but tons of college students and dental students don't read on forums like this and are financially clueless (of course this is also bad but it's largely true), they just also know you're "supposed" to go to college, that dentistry is "supposed" to offer a good ROI with many benefits, and that the government will help them. Then, a few years out when the reality no one prepared them for hits and they're paying hundreds to thousands of dollars a month for years to come, it's not surprising to me that people feel tricked or ripped off that they still have to work a second job just to be able to afford rent even with their degree, when not too long ago most college-educated people could afford a home, a car, and support their entire family on a single income.

Imperfect analogy incoming, but I think you'd probably agree that in most of America it's almost a necessity to own a car. Just imagine if the government started giving out guaranteed auto loans to everyone. When a Civic costs $90,000 after a couple years, even though we know it's only worth $20,000 at most, we'd feel like we were getting ripped off. Some would adapt depending on availability of public transport, ability to relocate closer to their job, etc., but for many a car would still be a de facto necessity, just like most people today believe they "need" at least an undergraduate degree. In this situation, who wouldn't get right in line if the government started saying they'd forgive $45,000 of that loan? Especially when you know for a fact that the car was only worth $20,000 in the first place, but you - fully justified or not - honestly believed that you didn't really have a choice but to take the loan to obtain a perceived necessity. The government made some questionable decisions in this scenario, as did the people who took their loans, but the malicious actor here is Honda raising their prices above the value of their product to siphon taxpayer money into executive pockets, knowing that for some weird crazy reason, the government would never ask them why the price jumped 450%.

I agree with you that we should be informed and be willing to pay what we agree to take out and that's what I'm planning to do, but as a "millennial" who had the luxury of going to an extremely affordable undergrad and still had to work a lot of hours and take out some debt, I completely understand the frustration that my generation feels about the current situation.

One of my favorite things I've learned about history is that since the dawn of human culture, every generation has complained about how lazy, selfish, entitled, and stupid the next generation was.

25 Quotes in 2,500 Years Proving We Always Blame the Younger Generation

This is not new.

historyhustle.com

I don't mean to come off as antagonistic or anything, I may just be reading a little too much into your comment and maybe you know all this! Just trying to offer some perspective.

 

[TanMan]

It's because we know that our degrees have been devalued while they cost significantly more to obtain than they did for our parents.

The Myth of Working Your Way Through College

Once upon a time, a summer spent scooping ice cream could pay for a year of college. Today, the average student's annual tuition is equivalent to 991 hours behind the counter.

www.theatlantic.com

In 1979, 182 hours of work at minimum wage could pay for the average year of public university tuition, while in 2013 it would require 991 hours of work, before even accounting for increased room and board costs. It's the exact problem we talk about on here when everyone says that NYU's dental tuition is criminal when the same DDS/DMD costs half as much at a state school. But not everyone has realistic access to a state school while they still hope to obtain the significant benefits they believe that DDS/DMD will grant them.

I know there's an argument against going to dental school at all at these costs, but tons of college students and dental students don't read on forums like this and are financially clueless (of course this is also bad but it's largely true), they just also know you're "supposed" to go to college, that dentistry is "supposed" to offer a good ROI with many benefits, and that the government will help them. Then, a few years out when the reality no one prepared them for hits and they're paying hundreds to thousands of dollars a month for years to come, it's not surprising to me that people feel tricked or ripped off that they still have to work a second job just to be able to afford rent even with their degree, when not too long ago most college-educated people could afford a home, a car, and support their entire family on a single income.

Imperfect analogy incoming, but I think you'd probably agree that in most of America it's almost a necessity to own a car. Just imagine if the government started giving out guaranteed auto loans to everyone. When a Civic costs $90,000 after a couple years, even though we know it's only worth $20,000 at most, we'd feel like we were getting ripped off. Some would adapt depending on availability of public transport, ability to relocate closer to their job, etc., but for many a car would still be a de facto necessity, just like most people today believe they "need" at least an undergraduate degree. In this situation, who wouldn't get right in line if the government started saying they'd forgive $45,000 of that loan? Especially when you know for a fact that the car was only worth $20,000 in the first place, but you - fully justified or not - honestly believed that you didn't really have a choice but to take the loan to obtain a perceived necessity. The government made some questionable decisions in this scenario, as did the people who took their loans, but the malicious actor here is Honda raising their prices above the value of their product to siphon taxpayer money into executive pockets, knowing that for some weird crazy reason, the government would never ask them why the price jumped 450%.

I agree with you that we should be informed and be willing to pay what we agree to take out and that's what I'm planning to do, but as a "millennial" who had the luxury of going to an extremely affordable undergrad and still had to work a lot of hours and take out some debt, I completely understand the frustration that my generation feels about the current situation.

One of my favorite things I've learned about history is that since the dawn of human culture, every generation has complained about how lazy, selfish, entitled, and stupid the next generation was.

25 Quotes in 2,500 Years Proving We Always Blame the Younger Generation

This is not new.

historyhustle.com

I don't mean to come off as antagonistic or anything, I may just be reading a little too much into your comment and maybe you know all this! Just trying to offer some perspective.

I can see how this applies to individuals who have taken out massive student loans without a realistic chance of paying them back (something that comes to mind is an art history major). However, I don't think this applies as much to our profession of dentistry. Dental students may have to take a much larger loan, but the earning potential is far greater than many of our engineering/science counterparts. There is a possibility that future dentists take out a large loan without any real concept of how much they have to work to pay that back or even worse, they are just too lazy and/or lack initiative to get out of the hole they got themselves into.

Going into dentistry can definitely shackle you in the beginning and not having a plan (PSLF is not a real plan, but a plan to be a slave to middle/middleupper class life...) can definitely feel daunting as you feel like you're forced into an indentured servitude with your student loans. The best way to get out of that is to have a strategy to get out of the shackle of student loans and have a nice dentist lifestyle afterwards.

 

[321931]

I can see how this applies to individuals who have taken out massive student loans without a realistic chance of paying them back (something that comes to mind is an art history major). However, I don't think this applies as much to our profession of dentistry. Dental students may have to take a much larger loan, but the earning potential is far greater than many of our engineering/science counterparts. There is a possibility that future dentists take out a large loan without any real concept of how much they have to work to pay that back or even worse, they are just too lazy and/or lack initiative to get out of the hole they got themselves into.

Going into dentistry can definitely shackle you in the beginning and not having a plan (PSLF is not a real plan, but a plan to be a slave to middle/middleupper class life...) can definitely feel daunting as you feel like you're forced into an indentured servitude with your student loans. The best way to get out of that is to have a strategy to get out of the shackle of student loans and have a nice dentist lifestyle afterwards.

The earning potential is far greater- but you have to go into ownership. You have to.

 

[HarvardStudent]

The earning potential is far greater- but you have to go into ownership. You have to.

Completely agree, ownership is incredible financially speaking. If you're being paid 30% and you're producing 750k of dentistry, your compensation is 225k. If you're an owner with a practice overhead of 60%, and you have a 3:1 ratio of doctor:hygiene production, then your practice is collecting one mil and you're taking home 400k. All while doing the same amount of dentistry at arguably a better quality and satisfaction since you control the systems of the practice. Not to mention the tax benefits of ownership that makes the dollar of an owner stretch farther than the dollar of an associate.

 

[321931]

Completely agree, ownership is incredible financially speaking. If you're being paid 30% and you're producing 750k of dentistry, your compensation is 225k. If you're an owner with a practice overhead of 60%, and you have a 3:1 ratio of doctor:hygiene production, then your practice is collecting one mil and you're taking home 400k. All while doing the same amount of dentistry at arguably a better quality and satisfaction since you control the systems of the practice. Not to mention the tax benefits of ownership that makes the dollar of an owner stretch farther than the dollar of an associate.

Yup.

 

[princeafrica]

Yup.

What’s the likelihood of a bank loaning you $1,000,000+ your first year out to buy a big practice?

 

[HarvardStudent]

What’s the likelihood of a bank loaning you $1,000,000+ your first year out to buy a big practice?

Wells Fargo and BoA have dental divisions that do this a lot, and lendeavor is a dental specific bank that does a lot of acquisitions. What I'm hearing is that they like to see production reports and see that you've been associating for a year or two to make sure you can reproduce the dentistry of the practice you're buying, and the acquisition has to make sense from a cash flow perspective (so not having a mortgage will help). Student loans are not as big of an issue, since under PAYE/REPAYE they won't be more than 10% of your monthly income. In general banks like to give loans for dental acquisitions, and will finance 100% of it with no money down.

 

[HarvardStudent]

Lots n lots of risks not explicitly stated in your post. Personally know general dentists AND specialists who have filed bankruptcy unfortunately. Wish everyone the best.

Definitely not risk free, but I think the statistic I've heard from dental CPAs is that 99% of all dental practices don't fail in their first year. Not failing and making a healthy profit aren't the same thing, but I think the latter can be accomplished by getting educated on business and practice management.

 

[ab117]

I can see how this applies to individuals who have taken out massive student loans without a realistic chance of paying them back (something that comes to mind is an art history major). However, I don't think this applies as much to our profession of dentistry. Dental students may have to take a much larger loan, but the earning potential is far greater than many of our engineering/science counterparts. There is a possibility that future dentists take out a large loan without any real concept of how much they have to work to pay that back or even worse, they are just too lazy and/or lack initiative to get out of the hole they got themselves into.

Going into dentistry can definitely shackle you in the beginning and not having a plan (PSLF is not a real plan, but a plan to be a slave to middle/middleupper class life...) can definitely feel daunting as you feel like you're forced into an indentured servitude with your student loans. The best way to get out of that is to have a strategy to get out of the shackle of student loans and have a nice dentist lifestyle afterwards.

I hope you're right haha, like I said, just trying to offer some perspective. To me it's totally understandable that a lot of people are upset about the overall situation. I think a lot of current dental students are at least a little worried that it's going to be more difficult than they anticipated to pay their debt. Part of the concern is the possibility that becoming an owner like you becomes less and less feasible with corporitization and high debt loads discouraging and possibly outright preventing practice purchase/startup for new grads.

People may go into dentistry knowing that you guys are still doing good and ownership is key only to find that the barriers to actually becoming an owner have gotten higher and higher since they were a predent.