Loan amounts

[Hopin']

I've been getting really worried about my loans. I haven't even started the school yet and getting worried about upcoming loans worth of about $300K.
Any help you guys wanna offer me to ease up my tension???
Appreciate you guys in advance...

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[coreyb]

It's a lot of money indeed.
------------------------------------
From online loan calculator:

Loan Balance: $300,000.00
Loan Interest Rate: 6.80%
Loan Term: 30 years
Minimum Payment: $50.00

Monthly Loan Payment: $1,955.78
Number of Payments: 360

Cumulative Payments: $704,075.60
Total Interest Paid: $404,075.60
--------------------------------------
2K per month is certainly doable on an 'average' dentist salary, but it's still a large amount of debt.
--------------------------------------
My suggestions:
*Look into military HPSP scholarship.
*Look into NHSC scholarship.
*Look into NHSC Loan repayment opportunities.

 

[mahya]

I've been getting really worried about my loans. I haven't even started the school yet and getting worried about upcoming loans worth of about $300K.
Any help you guys wanna offer me to ease up my tension???
Appreciate you guys in advance...

I understand your worry since I am looking for the same amount of loan..I am just hoping I get a scholarship from a school and try to work in the first year besides if my parents could help me with the rent..then I might be able to survive by reducing my loans to around 250,000 K. I am so worried too...If you are a guy..you would be better off to do a military but about girls I am not sure..I am trying to apply to scholarships when I start the school and maybe do researchs win some money..I don't know..GOD HELPPPPP

 

[diagnodent]

I would be leary of 2k in loans per month. Thats a lot. How much do you expect to make right out. 8K per month equals at the most 5k after taxes. Minus 2k for student loans. You left with 3k per month for everything else and that won't even pay for my mortgage.

I'd look into the military for scholarships.

 

[Lidopaine82]

I'd look into the military for scholarships.

Trust me.. don't let the temptation of money they dangle infront of your face allow you to sell your soul. be forewarned.

 

[Cold Front]

I would be leary of 2k in loans per month. Thats a lot. How much do you expect to make right out. 8K per month equals at the most 5k after taxes. Minus 2k for student loans. You left with 3k per month for everything else and that won't even pay for my mortgage.

I'd look into the military for scholarships.

Ok...

a - average dentist doesn't continue to make $8K a month throughout his/her career.

b - no one (maybe few) is stupid enough to buy a house with $3K a month (after taxes) income, especially when they know their income will go up with experience. By all means, it's doable, but it's odd to rush to buy a house straight after school (with a chunk of debt on your shoulders).

c - this is a good debt, an investment that will make your career more flexible and enjoyable.

From business point of view, EVERYTHING SHOULD BE FINE!

 

[diagnodent]

I find it amusing that people who haven't attended dental school or graduated are able to comment on a question about loan amounts and repaying them. I'm just trying to be helpful and give advice. I know what the real world is all about.

Ok I'll go with you about not buying a house your first year out, but wouldn't you want to buy a house after year 1 to take the tax deduction. A mortgage of 250k is about a monthly payment of 2200. But as an associate your salary won't go up that much and you might make 120k as an associate. Just because you see the average salaries of 170k for dentists it doesn't mean you will automatically earn that much. Not everyone does, and thats why they are averages. Some make more and some make less.

If I had to do it all again for 300k in school debt I wouldn't do it without a military scholarship, thats all I'm saying. My debt coming out wasn't even close to that and am fine financially so I can afford a large mortage and the other fine things in life. But I know of many dentists who as soon as they get out of school start buying nice cars and spend too much money stupidly.

If you aren't going to go to the military, then the best thing to do would be to purchase a practice in an underserved area like Iowa, Kansas, etc and make good money from day one.

Just my 2 cents from an old sage.

 

[TKD]

I find it amusing that people who haven't attended dental school or graduated are able to comment on a question about loan amounts and repaying them. I'm just trying to be helpful and give advice. I know what the real world is all about.

Ok I'll go with you about not buying a house your first year out, but wouldn't you want to buy a house after year 1 to take the tax deduction. A mortgage of 250k is about a monthly payment of 2200. But as an associate your salary won't go up that much and you might make 120k as an associate. Just because you see the average salaries of 170k for dentists it doesn't mean you will automatically earn that much. Not everyone does, and thats why they are averages. Some make more and some make less.

If I had to do it all again for 300k in school debt I wouldn't do it without a military scholarship, thats all I'm saying. My debt coming out wasn't even close to that and am fine financially so I can afford a large mortage and the other fine things in life. But I know of many dentists who as soon as they get out of school start buying nice cars and spend too much money stupidly.

If you aren't going to go to the military, then the best thing to do would be to purchase a practice in an underserved area like Iowa, Kansas, etc and make good money from day one.

Just my 2 cents from an old sage.

Whew am I glad I escaped with a 100K loan! I would avoid military - there are other avenues for loan repayment - federally qualified health care centers treat new grads very well. Indian health service. Academics. Major point you hit right on the head is with underserved areas...that's the best kept secret right now. no stress. nice pace. great pay. and man do patients appreciate you.

 

[Cold Front]

I find it amusing that people who haven't attended dental school or graduated are able to comment on a question about loan amounts and repaying them.

You don't have to go to dental school to talk about loans and how they can be repaid. If you think that not to be the case, then you must have a simple life and depend on someone to run your financial circumstances.

 

[diagnodent]

You don't have to graduate school to be able to talk about paying back loans. However with all the mis-information about salaries on this board you just don't understand how little money you have the potential to earn. Those who haven't started paying loans off don't understand that 2k/month is a ton.

Everyone here seems to think they are going to have some million dollar practice and earn 300k per year and only work 4 days per week with 4 weeks vacation a year. Its not as easy as it looks. It takes many dentists years to earn over 120k.

I'm not trying to put anyone down or call anyone stupid, I just want you to understand that 300k in student loans is a lot.

And from a business point of view a dental student loan of 300k is a bad investment.
Its not like a house loan or a business loan where once the loan is paid off the property or business has appreciated.
If you are doing it b/c you have the potential to make good money then its a bad idea. To earn the big bucks you have to invest another 400-500k after school to purchase a practice. Then after 7 years of paying off that loan you finally make the big money. And just think you don't hit your peak earning year till you're 58. So if you want to retire early you will be missing your highest earning potential.

All I am saying is just think about it before you decide to take on 300k and have a plan to pay it off. Don't stay in a dead end associateship, don't wait more than 4 years to buy your first practice. Don't buy that practice in a saturated market.

 

[mahya]

Thanks for the honest point of view on the loans. It is true..before I join SDN I always thought that dentists make lots of money and they are always rich but now the reality is different especially with that much loan amount. I am also looking at that much loan amount and the only thing I aam hoping is for a scholarship and less loan..no other choice...feel bad..

You don't have to graduate school to be able to talk about paying back loans. However with all the mis-information about salaries on this board you just don't understand how little money you have the potential to earn. Those who haven't started paying loans off don't understand that 2k/month is a ton.

Everyone here seems to think they are going to have some million dollar practice and earn 300k per year and only work 4 days per week with 4 weeks vacation a year. Its not as easy as it looks. It takes many dentists years to earn over 120k.

I'm not trying to put anyone down or call anyone stupid, I just want you to understand that 300k in student loans is a lot.

And from a business point of view a dental student loan of 300k is a bad investment.
Its not like a house loan or a business loan where once the loan is paid off the property or business has appreciated.
If you are doing it b/c you have the potential to make good money then its a bad idea. To earn the big bucks you have to invest another 400-500k after school to purchase a practice. Then after 7 years of paying off that loan you finally make the big money. And just think you don't hit your peak earning year till you're 58. So if you want to retire early you will be missing your highest earning potential.

All I am saying is just think about it before you decide to take on 300k and have a plan to pay it off. Don't stay in a dead end associateship, don't wait more than 4 years to buy your first practice. Don't buy that practice in a saturated market.

 

[Cold Front]

And from a business point of view a dental student loan of 300k is a bad investment.
Its not like a house loan or a business loan where once the loan is paid off the property or business has appreciated.
If you are doing it b/c you have the potential to make good money then its a bad idea. To earn the big bucks you have to invest another 400-500k after school to purchase a practice. Then after 7 years of paying off that loan you finally make the big money. And just think you don't hit your peak earning year till you're 58. So if you want to retire early you will be missing your highest earning potential.

All I am saying is just think about it before you decide to take on 300k and have a plan to pay it off. Don't stay in a dead end associateship, don't wait more than 4 years to buy your first practice. Don't buy that practice in a saturated market.

It's all relative. I have seen successfull businesses (who invested alot of money in a venture) go out of business basically their business formulae didn't work. For dentistry, you get the oppertunity and room to enhance your career, an exceptional strategy is the key to do well and earn more. It will also help if you think positive, and worry less about educational debt - which will work itself out.

I disagree that $300K is a bad investment. For what you will get for that price, is priceless. Not to mention being respected as professional by others, creativity, flexibility, job security, and personal satisfaction.

Maybe you are right, everyone who will be taking out $300K debt will be financially doomed!

 

[dentalman]

Diagnodent- and then some rambling

I really appreciate you bringing some reality to the discussion of finances. $300,000 is an aweful lot of money. Starting salaries as a dentist are not the same, or anywhere near, the average pay an owner of a private practice makes. And if you start your own practice, you will have more debt, and no patients. If you buy a practice, you will have more debt. Don't get me wrong, I believe everything will be wonderful in the end, but it takes more hard work than what most people realize.

I do have to disagree with you when you say that educational debt is a "bad investment". Businesses spend millions of dollars on research and development for profits that won't be realized for years, or even decades. Education is a personal "research and development". It will not pay for itself immediately, but within 10-30 years it will pay for itself and more.

Of course, the huge amount of money it takes to start up means that you better enjoy what you are doing. It would be a bad investment if you dreaded going to work everyday. (Don't worry if you don't like most parts about dental school, though.) In other words, if you look at it only from a monetary standpoint (making money), it does not make sense. (Although the numbers do). But it is not like a stock that you buy that does all the work for you. YOU have to do all of the work to get the benefit, so you better enjoy it.

There are a lot of other good businesses ready to go that can make you a lot of money. They are called franchises. Take the same 500,000 - 750,000 for a dental education and practice and buy a macdonalds or quiznos subs. You can make great money owning these businesses, too, and perhaps you can hire someone to manage it and not even be there.

There, now I feel much better about having all of this debt. (Although I have happened to luck out by graduating with the lowest interest rates in about thirty years.) 2.7% sounds so much better than 6.8%.

 

[mahya]

after reading about all this..I just wish I was born 5 years earlier so I would be practicing by now!!!

 

[dentalman]

Don't we all. =)

 

[diagnodent]

Does anyone even read my posts or just pretend too.

I never said education debt is a bad investment. I said a 300k student loan for dental school is not smart unless you have a plan in which to pay it off. And for those that think they won't dread going to work everyday, I know plenty of dentist who do (I don't). If you can go for 180k or less it makes a huge difference. Plus, theres no consolidation of student loans which screws you too.

I'm 1 million+ in debt and it doesn't effect me. I make great money 250k and will cut my debt in less than half by the time I'm 35. Plus, I'll have a practice worth 600k. I love dentistry and everything it provides me and my family. I would do it again without any question.

Just have a plan. Don't get sidetracked.

 

[Mackchops]

In all fairness, it did sort of sound like you were claiming that 300k spent on education was a poor investment. Thanks for clarifying though -- you make a lot of sense.

I guess the key to all of this is the anticipation. Everyone wants to be a dentist NOW so they can start practicing and bring home oodles of cash in wheelbarrows. I know people who would have liked to specialize but chose not to because they just wanted to be done with school already. There are those people who buy the nice car, big home, and family dog STRAIGHT out of d-school who are just ready to get on with the "real life". MY personal, humble, and completely taken-with-a-grain-of-salt advice is to realize the reality of your situation out of d-school and live like a student for another couple of years. If you're making 100k a year and you choose to live on only a third of that (a lot more than most students I know!), then you have 70k a year to go to your loans. Do this for three years and then buy the practice, the house, the car. You'll be making more money and, because you ate away at your principle so early you'll end up paying a WHOLE lot less in interest in the long run. Easier said then done, I assume but that's my "plan" and I think it's a pretty responsible one.

Mack

 

[Hopin']

First of all, I thank everyone for contributing to this thread.

I've spoken to a few dentists and they certainly think that the 300K won't be bad once you get yourself going. First few years may be difficult when you earn minimum and have these loans to be taken care of. It all gets better. Ofcourse, it does make a difference where you get a job and where you practice. From what I understood, as long as I don't buy a Benz and a mansion right out of school, I should be fine with paying loans.
Moreover, out thousands of people apply to dental schools, only a few hundred actually get in. Such educational opportunity should not be missed simply due to future financial worry.
And as everyone else, I do too wish that I was born 5 years early. The educational loans were cheap back then. From what I heard on news, interest rate on federal stafford loans will jump more than 1.5% starting July1st.

 

[12YearOldKid]

If you're making 100k a year and you choose to live on only a third of that (a lot more than most students I know!), then you have 70k a year to go to your loans. Do this for three years and then buy the practice, the house, the car. You'll be making more money and, because you ate away at your principle so early you'll end up paying a WHOLE lot less in interest in the long run. Easier said then done, I assume but that's my "plan" and I think it's a pretty responsible one.

Mack

The flaw in your plan is that if you are making $100,000 you are not going to have $30,000 to live on and $70,000 to put towards loans. It will be more like
$30,000 to live on
$28,000 for state and federal taxes
$3000 for insurance and other professional expenses
$8 or 9,000 set aside for savings and investment

Leaving:

$30,000 for loan repayment - which is only a few thousand more than the annual minimum repayment.

It's easy to do monopoly money accounting showing how easy it will be to repay loans, but in real life that $300,000 is going to be hanging heavy over your head for many, many years.

 

[Mustt Mustt]

300K is a huge debt no matter what but if you only got accepted to one school that costs that much money and you don't have other options I think it is totally worth it. However, every dentist that I talked to said one thing, go to the cheapest possible school. They said it doesn't matter where you go. Your clinical and patient management skill is way way more important than the school you graduated from. 300K is a huge debt and people should not take it likely. However, it is definitely possible to pay that off and that is all that matters in a long rum. Rememer Dentistry as a career is a marathon not a 100 meter. I think only thing that I see misrepresented on this board is how easy it will be to pay the debt off. It won't be as easy as people make it out to be but it is possible. Most dentists reap their rewards in their 40's and early 50's. I think that if I had gotten in to say 300K only school I would have still gone without a second thought.

 

[melissamcg]

definitely go to the cheapest school possible..that was my dentist's advice to me too! When I found out I got into my state school (MCG) i accepted immediately because compared to the other private schools I applied to, MCG was definitely the cheapest. I also agree that not buying house/car as soon as you get out will definitely help in loan repayment.

 

[dentalman]

And from a business point of view a dental student loan of 300k is a bad investment.

I'm sorry for being confused. I was looking at the above sentence. I just wanted to say that from a business point of view, a dental student loan of 300K is a good investment, (and a dental student loan of 100K if of course a better investment.) Like I said, you are saying things with a more realistic attitude than most other people, which I appreciate.

 

[mdub]

but wouldn't you want to buy a house after year 1 to take the tax deduction.

Depends where you're buying. The tax deduction isn't nearly worth what lots of people think it is. First, it's a deduction, not a credit. It reduces your your income. That means a $10000 deduction might be worth around $3333 in tax savings. Second, it's subject to the 2% floor. So you might not get much of that $3333 if only $1500 is over the 2% floor. Third, many (maybe most) dentists will be subject to AMT.

In lots of metro areas housing is overvalued relative to rents for similar properties. There is no example in human economic history in which rents and housing have stayed disconnected over the long run. So, I wouldn't be particularly worried about buying a house if you're in, say, Miami, Phoenix, Las Vegas, California, etc. You'll almost certainly save money by renting the exact some house instead of buying it.

 

[mdub]

I disagree that $300K is a bad investment. For what you will get for that price, is priceless. Not to mention being respected as professional by others, creativity, flexibility, job security, and personal satisfaction.

It's not terribly difficult to figure out whether it's worth $300,000. Compare your net earnings after going the dental route with your next-best option, but don't forget to include the opportunity cost of 4 years of dental schools and $300,000 in loans (with interest).

For a lot of people that's going to be a good investment. But, unfortunately, it's becoming a worse investment (tuition is rising faster than wages and interest rates are climbing).

 

[mdub]

The flaw in your plan is that if you are making $100,000 you are not going to have $30,000 to live on and $70,000 to put towards loans. It will be more like
$30,000 to live on
$28,000 for state and federal taxes
$3000 for insurance and other professional expenses
$8 or 9,000 set aside for savings and investment

This is probably the best site for quickly determining your after-tax income: http://www.paycheckcity.com/netpaycalc/netpaycalculator.asp

 

[mahya]

This is probably the best site for quickly determining your after-tax income: http://www.paycheckcity.com/netpaycalc/netpaycalculator.asp

so if we assume some one that graduate by the year of 2010 and be hired as an assosicate for 100 K a year...the actual paycheck would be around 6 k a month and take 3k for the loans..you are left with only 3k to live with as a dentist..that is pretty harsh..but if the salary raises with the first two years..and I assume in the best case scenario a dentist buy a practice after 4 years he/she would be able to live moderately good but with all the debts I dont think a dentist would be able to make more than 8k a month!...(best case scenario))))

 

[dentalstudent1]

I've been getting really worried about my loans. I haven't even started the school yet and getting worried about upcoming loans worth of about $300K.
Any help you guys wanna offer me to ease up my tension???
Appreciate you guys in advance...

Thats alot of money. dont expect a good life after you graduate for at least 8 years.

If that sucks my advice is drop out now.

 

[dentalstudent1]

so if we assume some one that graduate by the year of 2010 and be hired as an assosicate for 100 K a year...the actual paycheck would be around 6 k a month and take 3k for the loans..you are left with only 3k to live with as a dentist..that is pretty harsh..but if the salary raises with the first two years..and I assume in the best case scenario a dentist buy a practice after 4 years he/she would be able to live moderately good but with all the debts I dont think a dentist would be able to make more than 8k a month!...(best case scenario))))

Associates are making 80 - 100.

Plan on makin 85.

 

[food4thots]

it seems people on this board either love the military or hate it.. i was wondering, why is it so bad that people hate it so much?

 

[dentalman]

I don't remember if anyone has brought up consolidation. So, make sure you consolidate your goverment loans this year. This is the last year to do an in-school consolidation. They are changing the regulations next year. They are also changing Stafford loans to a fixed 6.8% (either next year or the year after), so it would be a no-brainer to consolidate now.

Just wanted to make sure no one was overlooking this.

Although, most people with 300,000 probably have private loans, so good luck with the extra loans.

 

[Cold Front]

I don't remember if anyone has brought up consolidation. So, make sure you consolidate your goverment loans this year. This is the last year to do an in-school consolidation. They are changing the regulations next year. They are also changing Stafford loans to a fixed 6.8% (either next year or the year after), so it would be a no-brainer to consolidate now.

Does this apply to 1st year students?

thanks

 

[Mr.E]

Anyone out there who took out private students loans with less than perfect credit? What is your interest rate? I'm planning on taking out a private loan for the first year, and so far the interest rate is around 13%-14% without a cosigner. I'm wondering if anyone else is in the same situation?

 

[coreyb]

Anyone out there who took out private students loans with less than perfect credit? What is your interest rate? I'm planning on taking out a private loan for the first year, and so far the interest rate is around 13%-14% without a cosigner. I'm wondering if anyone else is in the same situation?

You might check with your school to see if they've bargained deals for their students.

For example, at NYU, they've negotiated a deal with citibank for private loans. The % they got is Prime-1%.

 

[Cold Front]

You might check with your school to see if they've bargained deals for their students.

For example, at NYU, they've negotiated a deal with citibank for private loans. The % they got is Prime-1%.

1%?

or minus 1%?

 

[coreyb]

Prime - 1% (minus)

I wish it was 1% only!!! I'd be borrowing the most the law allows!!



Prime rate today is 8%

 

[Mr.E]

You might check with your school to see if they've bargained deals for their students.

For example, at NYU, they've negotiated a deal with citibank for private loans. The % they got is Prime-1%.

Are you refering to the private loans that make up the difference between what is offered by Federal loans and what the school says is the limit on finacial aid? Or private loans that go directly to the borrower to help out with added expenses associated with school (i.e. loans like the Tuition Answer Loan offered by Salle Mae)? I found that the amount the school allows me to take out isn't sufficient to live on with a family, so I'll need aditional loans that do not limit the amount based on what the school dictates.

 

[12YearOldKid]

I'm planning on taking out a private loan for the first year, and so far the interest rate is around 13%-14% without a cosigner.

OUCH! I don't think my credit card charges that much interest.

 

[dentalman]

Does this apply to 1st year students?

thanks

Yes. They are changing the regulations, so this is the last year to do an in-school consolidation. (I am talking about your federal loans, not private). The rate is going up, so it only makes sense to consolidate. Do it through Direct loans (the federal govt.).

 

[coreyb]

Are you refering to the private loans that make up the difference between what is offered by Federal loans and what the school says is the limit on finacial aid? Or private loans that go directly to the borrower to help out with added expenses associated with school (i.e. loans like the Tuition Answer Loan offered by Salle Mae)? I found that the amount the school allows me to take out isn't sufficient to live on with a family, so I'll need aditional loans that do not limit the amount based on what the school dictates.

NYU sent their budget out. It totaled 81.5K, 38.5 of which is federal loans. The remainder (81.5-38.5=43K) was private. I applied for the citibank/nyu loan for more than the 43K and I am 'conditionally approved'.

That's about all I know so far.

 

[GuidoPedo]

I wish it was 1% only!!! I'd be borrowing the most the law allows!!

I consolidated all my loans form dental school at 2.87. Borrowers benefits: .25% reduction if you do direct withdrawal monthly to pay it, 1% if you pay 24 straight payments, another 0.5% reduction after 36 straight, and another 0.5% after 48.

So....after 4 straight years of payments, my loan of over 100K will be at the ripe interest rate of .62%

Gee, wonder if I'll take the full 30 years to pay it off!

 

[mahya]

I consolidated all my loans form dental school at 2.87. Borrowers benefits: .25% reduction if you do direct withdrawal monthly to pay it, 1% if you pay 24 straight payments, another 0.5% reduction after 36 straight, and another 0.5% after 48.

So....after 4 straight years of payments, my loan of over 100K will be at the ripe interest rate of .62%

Gee, wonder if I'll take the full 30 years to pay it off!

Seems like you are very lucky..100K with that 0.62% interest rate is awesome!!!

 

[12YearOldKid]

NYU sent their budget out. It totaled 81.5K, 38.5 of which is federal loans. The remainder (81.5-38.5=43K) was private. I applied for the citibank/nyu loan for more than the 43K and I am 'conditionally approved'.

That's about all I know so far.

Is this for one year?!!!