National Student Loans Debt Approaches $1.5T

[deleted659902]

100k/yr income is the new middle class for a single person thesedays

300k is the new "six figure salary"

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[Cold Front]

100k/yr income is the new middle class for a single person thesedays

300k is the new "six figure salary"

There is some truth to that. The middle class has been divided to upper middle class to lower middle class. Upper middle class is now synonymous with $100k+ income. About 25% of US households make $100k or more today. For a person to have the same purchasing power in 2018 as a $100,000 income earner in 1980 did, he or she would need to earn nearly $295,000 today. If you were a dentist in the 1980’s and you made a $100k income/yr, you really had as equal purchasing power and quality of life (adjusted for technology and other upgrades in life) as a dentist who makes $300-400k income today. You see, many dentists who were practicing in the 1980’s are still practicing today and have been the standard bearers of the profession’s income and quality of life - until healthcare cost and student loans outpaced inflation at an outrageous rate (and still is) since the 1980’s.

Back to the original point, there are many jobs today that make $100k a year and don’t require student loans and can happen in your early 20’s. They might not be economic proof jobs, but they can provide as equal purchasing power and quality of life as a dentist who went to school for 8 years and with $300-500k in student loans. That’s the level dentistry has reached in income terms today, and I don’t see it getting better in the foreseeable future.

 

[Truthaboutdental]

If you are about to graduate as a GP and have an opportunity to work in a different field and make up to 250K (lower base salary to start) within 3-4 years leaving open weekends to practice dentistry as well if you really wanted to. Would you take that opportunity?

 

[charlestweed]

What about Computer science or accounting? Everyone is gonna need someone to crunch numbers.

Are there other areas of healthcare you recommend to younger generations besides medicine and dentistry? Like Physical therapy or Podiatry?

Seems that Physicians assistant is a hot commodity right now. Only two years after undergrad and they make around 100-120K/year.

I don’t know much about computer science nor about accounting. When I first came to my accountant’s office back in 2003, I noticed that he drove a $100+k Mercedes Benz SL500. He got his MS degree in taxation at USC. He also owns a large strip mall + a yogurt store + a few other properties. I later found out that he is also real estate agent, when he represented a client to sell a 4-plex apartment to my sister. According to my sister, he also has a contractor license. The guy is a workaholic. He hires an associate CPA, who has helped prepare all the tax returns for me. And that associate CPA of his has worked there for 20+ years and he drives an old Honda Accord. So just like dentists, not all CPAs are created equal….some work harder than others….some are more successful than others.

I think nursing is a good field if one doesn’t have good enough grades for pharmacy, dental or med schools. Many of the parents of my kids’ friends at their schools are nurses. These parents must do very well since these private Catholic HS schools charge at least $17k a year. The reason I strongly recommend dentistry and medicine is not only they are prestigious professions but you also get to be your own boss....don’t have to worry about getting fired…..no one tells you what to do.

Job availability and job stability are also very important. When got laid off, many people had to move to different states to get new jobs that pay similar wages because they didn’t have any other choices. Some couldn’t move because of their spouses’ jobs or their kids’ schools and had to settle for some low paying jobs that are totally unrelated to their college degrees. For example, my brother-in-law, who was an engineer for Boeing, now goes door to door to sell solar panels. For dentistry and medicine, you can live wherever you want. There are plenty of dental associate jobs here in CA if you want to live in CA…..you may not make as much as your colleagues in other states….but it’s still a 6-figure income.

 

[Cold Front]

If you are about to graduate as a GP and have an opportunity to work in a different field and make up to 250K (lower base salary to start) within 3-4 years leaving open weekends to practice dentistry as well if you really wanted to. Would you take that opportunity?

If the goal is to make $250k+ within 3-4 years, I would still stick to dentistry. Assuming you can avoid saturated areas and open to building or buying a practice. Even if you just do associateship, with 3-4 years experience under your belt, you will be able to produce a net of $250k under a favorable contract at either corporate or private practice. You will have to payback your dental student loans either way, whether you work in a different field or not.

 

[Cold Front]

I don’t know much about computer science nor about accounting. When I first came to my accountant’s office back in 2003, I noticed that he drove a $100+k Mercedes Benz SL500. He got his MS degree in taxation at USC. He also owns a large strip mall + a yogurt store + a few other properties. I later found out that he is also real estate agent, when he represented a client to sell a 4-plex apartment to my sister. According to my sister, he also has a contractor license. The guy is a workaholic. He hires an associate CPA, who has helped prepare all the tax returns for me. And that associate CPA of his has worked there for 20+ years and he drives an old Honda Accord. So just like dentists, not all CPAs are created equal….some work harder than others….some are more successful than others.

I think nursing is a good field if one doesn’t have good enough grades for pharmacy, dental or med schools. Many of the parents of my kids’ friends at their schools are nurses. These parents must do very well since these private Catholic HS schools charge at least $17k a year. The reason I strongly recommend dentistry and medicine is not only they are prestigious professions but you also get to be your own boss....don’t have to worry about getting fired…..no one tells you what to do.

Job availability and job stability are also very important. When got laid off, many people had to move to different states to get new jobs that pay similar wages because they didn’t have any other choices. Some couldn’t move because of their spouses’ jobs or their kids’ schools and had to settle for some low paying jobs that are totally unrelated to their college degrees. For example, my brother-in-law, who was an engineer for Boeing, now goes door to door to sell solar panels. For dentistry and medicine, you can live wherever you want. There are plenty of dental associate jobs here in CA if you want to live in CA…..you may not make as much as your colleagues in other states….but it’s still a 6-figure income.

My accountant (late 60’s by age) has 600 +/- corporation (LLC, S-Corp, etc) accounts and does 300 +/- individual accounts. He charges $350 a month for the corporations and $300 a year to file for individuals. His revenue is about $2.5M a year and has about 6 employees. The only overhead he has is payroll for his employees, his rent and utilities.... and tons of A4 papers. His net is definitely $1M a year, but it took him a very very very long time to get to that income level. I pay him $10k a year to just do my Schedule C’s and E’s, and I only see him once a year. He is worth every penny for what I end up paying to Uncle Sam.

 

[Cold Front]

What about Computer science or accounting? Everyone is gonna need someone to crunch numbers.

Are there other areas of healthcare you recommend to younger generations besides medicine and dentistry? Like Physical therapy or Podiatry?

Seems that Physicians assistant is a hot commodity right now. Only two years after undergrad and they make around 100-120K/year.

This may not answer your question, but FedEx experienced pilots make $300k a year, and the world will need some 800,000 pilots in about 15 years, by 2035.

FedEx Is So Desperate for Pilots This Holiday Season It's Paying Them Up to $110,000 to Delay Retirement

 

[Nachatta]

To the dentists ITT: I turned down an out of state private to go instate debt free (step 1 done, I suppose). Money that was gonna go towards out of state tuition is now going towards dschool + potential residency, hoping to end up very close if not debt free from dental school.

For a stupid predent like me, what would y'all suggest I do now to put myself in a good position in terms of the market (recession, issues with insurance, saturation/corporate "takeover") for the future?

 

[2TH MVR]

To the dentists ITT: I turned down an out of state private to go instate debt free (step 1 done, I suppose). Money that was gonna go towards out of state tuition is now going towards dschool + potential residency, hoping to end up very close if not debt free from dental school.

For a stupid predent like me, what would y'all suggest I do now to put myself in a good position in terms of the market (recession, issues with insurance, saturation/corporate "takeover") for the future?

Sounds like you are off to a good start. My advice is to stay away from the saturated urban markets. In urban cities ... there are literaly dental practices (private and Corp) on every corner. I just do not know how you can thrive in saturated areas. I work Corp now in a saturated area after having my own practice for 25 years. I can tell you that the Corp I work for is experiencing lower revenue relative to the past as a result of the saturation. The Corps are competing with each other now. Corps are aggressive and will be redefining themselves to the changing market.

Do your homework. Find a medium sized town with fewer Corp entities and private dentists. Practice where no one wants to practice. Have your own private practice. Pros and cons to every choice though. Rural area maybe less inviting than a popular urban area. Less culture. Sports teams. Nice weather. Beaches. Etc. ETc. It all depends on your family situation and your desires.

 

[charlestweed]

This may not answer your question, but FedEx experienced pilots make $300k a year, and the world will need some 800,000 pilots in about 15 years, by 2035.

FedEx Is So Desperate for Pilots This Holiday Season It's Paying Them Up to $110,000 to Delay Retirement

It must be very hard for the pilot's wife and kids because he has to work away from home very frequently. I sold my office (a leasehold sale) to a new grad orthodontist, who was a pilot before he switched to dentistry.

 

[charlestweed]

To the dentists ITT: I turned down an out of state private to go instate debt free (step 1 done, I suppose). Money that was gonna go towards out of state tuition is now going towards dschool + potential residency, hoping to end up very close if not debt free from dental school.

For a stupid predent like me, what would y'all suggest I do now to put myself in a good position in terms of the market (recession, issues with insurance, saturation/corporate "takeover") for the future?

Learn as much as you can while in school. Maintain good grades and high class rank so you’ll have the option to specialize later on.

When you graduate, learn to keep the overhead as low as possible. With low overhead, you can set up your practice anywhere and will be successful.

 

[Gyuji]

This may not answer your question, but FedEx experienced pilots make $300k a year, and the world will need some 800,000 pilots in about 15 years, by 2035.

FedEx Is So Desperate for Pilots This Holiday Season It's Paying Them Up to $110,000 to Delay Retirement

Isn't the pilot shortage caused by debt of becoming a licensed commercial pilot?

 

[AppalachianDentalBoy]

This may not answer your question, but FedEx experienced pilots make $300k a year, and the world will need some 800,000 pilots in about 15 years, by 2035.

FedEx Is So Desperate for Pilots This Holiday Season It's Paying Them Up to $110,000 to Delay Retirement

The path to becoming a pilot isn't so rosy. This video explains why there is a pilot shortage but the gist is you need a college degree, the license costs and cost of training hours is incredibly high, and starting jobs are regional airlines are about $30k/year. Then the hours are terrible.

 

[desertrat12]

The path to becoming a pilot isn't so rosy. This video explains why there is a pilot shortage but the gist is you need a college degree, the license costs and cost of training hours is incredibly high, and starting jobs are regional airlines are about $30k/year. Then the hours are terrible.

Agreed, my poor buddy wanted to be a pilot but just ran out of money paying for school, flight miles, etc...really a sad story of dreams squashed. Oh but then he decided to join a trade, no more debt, and now makes 6 figures. All while I rake up more d school debt. I guess his story isn’t too sad after all.

 

[charlestweed]

The path to becoming a pilot isn't so rosy. This video explains why there is a pilot shortage but the gist is you need a college degree, the license costs and cost of training hours is incredibly high, and starting jobs are regional airlines are about $30k/year. Then the hours are terrible.

Wow, the path to become a well paid pilot seems to be more difficult, more time consuming, and more costly than the path to become a dentist. At least being a dentist, you are guaranteed a 6-figure income right after graduation......no experience necessary. People keep saying there are plenty of 6-figure income jobs out there that don’t require years of education in professional schools.... that are stable.... that are easy to find. I haven’t seen one yet.

 

[Cthuluhoop]

As a pre-dent who is waitlisted at their state school, the cheapest program I got into just over $400,000. I'm a non-traditional applicant, I'll be 30 by the time I start working as a dentist and working through that debt in my mid 30s to 40s, assuming a wife and kid and mortgage seems intense. Even with a working spouse, it doesn't seem like a great way to live for 10-15 years.

For the current dentists here, is it even possible for every single dental student who graduates to enter private practice at some point? I think we're around 6000 dentists per year graduating, it doesn't seem feasible that even a large percentage of those students can eventually open a practice without even more saturation.
And how many of your peers failed opening a practice? Private practice seems like an immense amount of work to get into and learn, so it'd be surprising to see everyone who tries it succeed at it

 

[Cold Front]

For the current dentists here, is it even possible for every single dental student who graduates to enter private practice at some point?

To give you a perspective, Aspen Dental (corporate chain) hires roughly 1 in 10 graduating dentists. This is just 1 corporate chain out of few dozen chains. It’s estimated that 1 in 2 graduating dentists start at a corporate office as their first gig, but the majority eventually move on in a year or so to either private practice or to a different corporate office. More and more older retiring dentists are selling their practices to a corporation, which leaves fewer offices to buy for younger dentists every year. Corporations are now fighting each other over offices and markets, so it’s a seller’s market for the metro areas. Again, this is the trend that will continue, just like student loans are getting worse. I turned down couple offers from corporate chains to buy my offices, and I’m still early in my career. When I do sell my practices, I will sell it to the highest corporate office bidder, which unfortunately is what anyone in my shoes would, and not to a young dentist who will try to get a bargain deal. This is the reality.

 

[charlestweed]

As a pre-dent who is waitlisted at their state school, the cheapest program I got into just over $400,000. I'm a non-traditional applicant, I'll be 30 by the time I start working as a dentist and working through that debt in my mid 30s to 40s, assuming a wife and kid and mortgage seems intense. Even with a working spouse, it doesn't seem like a great way to live for 10-15 years.

For the current dentists here, is it even possible for every single dental student who graduates to enter private practice at some point? I think we're around 6000 dentists per year graduating, it doesn't seem feasible that even a large percentage of those students can eventually open a practice without even more saturation.
And how many of your peers failed opening a practice? Private practice seems like an immense amount of work to get into and learn, so it'd be surprising to see everyone who tries it succeed at it

Starting at 30 is not too bad. If you were a traditional student, you would start working at 26. So you are only 4 years late. Yes, you will have to work very hard in your 30s, 40s, 50s and maybe even in your 60s (if you continue to work as an associate and don’t have your own office) to pay back the debt, to save/invest for future retirement, and to support your family at the same time. Yes, you’ll need to have a hard working, loving, and supportive wife. Being a dentist should help you find the right person…..a nice responsible person always wants to marry a man, who is not a loser and is capable of supporting his family. I hope you’ll get accepted to the school of your choice.

 

[charlestweed]

Coldfront, I wonder why you think it’s not worth pursuing dentistry anymore when you, yourself, are doing very well as a general dentist. If I remember correctly, you graduated from Boston U, a very expensive school, not too long ago….5-6 years ago? You graduated at the time when the country was in a recession. You had worked for Aspen Dental for a couple of months and then you started your own office from scratch. A year later, you started a second office. Now you only work 2.5 days/week. I still work 5 days/week and on weekends. I don’t make anywhere near what you make even though I graduated many years before you. Because of many good success stories like yours, mine, my sister's and my dental colleagues’, I still think dentistry is a great profession and is worth spending the extra 4 years (after college) and money to pursue it. Why do you think the new dental grads, who will have slightly higher debt than yours, will have much harder time to succeed?

 

[Cold Front]

Coldfront, I wonder why you think it’s not worth pursuing dentistry anymore when you, yourself, are doing very well as a general dentist. If I remember correctly, you graduated from Boston U, a very expensive school, not too long ago….5-6 years ago? You graduated at the time when the country was in a recession. You had worked for Aspen Dental for a couple of months and then you started your own office from scratch. A year later, you started a second office. Now you only work 2.5 days/week. I still work 5 days/week and on weekends. I don’t make anywhere near what you make even though I graduated many years before you. Because of many good success stories like yours, mine, my sister's and my dental colleagues’, I still think dentistry is a great profession and is worth spending the extra 4 years (after college) and money to pursue it. Why do you think the new dental grads, who will have slightly higher debt than yours, will have much harder time to succeed?

Yes, I graduated from BU 8 years ago. My first year of dental school was 2006, and I remember it was about $40k a YEAR (not including supplies and fees). Today, for 2018-2019, it’s $40k a SEMESTER (before supplies and fees, which have also gone up). The student loan interest rate have gone up since, the cost of living has gone up, the unsubsidized loans during school have been eliminated, etc. Relative to my student debt/starting income ratio back in 2010 versus today, the gap or spread is getting worse - I project to even get worse for the next 5-10 years because I don’t see a relief in place to help future dentists have more net in their pockets after their expenses and taxes come off their paycheck the first few years out of dental. Yes, I’m an exception, because I graduated during a recession when student loan interest rates were lower and subsidies were in place to freeze interest rates while I was in school, it was easier to open a practice because bank loans were cheaper and construction and materials were cheaper, and I lucked out for living in Midwest city with relatively cheap cost of living. Times have changed. If I could do it all over today and become a dentist and build shops and get into real estate through the dental path, I personally wouldn’t, based on what I know today. I might have said in previous posts that “dentistry is still a good gig” a year or 2 ago, but it wasn’t since then that I realized we are no where near the cost of becoming dentist is slowing down. It’s actually going up irrespective to what the other indicators of our economy is doing. You can wait for house prices to come down after they go up, but you can’t wait to become a dentist with the current one-way street of rising student loans and interest rates, and also the rise of undergraduate and post-graduate debt all at the same time. We can all sharpen our pencils and write these numbers down, but almost all of us would agree that the dentistry path has become too expensive and would almost be “rolling the dice” for a pre-dent who didn’t have the same lower cost and benefits that you and I did 8-15 years ago. That’s all I’m saying.

 

[charlestweed]

Yes, I graduated from BU 8 years ago. My first year of dental school was 2006, and I remember it was about $40k a YEAR (not including supplies and fees). Today, for 2018-2019, it’s $40k a SEMESTER (before supplies and fees, which have also gone up). The student loan interest rate have gone up since, the cost of living has gone up, the unsubsidized loans during school have been eliminated, etc. Relative to my student debt/starting income ratio back in 2010 versus today, the gap or spread is getting worse - I project to even get worse for the next 5-10 years because I don’t see a relief in place to help future dentists have more net in their pockets after their expenses and taxes come off their paycheck the first few years out of dental. Yes, I’m an exception, because I graduated during a recession when student loan interest rates were lower and subsidies were in place to freeze interest rates while I was in school, it was easier to open a practice because bank loans were cheaper and construction and materials were cheaper, and I lucked out for living in Midwest city with relatively cheap cost of living. Times have changed. If I could do it all over today and become a dentist and build shops and get into real estate through the dental path, I personally wouldn’t, based on what I know today. I might have said in previous posts that “dentistry is still a good gig” a year or 2 ago, but it wasn’t since then that I realized we are no where near the cost of becoming dentist is slowing down. It’s actually going up irrespective to what the other indicators of our economy is doing. You can wait for house prices to come down after they go up, but you can’t wait to become a dentist with the current one-way street of rising student loans and interest rates, and also the rise of undergraduate and post-graduate debt all at the same time. We can all sharpen our pencils and write these numbers down, but almost all of us would agree that the dentistry path has become too expensive and would almost be “rolling the dice” for a pre-dent who didn’t have the same lower cost and benefits that you and I did 8-15 years ago. That’s all I’m saying.

It has already been 8 years? I can’t believe how fast time has flown by. You have accomplished a lot during these 8 years. Am I correct to assume that you are able to get to where you are today in such a short amount of time because of your good dental income that allowed you to buy stocks and commercial properties? And without such good income and good credit score, you wouldn’t have been able to acquire those properties?

If today new ortho grad, who is in his/her early 30s, can make just half as much as what I make right now (due to over-saturation, less job availability, invisalign, 6 month smile, smile direct club, GPs doing ortho etc), I consider this a success story. This person should have no problem paying back $5-600k student loan. He/she should have a very comfortable lifestyle.

 

[Cold Front]

It has already been 8 years? I can’t believe how fast time has flown by. You have accomplished a lot during these 8 years. Am I correct to assume that you are able to get to where you are today in such a short amount of time because of your good dental income that allowed you to buy stocks and commercial properties? And without such good income and good credit score, you wouldn’t have been able to acquire those properties?

If today new ortho grad, who is in his/her early 30s, can make just half as much as what I make right now (due to over-saturation, less job availability, invisalign, 6 month smile, smile direct club, GPs doing ortho etc), I consider this a success story. This person should have no problem paying back $5-600k student loan. He/she should have a very comfortable lifestyle.

Yes, time does fly. It will be 9 years in about 4 months. I leveraged my offices, which then allowed me to secure financing for the buildings the practices are in. I did that my first 5 years out of school. My credit was shot before dental school and I had a lot of negative items on my report - let’s just say I didn’t care about my credit until my third year of dental school, when I realized that was a big key to approaching banks. So I joined couple of big credit discussion forums (CreditBoards and MyFico boards) while I was in dental school to help me fix and learn a lot about credit scores and reports. My credit score was in the low 500’s before dental school, and later jumped to high 700’s by graduation - thanks to a CapitalOne unsecured credit card with a $200 limit that helped me get there.

I agree. Student loans can be paid back, or the student loans bubble would have bursted by now. Personally, for every couple of dentists who get lucky and quickly breakaway from the student loans burden, there are probably 4-5 who don’t. My concern is that those 4-5 dentists turning to 7-8 dentists who are shackled by student debt. There is a reason why IBR is increasingly becoming the most popular form of repayment for new grads.

 

[2TH MVR]

The telling sign for me is the saturation. 20 yrs ago .... There was little saturation in the Phoenix metro area. About that time I started a 2nd office in a new area of town. I was the only orthodontist within a 5 mile radius. Maybe 3-4 GPs. Same location now. 5-6 Corp offices offering ortho along with general dentistry. Must be another 8-10 private gp offices. All within 5 miles. Corp influence is a large part of the saturation.
Go rural.

 

[Cold Front]

The telling sign for me is the saturation. 20 yrs ago .... There was little saturation in the Phoenix metro area. About that time I started a 2nd office in a new area of town. I was the only orthodontist within a 5 mile radius. Maybe 3-4 GPs. Same location now. 5-6 Corp offices offering ortho along with general dentistry. Must be another 8-10 private gp offices. All within 5 miles. Corp influence is a large part of the saturation.
Go rural.

DSOs grow about 14% year to year, while private practices grow 7%. Unlike private practices, corporations are future oriented and continuously pushing their businesses to learn from the evolving dental market and steer away from the status quo, a change that requires a lot of resources and time.

 

[charlestweed]

The corp offices continue to expand and no one can do anything about it. Corp offices are like a double edged sword: they compete against the private practice owners but they also provide employment opportunities for the new grads who are not ready to set up their own offices and have high student loan debt. New grads need to learn to adapt. They don’t need to go rural in order to survive. How?

1. Set up a low overhead office to compete against the corp offices by offering better customer services (less wait time, friendlier staff, better clinical results etc) at the same low fee and with the same convenient office hours (late and weekend hours). Learn to multitask and hire as few employees as possible to save in overhead. Hire P/T employees. Order all the supplies by yourself to control cost. Avoid buying fancy high tech stuff that most patients don’t really care or know about etc.

2. If your office doesn’t have enough patients to keep the appointment book full every day, try to book as many patients in one day (most patients prefer weekend appointments) as possible and you only need to work a few days in a week. Hire only P/T employees (it’s easier to find P/T workers in large metro areas). For the other free days in the week, find a P/T job at the corp to supplement your income. Many P/T general dentists, whom I work with at the corp, also have their own offices. I know this one orthodontist, who has his own private practice in a rural area in Utah and he flies to Azizona to work P/T for Western Dental. I don’t need to fly anywhere since there are already so many corp offices here in CA.

 

[Cold Front]

I know this one orthodontist, who has his own private practice in a rural area in Utah and he flies to Azizona to work P/T for Western Dental. I don’t need to fly anywhere since there are already so many corp offices here in CA.

Speaking of Western Dental (who has 250 offices)... announced today that they will be buying another DSO with 63 offices. Bringing their network to over 300 offices. Heartland Dental still holds DSO pole position, with 900 locations - they recently added another dozen within the last month.

Western Dental Enters Into Definitive Agreement to Acquire a DSO Supporting 63 Dental Offices in California, Texas, and Alabama