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→→→ The Dental Debt Megathread ←←←

artist2022

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Hey guys, it was suggested to have a place where any and all topics about debt could be directed to, instead of having tons of them flood the forum OR having other threads hijacked just to talk about debt, sooooo let's try this thread out.

I won't backtrack and direct things here, but going forward, try to keep all discussions about finances/debt/costs/etc. in this thread!

Let's see how this works out :)


& thanks to @hersh_98 for the idea!
 
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Ladm8

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Good news for students taking loans this upcoming year. Federal Student Loan Interest rates on loans for 2020-2021 were just announced today. Nice drop in Federal interest rates, still too high compared to the private lending market, but obviously the federal one comes with certain protections :)

Old rates 2019-2020NEW rates 2020-2021
Federal Unsubsidized Loan6.08%4.3%
Grad Plus Loan7.08%5.3%
 
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spdental

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What do you think about taking a loan from Sallie mae or Wells Fargo at the moment with interest rates being lowered ?

If you take out any private loans they won't qualify for PAYE/REPAYE or any governmental assistance after school.

For example, if all student loans were suddenly eradicated because of some crazy event, this would only be governmental loans and not private loans.
 
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Pablo Sanchez

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Thoughts on taking out max amount of loans this year and using the extra to pay off loans that I have on 7% interest from last year?

It depends on a couple of factors. How long do you plan on taking to pay back your student loans and would you be taking out a Grad PLUS loan anyway? If, for example, you wouldn't normally take out a Grad PLUS loan, but you are taking a Grad PLUS loan out just to pay a 5.3% interest rate instead of your previous rate of 7%, it probably isn't worth it because of the 4.248% origination fee you'd be paying for the Grad PLUS loan. If you are going to be taking out a Grad PLUS loan regardless, then I would say that it is probably worth it. Likewise, the longer you plan on it taking for you to pay back your student debt, the larger a difference the lower interest rate is going to make for you.
 
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Alpha Centauri

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Good news for students taking loans this upcoming year. Federal Student Loan Interest rates on loans for 2020-2021 were just announced today. Nice drop in Federal interest rates, still too high compared to the private lending market, but obviously the federal one comes with certain protections :)

Old rates 2019-2020NEW rates 2020-2021
Federal Unsubsidized Loan6.08%4.3%
Grad Plus Loan7.08%5.3%
I don't even think we will have to pay any interest in the time being if new legislation pops up. These lower rates are an awesome bonus
 
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Pablo Sanchez

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You’re 100% sure about this?
Yep. Interest rates are set each year and are applied to the loan taken out that year. Although, for the time being the interest rate is 0% on all student loans due to covid. It still isn't clear how long that 0% will apply. Once the government decides the covid relief is no longer necessary your rates will pop back up to the rate that was decided for the year your loan was taken out.
 
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gunner4ever

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Yep. Interest rates are set each year and are applied to the loan taken out that year. Although, for the time being the interest rate is 0% on all student loans due to covid. It still isn't clear how long that 0% will apply. Once the government decides the covid relief is no longer necessary your rates will pop back up to the rate that was decided for the year your loan was taken out.
 

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Pablo Sanchez

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I emailed financial aid about this. Doesn't apply because we start school before July. But I'm not sure if we could the new rate before Fall quarter? Seems like no tho because they said 4th year
If your school disperses a separate loan for the summer and fall terms, then I would expect the new interest rate to apply to your fall loans. That email makes it seem like they give you all of your money for the summer and fall now, in which case you'll have to wait until next year. I'd try to check with your dental school itself, though, because it has been my experience that often times the university financial aid office is being run by highly incompetent people.
 

gunner4ever

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If your school disperses a separate loan for the summer and fall terms, then I would expect the new interest rate to apply to your fall loans. That email makes it seem like they give you all of your money for the summer and fall now, in which case you'll have to wait until next year. I'd try to check with your dental school itself, though, because it has been my experience that often times the university financial aid office is being run by highly incompetent people.

So I got all the details.

Once a loan is originated, it's for the entire school year, even tho it is disbursed at the start of each quarter. The only way to get the new rate for people in my shoes is to not take any loans for Summer and pay on your own, and then start loans again in Fall.

However, I'm wondering if there's any chance that they will reduce the rate of the old loans to this new rate. I suppose it's possible. Anyone have any insight on that?
 
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Pablo Sanchez

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So I got all the details.

Once a loan is originated, it's for the entire school year, even tho it is disbursed at the start of each quarter. The only way to get the new rate for people in my shoes is to not take any loans for Summer and pay on your own, and then start loans again in Fall.

However, I'm wondering if there's any chance that they will reduce the rate of the old loans to this new rate. I suppose it's possible. Anyone have any insight on that?
Reduce the rate on old loans? HA! No chance. When you take out a loan you sign a contract. They want their money.
 
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spdental

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So I got all the details.

Once a loan is originated, it's for the entire school year, even tho it is disbursed at the start of each quarter. The only way to get the new rate for people in my shoes is to not take any loans for Summer and pay on your own, and then start loans again in Fall.

However, I'm wondering if there's any chance that they will reduce the rate of the old loans to this new rate. I suppose it's possible. Anyone have any insight on that?

I mentioned this earlier as a question but I think the only way is to take out max amount of loans now and use the remainder money you have to pay down past loans. Make sure that the loan you are taking out has a less interest rate than the one you are paying down (which it should if you're taking out loans this year to pay down your loans from last year).
 
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To show the difference with numbers. If you take a loan of 400k and pay it over 10 years, you pay $157k in interest for a 7% interest rate. With a 5% interest rate, you pay $109k. That's a sizable difference, you save about 50k.

That being said I hope pre-dents don't think this change in interest rates means they can borrow 500k+ now, because the debt is still very real
 
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dababy123

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How likely will the interest rate decrease after this year, and the next, etc? Im wondering if it's smart to pull out the max amount of loans right now (even if may not need all of it for the upcoming year) because of the low interest rate to prevent taking out too many loans the following years which may have a higher interest rate.
 

Blueshirts

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How likely will the interest rate decrease after this year, and the next, etc? Im wondering if it's smart to pull out the max amount of loans right now (even if may not need all of it for the upcoming year) because of the low interest rate to prevent taking out too many loans the following years which may have a higher interest rate.
Keep an eye on whether or not the government extends the no interest rate accrual beyond September, that should be a better indicator than what the expected interest rates will be, but what will the rates be next year? unsure because that relates to long term investor confidence, I guess we will see what happens if people stop making big long term purchases or if lenders put up too many roadblocks for loans
 
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Gymgivitis

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So I got all the details.

Once a loan is originated, it's for the entire school year, even tho it is disbursed at the start of each quarter. The only way to get the new rate for people in my shoes is to not take any loans for Summer and pay on your own, and then start loans again in Fall.

However, I'm wondering if there's any chance that they will reduce the rate of the old loans to this new rate. I suppose it's possible. Anyone have any insight on that?
What if you took a private loan to pay for the Summer semester since the interest rates at banks are currently low. Then took the FAFSA loan out for the Fall/Spring of this coming year (after the start of the new interest rates). Then applied normally for the 2021-2022 FAFSA loan next Summer (also at the reduced interest rates). Could you benefit from the CAREs Act for two years if you did this? Just spit-balling an idea. I'm not sure if this is possible/practical. (I'm in the same boat as you). If anyone has insight please let me know
 

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To show the difference with numbers. If you take a loan of 400k and pay it over 10 years, you pay $157k in interest for a 7% interest rate. With a 5% interest rate, you pay $109k. That's a sizable difference, you save about 50k.

That being said I hope pre-dents don't think this change in interest rates means they can borrow 500k+ now, because the debt is still very real
I think that the 3% increase over 4 years will bring the interest rate drop savings to near 0 give or take
 

ToothJockey

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I think that the 3% increase over 4 years will bring the interest rate drop savings to near 0 give or take
Right but the interest rate is on top of the 3% tuition increase. To compare, imagine having 3% increase in tuition combined with 7% interest rate. Now instead it is 5%.

So bottom line is no matter what your tuition is, it's nice to have a lower interest rate on your loans. That being said, a lower interest rate shouldn't be a justification to borrow more money. Otherwise you're right back where you started (or possibly even worse off)
 
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Cavity_Search

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Watched a loan counseling CE the other day and the dental school loan specialist said stay away from Common Bond loans (the ones that are constantly advertised everywhere for dental students) because they have a VARIABLE interest rate. You want a low FIXED rate. Good to read up on if you are unsure about private loans.
 
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SDN is a safe space. If dental students don't want hear about their balloon student debt, they deserve the courtesy of burying their heads in the sand.

Or perhaps future dentists should take responsibility and plan on working hard to pay off the debt and make lots of money. Debt can be daunting as a student, but as a working professional dentist, it's not so bad if you have a strategy and willing to stick to it.
 
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So the solution for average debt load is to become a top 5% producer? o_O

What is a top 5% producer (the cutoff)? I don't think that you need to be a 5% producer to pay off a 500k loan. Then again, at what income level would you need to pay off 500k? If these debt circumstances are that bad, then the fear of failure should be sufficient to get people off their butts to produce.
 
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Biofilm preventer

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Hey guys, it was suggested to have a place where any and all topics about debt could be directed to, instead of having tons of them flood the forum OR having other threads hijacked just to talk about debt, sooooo let's try this thread out.

I won't backtrack and direct things here, but going forward, try to keep all discussions about finances/debt/costs/etc. in this thread!

Let's see how this works out :)


& thanks to @hersh_98 for the idea!
i believe there should be a whole forum just for debt. when anyone has any debt related questions. having just 1 thread will mean alot of questions will get lost in the constant comments and replies that these threads usually produce, leaving many new comments and then people just skimming through.

So debt related to its own forum --- which is arguably the biggest factor of dental related topics is debt --- should have its own location in the forum topics . Pre- Dental, DAT Related - Debt related etc...

also, this would make alot of pre dents more cautious about just signing up for dental school with out taking debt into account because they will see all the articles on debt from students and or recent graduates and they will see it is very much indeed real.
 
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Blueshirts

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i believe there should be a whole forum just for debt. when anyone has any debt related questions. having just 1 thread will mean alot of questions will get lost in the constant comments and replies that these threads usually produce, leaving many new comments and then people just skimming through.

So debt related to its own forum --- which is arguably the biggest factor of dental related topics is debt --- should have its own location in the forum topics . Pre- Dental, DAT Related - Debt related etc...

also, this would make alot of pre dents more cautious about just signing up for dental school with out taking debt into account because they will see all the articles on debt from students and or recent graduates and they will see it is very much indeed real.
Good idea
 
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Dentalboithrowaway69

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i believe there should be a whole forum just for debt. when anyone has any debt related questions. having just 1 thread will mean alot of questions will get lost in the constant comments and replies that these threads usually produce, leaving many new comments and then people just skimming through.

So debt related to its own forum --- which is arguably the biggest factor of dental related topics is debt --- should have its own location in the forum topics . Pre- Dental, DAT Related - Debt related etc...

also, this would make alot of pre dents more cautious about just signing up for dental school with out taking debt into account because they will see all the articles on debt from students and or recent graduates and they will see it is very much indeed real.
I agree
 
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golfdmd

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i believe there should be a whole forum just for debt. when anyone has any debt related questions. having just 1 thread will mean alot of questions will get lost in the constant comments and replies that these threads usually produce, leaving many new comments and then people just skimming through.

So debt related to its own forum --- which is arguably the biggest factor of dental related topics is debt --- should have its own location in the forum topics . Pre- Dental, DAT Related - Debt related etc...

also, this would make alot of pre dents more cautious about just signing up for dental school with out taking debt into account because they will see all the articles on debt from students and or recent graduates and they will see it is very much indeed real.
A forum was the original idea but the mods thought a mega thread would work better. Maybe if it gets enough traction they'll be down to create one
 
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artist2022

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i believe there should be a whole forum just for debt. when anyone has any debt related questions. having just 1 thread will mean alot of questions will get lost in the constant comments and replies that these threads usually produce, leaving many new comments and then people just skimming through.

So debt related to its own forum --- which is arguably the biggest factor of dental related topics is debt --- should have its own location in the forum topics . Pre- Dental, DAT Related - Debt related etc...

also, this would make alot of pre dents more cautious about just signing up for dental school with out taking debt into account because they will see all the articles on debt from students and or recent graduates and they will see it is very much indeed real.
Everyone wants different forums made for different things, but before we talk about making a new forum (or in this case, it would be a sub-forum), we have to decide if there'd be enough threads/posts in that forum to be valuable, or if it would just "hide" the posts. You'd be surprised how many people don't see the other subforums (especially predents). This is more of a trial to see if a subforum is really needed, since we wouldn't want to create a subforum just to have like 20 threads rehashing the same topics over and over again.

And to some other peoples' points, we're not trying to hide anything here (and a subforum would likely hide things even more), and if you hop around the forums, you'll see that financial discussions are very different from profession to profession, so just because one forum has something doesn't mean we need it too.

But again, this is sort of a trial period to see if 1) leaving things as they are is fine, 2) if this megathread is fine, or 3) if a new subforum is needed.

I hope that makes sense to you & everyone concerned :)
 
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Blueshirts

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Everyone wants different forums made for different things, but before we talk about making a new forum (or in this case, it would be a sub-forum), we have to decide if there'd be enough threads/posts in that forum to be valuable, or if it would just "hide" the posts. You'd be surprised how many people don't see the other subforums (especially predents). This is more of a trial to see if a subforum is really needed, since we wouldn't want to create a subforum just to have like 20 threads rehashing the same topics over and over again.

And to some other peoples' points, we're not trying to hide anything here (and a subforum would likely hide things even more), and if you hop around the forums, you'll see that financial discussions are very different from profession to profession, so just because one forum has something doesn't mean we need it too.

But again, this is sort of a trial period to see if 1) leaving things as they are is fine, 2) if this megathread is fine, or 3) if a new subforum is needed.

I hope that makes sense to you & everyone concerned :)
Thanks for clarifying, finances and debt knowledge may be one of the most important issues facing dentistry as a whole currently. The more we can educate pre-dents—>new dentists the better it is for everyone in the profession. Hopefully no one sees these posts as some form of gatekeeping, I don’t think that is ever the intent, no one wants to see fellow colleagues who put in lots of work fail, which arguably could influence patients - the people who we all want to help in the first place!

What is SDN’s position on inviting professionals to discuss these topics? Maybe it wouldn’t be a bad idea - if we were to expand the forum, it could be a good idea to get some type of periodical written pieces to supplement the posts. I know that there do exist finance forums on SDN, but how many people log on just to the dental forum and never really explore, it would be unfortunate to look back in 10 years and see that even though there was an easy opportunity to help others, nothing substantive was done because of whatever arbitrary rules, after all the whole reason SDN exists in the first place is to help share information, why not continue to pursue that goal.
 
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artist2022

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Thanks for clarifying, finances and debt knowledge may be one of the most important issues facing dentistry as a whole currently. The more we can educate pre-dents—>new dentists the better it is for everyone in the profession. Hopefully no one sees these posts as some form of gatekeeping, I don’t think that is ever the intent, no one wants to see fellow colleagues who put in lots of work fail, which arguably could influence patients - the people who we all want to help in the first place!
I agree that it's an important issue, but the main point behind the making of this thread was that it seemed like every thread was turning into a discussion about debt, some way or another. Debt is a HUGE issue, but it's far from being the only one. And like I said before, I understand that part of the intent of having a sub-forum is to educate predents, but trust me when I say they don't really look at subforums (I'm always moving WAMC or X vs. Y school threads in the Pre-dental Forum to their respective subforums, because I guess predents don't see those?). The subforum may get tons of activity from the regulars that post here, but that may be it.... who knows.
What is SDN’s position on inviting professionals to discuss these topics? Maybe it wouldn’t be a bad idea - if we were to expand the forum, it could be a good idea to get some type of periodical written pieces to supplement the posts. I know that there do exist finance forums on SDN, but how many people log on just to the dental forum and never really explore, it would be unfortunate to look back in 10 years and see that even though there was an easy opportunity to help others, nothing substantive was done because of whatever arbitrary rules, after all the whole reason SDN exists in the first place is to help share information, why not continue to pursue that goal.
Definitely don't think that's a bad idea at all, I think the issue may be finding those professionals to discuss these topics/write articles. Also, I'm not sure what arbitrary rules you're referring to, since as I said before, this is a trial to see if a subforum is really warranted (and if it is, we'll make a subforum!).

Does that clear up our reasoning for having this thread? If not, feel free to PM. I don't want to get this thread off-topic :p
 
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