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How to Pay Off Dental School Debt and Thrive as a New Dentist

April 27, 2017 · 4 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

How to Pay Off Dental School Debt and Thrive as a New Dentist

In dental school you’re taught all you need to become a successful dentist—but what you don’t learn is how to effectively handle your dental school debt.

According to a recent survey of dental school seniors by the American Student Dental Association, the typical dental school graduate enters the profession with a student loan burden topping $260,000 .

That’s $70,000 more than the average med school grad, according to the Association of American Medical Colleges. Right when dentists are ready to hit go on their careers, the reality of repayment presents a hurdle.

The good news, of course, is that you’ve picked the right profession when it comes to ROEd—the “return on education” you should reap down the road. As a dentist you can expect to earn nearly $7 million over the course of your career, even after repaying all your student loans. So sure, your education was ridiculously expensive—but you’ll likely make that money back, and more.

Still, first things first. At this stage of the game, it’s important to have a plan in place for paying down your debt as efficiently as possible. Getting your finances in order early is especially critical if you anticipate borrowing more money down the road, whether to open your own practice or even to buy a house. Here’s a review of the various student loan payment options available—and how to know which one makes the most sense for you.

Student Loan Refinancing

For many dental school grads, consolidating a number of student loans into a single loan, and then refinancing the balance at a lower interest rate is the best choice. Consolidation makes it easier to manage your finances: You’ll get one bill each month from a single lender, instead of several bills for varying amounts that are based on different rates.

There are other benefits to loan refinancing, too. Depending on how you structure your loan, the lower interest rate might allow you to pay back your debt faster—and save a substantial amount of money over the life of the loan.

You could also choose a term that lowers your monthly payments, leaving more money in your pocket to be used for other things, including building an emergency fund, preparing for your first child, and investing for retirement.

One decision you’ll have to make if you refinance is whether your new loan should have a fixed or variable rate. With a fixed-rate loan, the interest rate stays the same for the life of the loan—which means you’ll pay the same monthly amount until your loan is paid off.

With a variable-rate loan, the interest rate you pay on your loan will depend on the rate banks charge to borrow from one another. That rate changes month to month, so you can expect that your payments will change each month too. Borrowers who take out variable-rate loans often start out at a lower rate than they would have with a fixed-rate loan, but they can’t be certain that rate won’t rise in the future.

Income-Driven Repayment Plans and Loan Forgiveness

If you have federal student loans and your credit history prevents you from refinancing, an alternative is to apply for an income-driven repayment plan. The federal government offers four such plans, each with its own eligibility requirements, but they all set your monthly loan payment at an amount deemed affordable based on your income.

If you qualify for the so-called Income-Based Repayment Plan (IBR Plan), for example, your monthly payment will be limited to 10% or 15% of your discretionary income, depending on the date you first borrowed for school. The repayment period for this plan—and the three others—ranges between 20 and 25 years, and any remaining loan balance after that term is up is automatically forgiven.

That sounds great, until you consider this: There’s a chance you’ll pay back your loan in full before those 25 years are up.

In addition, the interest you’ll pay over the life of that loan may be higher than it would have been had you refinanced over a shorter term. And, even if you do have a remaining balance when the plan ends, the forgiven amount may be considered taxable income under Internal Revenue Service (IRS) rules. The math might work out in your favor, but it’s worth a close look before you commit.

There is another path to dental school loan forgiveness —if you start your career at an eligible nonprofit or public service agency.

Work for a local, state, tribal, or federal government organization, or for a nonprofit organization offering public-sector services, and you may be eligible for loan forgiveness after just 10 years in an income-driven repayment plan. Even better, you won’t owe federal taxes on your remaining balance.

There are also a number of national (including military) and state loan-repayment assistance programs that reward dentists for providing service to certain segments of the population.

The Indian Health Service Loan Repayment Program , for example, offers dentists who serve American Indian communities $20,000 per year toward the repayment of school loans.

The Choice is Yours

When you refinance with SoFi there are no origination fees and no prepayment penalties, you could potentially be saving quite a bit of money.

No matter how you decide to tackle your dental school debt, remember you’re only at the beginning of your career. Before long, your student loans will be a thing of the past—just a hurdle you had to clear so you could follow your dreams.

Check your rates online in just two minutes to see if refinancing with SoFi makes sense for you.


The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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