Repayment Programs for Dentists: Your Guide to Reducing Dental School Debt

The average graduating dental student leaves school with $293,900 in educational debt, according to a survey from the American Dental Education Association. Unfortunately, repaying over $200,000 in student loans can be a huge financial burden. The good news is that there are a number of loan repayment programs for dentists.

Here's what you need to know about these programs to make your dental school debt more affordable.

Federal forgiveness options for dentists

If you have federal student loans, you have two primary ways to pursue loan forgiveness:

• Public Service Loan Forgiveness (PSLF): PSLF may be an option if you work full-time for the government or an eligible not-for-profit organization. You'll need to make 120 on-time monthly payments on an eligible income-driven plan, after which you'll have your remaining debt forgiven.
• Forgiveness through income-driven repayment (IDR): IDR plans — including Saving on a Valuable Education, Pay As You Earn, Income-Based Repayment, and Income-Contingent Repayment — are an option for eligible borrowers. Depending on the plan, monthly payments are set at 5% to 20% of your discretionary income, and repayment terms range from 10 to 25 years. After the repayment term ends, any remaining balance is forgiven.

While income-driven repayment forgiveness is the right option for many, it's not for everyone. Dentists earning a high salary may be better off on the Standard Repayment Plan, which eliminates debt faster than an income-driven plan.

State-specific repayment assistance programs for dentists

Many states offer repayment assistance programs that help dentists pay off their student debt. Examples include:

• The California State Loan Repayment Program: This program aims to increase the number of medical specialists (including dentists) in health professional shortage areas. You must commit to working at an approved practice site either part-time or full-time for two years. Eligible providers can receive up to $50,000 in repayment assistance, and can even choose to extend their service commitment. The application typically opens in July each year.
• The New York Primary Care Service Corps Loan Repayment Program: Dentists and dental hygienists can become eligible for up to $72,000 in loan repayment assistance with a full-time three-year commitment to work at a designated site.

Many other states operate similar programs that offer loan repayment assistance in exchange for working in an underserved area for a set number of years.

You can find out about your state's offerings through professional groups such as the American Dental Education Association or through your state's Department of Education. Your school's financial aid office can also help you explore repayment assistance opportunities after graduation.

National Health Service Corps (NHSC) Loan Repayment Program

The National Health Service Corps (NHSC) Loan Repayment Program provides repayment help for medical or dental school debt.

Repayment assistance is available to dentists and dental hygienists. You must commit to working full-time or half-time for two years at an NHSC-approved site. Eligible employees in the dental field can receive up to:

• $50,000 in repayment assistance (full-time)
• $25,000 in repayment assistance (half-time)

You can apply for an extension of your service contract to become eligible for additional loan repayment funds for dental school loans, and you may be able to receive more assistance if you're proficient in Spanish.

Other loan repayment resources for dental professionals

Other loan forgiveness options for health care workers are also available to help dental professionals become debt-free. Examples include:

• The Indian Health Service Loan Repayment Program: This program provides up to $50,000 in loan repayment in exchange for a two-year service commitment at a facility serving American Indian and Alaska Native communities.
• Military loan repayment programs for dentists in the armed forces: Multiple programs exist for current or prospective dentists in the armed forces. The U.S. Army Recruiting Command provides details on available options depending on what phase of your career you're in.

Some private employers may also offer loan repayment help. It's worth reaching out to your employer to find out your options.

Tips for managing dental school debt repayment

Managing dental school debt repayment can be overwhelming, but there are steps you can take to make it easier. Here's what you can do.

Understand your options

You need to know the details of your loans to decide on the best course of action, so taking stock of your situation should be your first step.

“Prioritize understanding your loan terms, interest rates, and repayment options early on,” advises Chad D. Cummings, certified public accountant and attorney at The Law Office of Chad D. Cummings.

Specifically, make sure you understand:

• The repayment term lengths for different loan repayment plans
• Monthly payments for different repayment options
• Total interest paid over time with different repayment options

Cummings recommends considering whether an income-driven plan makes sense given your current salary and the amount you'll likely earn over time. Income-driven repayment plans can come with low monthly payments and make loan forgiveness possible, but typically make more sense if you aren't earning a very high salary.

Budget for loan payoff

Beyond choosing the right payoff approach, you'll also need to budget to ensure your payments are a top priority. Consider the debt avalanche method, which prioritizes repayment of loans with the highest interest rate, or the debt snowball method, which prioritizes loans with the lowest balance.

Once you know you can cover your monthly student loan payments, it's helpful to set up automatic transfers from your bank account. “Automating payments can prevent missed payments and sometimes reduce your interest rate,” says Cummings.

If you want to repay your debt sooner rather than later, you can make a plan to pay extra each month to pay down the principal faster. You can also opt to make biweekly payments — when you make half-payments each month, you end up with 26 total payments (or 13 full payments), which means you'll make a full extra payment each year.

Consider refinancing

Student loan refinancing involves taking out a new loan to pay off the student debt you currently have, ideally at a lower interest rate. Refinancing could also help you lower your payments and get more favorable payoff terms, but you'll need strong credit to qualify.

Keep in mind that refinancing turns federal student loans private, which generally isn't the best move. “Federal loans, which will have the word 'Direct' in them, have more protections in place for borrowers who are lower income, facing financial hardship, or are unemployed,” says Ryan Law, certified financial planner and director of the Utah Valley University Money Success Center.

Refinancing is only available through private lenders, so you need to be confident you're not planning to use those benefits before refinancing federal loans. This downside doesn't exist when refinancing one private loan into another private loan. Consider the type of loans you have, how likely you are to use federal benefits, and what loan offers are available to you to decide if you should refinance.