Today I wanted to write about something that will come in very useful for our younger readers, especially if you’re bogged down with dental student loans. While even the most senior of my colleagues remember the time when they had student loans to repay, loans have now taken up a more pronounced role in the last few years because of the rising cost of dental school education.
My friend Mark Johnson, a Wealth Advisor at Student Loan RX in St. Louis, Missouri, who joined me in the Thriving Dentist podcast has given some great strategies on how to pay off your dental school loans.
According to Mark, the best time to start planning your loan repayment is either in the final year of your dental school, or as soon as you graduate and start looking for jobs. Here are a few more tips and strategies to pay off your dental school loans.
1. Your student loan strategy needs to be consistent with your career path
For instance, your student loan repayment strategy working as a Public Health Professional is going to look very different from your repayment strategy when you’re working as an Associate in a dental practice.
2. Finish your repayment planning between the day after you graduate and the day before you start working
70% of the time most students will decide to go with an income-driven repayment plan. In this repayment strategy, they calculate your payment based on the previous year’s income. But since you’re just a graduate with zero income, your payment in the next 12 months will be zero. So, this means that you will qualify for an interest subsidy. This is why it’s critical to start planning early.
3. When should you consider refinancing your loan through a private lender?
If you have about 200,000 dollars in household income, the interest subsidies from an income-driven repayment plan will be removed. That’s when you should start thinking of refinancing your loan through a private lender. But you need to be confident when making this switch, because once you switch from a federal program to a private lender, there’s no coming back.
So, if you’re just starting out in the field of dentistry and you’re wondering how you can actually pay off that dental school loan, I hope these strategies will come in handy to lay down a solid repayment plan for you.
You can learn more from my podcast episode on best strategies for paying Off Your Dental School Loans as Soon as Possible with Mark Johnson. Listen to it now!