Dental School Debt

Don’t let your student debt load crush your ownership dreams

According to the American Dental Education Association the average dental school debt per graduating senior is $287,331. That’s a 72% increase over the last decade and it doesn’t even take into account the cost of a residency. At NDP we often see debts of $400,000 or more. The economic forces that have driven up student debt across all fields of study are amplified in dentistry. Due to the scarcity of admission slots students often have to go out of state or pay private school tuition. Often they have to do both.

With a mountain of debt on their shoulders it is understandable why a young dentist would believe that their dream of owning a practice is years out of reach. It is also understandable that established doctors would be concerned about finding a qualified buyer for their practice. It’s understandable, but incorrect. In fact dental school debt is not an obstacle to owning your own practice and owning your own practice could be your smartest way out of dental school debt.

Paying Off vs Saving Up

When you have a debt most people’s instinct is to pay it off as quickly as humanly possible. Many dental school graduates get right to work paying off their debt as associates. They assume banks won’t give them financing or they won’t be able to afford a down payment for a practice because of their debt load.

It turns out that banks don’t really care all that much  when it comes to financing the purchase of a dental practice (however, they do care about personal debts like credit cards and mortgages). Money down is also a rarity. Buying a dental practice is not like taking out a mortgage. A bank is much more concerned with the debt load and financial health of the practice you wish to purchase. Their primary concern is liquidity. Unless you have poor credit or above average credit card debt, your personal debt is just that, personal .

We recommend that instead of attempting to pay off all your student debt your first year out of school your focus should be on saving up while building your speed and productivity. Not to mention really thinking about where you want to live and what kind of practice you want to own. Once we help you buy into a thriving practice all the money you saved can go towards your student loan debt.

We also advise on holding off refinancing your student loans until you have your practice. With larger payments refinancing could cut into how much you can save in that first year out of school. Also, you’ll most likely receive more favorable financing terms as a business owner with a steady cash flow rather than a first year associate saddled with student debt.

Ownership gives you the flexibility you need to pay off your debt and start building your future.

Buying In vs Starting Up

Bank of America says that the cost of a dental practice startup ranges from $250,000 to $500,000 thousand with the average being just under $400,000. Considering that it takes at least a year for a new practice to even begin to show a profit, starting your own practice may not be the optimal choice if your already have $400,000 in student loans hanging over your head.

When you acquire or buy into an established practice you are acquiring a loyal client base and existing cash flow. You’ll also have the benefit of learning the ropes from an experienced business owner. That’s a foundation that you can start building upon immediately. Owners through acquisition in general take home more money in their first 1-2 years of ownership than those that start their own.

That’s not to say that start-ups never make sense. Maybe your vision is to open a practice in an underserved community where competition is limited and need is great. Maybe you and a spouse want to go into practice together. Maybe you’re willing to take on a side job until your practice is turning a profit. There is no single path to practice ownership. It’s about what makes sense for you.

We’re here to guide you

Whatever path to ownership you take NDP can help you do the math and weigh your options. With the Baby Boomers reaching retirement age opportunities to acquire a thriving practice abound. Check out our practice listings at or find another practice you’re interested in. We’ll crunch the numbers and prove to you that dental school debt doesn’t have to be an obstacle to ownership.