Strategies for Managing Dental School Debt

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Shift your perspective from burdensome to attainable.

The burden of managing dental school debt often weighs heavily on the shoulders of new dentists. Even for seasoned doctors who continue to carry the load, the thought of debt can trigger stress.

The truth is, student debt is nothing to be ashamed of, lose sleep over, nor should it divert your short- or long-term career goals.

For over 20 years, NDP has worked with doctors in this very position, and their guidance has always remained consistent. Shift your perspective from thinking the impossible and move in a positive direction towards your long-term goals by focusing on these strategies.

Know that student debt is considered a low priority debt.

You may have other debts with higher rates or that have a bigger impact on things like your credit score. The list of higher priority debts may include credit cards, auto loans or personal loans. These can greatly impact your purchasing power for a home, practice or another large investment.

Student debt sits on the other side of the spectrum as a low priority debt and can actually be viewed strategically as “useful” debt. Prioritizing your debt allows you to focus on any high priority debts and as a result, have more monthly cash flow on hand. This means that carrying the debt with you by paying the minimum monthly payment could work out to your benefit in the long run. 

Student debt is there to help you generate income over your lifetime. In NDP’s opinion, there is no real benefit to paying it off immediately.

Understand your loans and your repayment strategy.

Having a thorough understanding of your loans and a robust repayment strategy can go a long way in helping keep your emotions and stress levels in line.

Ensure you know the servicer, balance, monthly payment, grace period, interest rate, whether your interest rate is fixed or variable. Additionally, understand your repayment plan, whether it’s standard, graduated, extended or income-driven (i.e., Saving on a Valuable Education [SAVE], Pay As You Earn [PAYE], Income-Based Repayment [IBR]), and how your plan relates to helping you achieve your goals.

Utilizing a CPA and financial advisor, such as Cain Watters & Associates, can help you navigate what’s best for you and your situation.

Consider your refinancing and/or consolidation options.

Every situation is unique with different variables, and you may need to perform a cost-benefit analysis before considering refinancing or consolidating your loans.

If refinancing is a viable option for you, it could significantly reduce your interest rate and overall debt burden.

For those who aren’t currently practice owners, we typically suggest holding off on refinancing your student loans until you own your practice and feel comfortable with your cash flow. With larger payments, refinancing could cut into how much you can save in the first few years post-dental 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.

Consolidating your federal student loans into one loan allows you to lower your monthly payments by extending the loan term, although keep in mind that you may pay more interest over the long run.  

Consolidation may or may not be the right choice for all borrowers. Your loan types, interest rates, and how long you’ve been making payments can all affect whether consolidation is the best option for you.

Use practice ownership as a springboard.

While you may view dental school debt as an obstacle to owning a practice, becoming a practice owner can actually be a catalyst to get you out of it. The reason for this is simple: cash flow.

The cash flows that you will receive as an owner will be much higher than that of an associate. As an owner, your higher compensation will allow you to pay your loans off more quickly with potential to save additional money that may have been allocated to accrued interest.

One of the advantages of practice ownership is the opportunity to control your career. While student debt can make you feel trapped, ownership reverses this dynamic and can pave the way for a financially flexible and secure future.


If you’re concerned about financing a practice, the good news is, business loan lenders will typically lend 100% of a dental practice loan with no money down. Rather than worry about saving for a down payment, you can focus on having enough liquidity, or cash readily available, to look attractive to lenders and get the best rate possible.

Managing dental school debt can be a tough load to carry, but it doesn’t have to be an obstacle against your bigger career goals. There are numerous dental-specific professionals, like CWA and NDP, who can guide you to financial freedom. Reach out to our team to discuss your unique situation and a plan of action for your needs.