Which degree or professions have the most student debt? If you guessed “dentists,” you’re probably right. This may be surprising to some but each year, dental health professions usually sit near or at the top of any list of degrees or jobs with the most student debt.
Due to a confluence of factors including rising tuition and decreased government financial support for schools, the average amount of dental school debt has risen by $83,621 since 1996!
Today, a newly minted dentist most likely is graduating with a large amount of student debt. How much is the average student loan debt for dentists? Exactly how many dentists graduate with student debt? How long do dentists spend paying back their student loans? How can they pay off their loans more quickly? How would an employer student loan repayments benefit help? We'll cover this and more below.
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According to the American Dental Education Association (ADEA), since 2017, the average dentist has graduated from dental school with an average of around $293K to $335K in outstanding student debt–97% of which was taken out to pay for dental school.
Since 2017, the average dentist has graduated from dental school with an average of around $293K to $335K in outstanding student debt–97% of which was taken out to pay for dental school.
The amount of education debt for Dental school graduates seemed to peak in 2020, with graduates then owing an average of $335.3K in student debt, and has declined slightly in recent years. In 2023, new graduates owed an average of $296,500.
As the cost of dental school has increased astronomically since the 1980s, it’s no surprise that many dental school students have had to take out student loans to fund part or all of their education.
According to the ADEA’s snapshot data, since 2015, 80-90% of the senior class of dental students have graduated with some amount of student debt. What’s more, over ⅓ of graduating seniors with student debt in the same time period have owed more than $300,000 upon graduation.
In both 2021 and 2022, the ADEA estimated that 83% of dental students graduated with some amount of student debt.
Depending on the types of loans, it can take a dentist with student debt anywhere from 7-30 years to pay back all their student loans.
Dentists with private loans typically have a payback period between 7-10 years, although some lenders may allow for an extended repayment period of up to 30 years.
Dentists with federal loans have the option of paying back their loans on a standard, graduated, or extended repayment plan. These plans have repayment terms of 10 and 25 years for the standard / graduated and extended plan, respectively. Dentists on an IDR plan may pay their loans off within 20-25 years.
For both private and public loans, periods of forbearance or deferment could stretch this payback period out longer.
As the majority of dentists with student debt (~70%) have federally backed loans, most will take the full federal loan repayment term (10 or 25-30 years) to repay their student debt.
How long it takes for dentists to pay off their student loans will ultimately depend on their approach to their student loan debt repayments. Dental health professionals with student debt may be able to pay off their loans more quickly by pursuing available loan forgiveness options, working for an employer that offers a student loan repayment program, or prepaying their loan principal. Extra payments applied directly to outstanding student loan principal will help reduce the balance on which interest accrues, not only helping borrowers pay down loans faster, but also saving them money in extra interest over time.
There are two primary loan forgiveness options available to dentists with federal student loans who are hoping to shorten their overall repayment time: Public Service Loan Forgiveness (PSLF) and forgiveness via income-driven repayment plans.
Under both programs, Dentists with qualifying federal student loans will need to repay their loans for some period of time before any remaining loan balance is forgiven. Dentists who want to apply for PSLF will need to work for a qualifying employer, such as the government, 501(c)(3) nonprofit, or other qualifying nonprofits, for 10 years and make 120 qualifying payments on their student loans in order to have their loan forgiven at the end of the repayment period.
Dentists on an income-driven repayment plan don’t necessarily need to work for a qualifying employer to see their loans forgiven at the end of their repayment period; if there’s an outstanding balance at the end of the repayment period, it may be automatically forgiven.
If a student loan is forgiven under an income-driven repayment plan, Dentists will likely owe taxes on the amount forgiven. One caveat to this–currently qualifying student loans forgiven between Dec 31, 2020 and Jan 1, 2026 may be exempt from federal taxation under the American Rescue Plan Act (but may still be subject to state taxes).
If a student loan is forgiven under PSLF, borrowers will likely not owe taxes on the remaining balance forgiven.
As healthcare professionals, dentists have a couple options available to them when it comes to paying off their student loans faster with employer-sponsored student loan repayment programs:
Dentists who are willing to work for certain government organizations or in Health Professional Shortage Area (HPSA) or an underserved, high-needs location, may be able to take advantage of special loan repayment programs too.
Dentists who choose to serve in the Army or Navy may be eligible to participate in the Health Professionals Loan Repayment Program. Under this program, dental health professionals, including hygienists and assistants, could receive up to $40,000 per year in loan repayment assistance. It’s important to note that this repayment assistance:
Some other similar student loan repayment programs available to dentists and dental health professionals include:
One last option for dentists to quickly repay their student loans (federal or private), is to work for an employer that offers tax-free student loan repayments as a benefit. Employers offering this benefit can contribute up to $5,250 tax-free annually to each therapist’s student loans. These contributions can help dentists save thousands of dollars in principal & interest payments and, when made on top of employee payments and applied towards loan principal, can help them pay off their loans faster.
An employer student loan repayment benefit is a powerful, prescriptive tool that dental networks, private practices, and group practices can leverage to attract and retain top talent, while simultaneously tackling one of the biggest sources of financial stress for dentists with student debt.
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Interested in learning more about employer student loan repayment benefits? Speak with a member of our team today.
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