How to Use Private and Federal Dental School Loans

If you want to be a dentist, your dream will come at a steep cost. According to data from the American Dental Association (ADA), for the academic year 2021-2022, first-year costs was $56,698 for residents and $74,866 for non-residents.

It doesn't sound like much. But consider data from the American Dental Education Association (ADEA) that found the average dental school debt for graduates in 2021 was a whopping $301,583. That's a lot of dental school debt.

After taking advantage of federal student aid like grants and scholarships, you may need to turn to dental school student loans to fund your dentistry education. Going to dental school could cost you upwards of six figures. Read on to learn more about loans for dental school and what you should know.

Federal student loans for dental school

Dental school isn’t cheap, and your salary may vary after you graduate. According to the Bureau of Labor Statistics (BLS), the median pay for dentists as of 2021 was $163,220. While that can be considered a good salary in general, when you compare it to the average debt of graduating seniors — which is $301k —  it’s not looking as great.

When it comes to getting student loans for dental school, we recommend taking out federal student loans first. Federal student loans from the Department of Education have generous borrower protections and various loan repayment programs and loan terms that can come in handy down the line.

For example, if you borrow more than your starting salary, you could take advantage of an income-driven repayment (IDR) plan. Under IDR repayment plans like income-based repayment (IBR), your monthly payment is 10% to 20% of your discretionary income.

If you’re hit with hard times, you could opt for deferment or forbearance, which puts your payments on hold.

Additionally, federal student loans are eligible for student loan forgiveness. If you work in the public sector or for certain government entities, you may be able to have your student loans forgiven under Public Service Loan Forgiveness (PSLF). You can get forgiveness after working for 10 years and making 120 payments. You won’t have to pay any taxes on the forgiven amount, either.

Another option is to get student loan forgiveness through IDR if you're not working for a PSLF-eligible employer. It forgives your remaining balance after paying for 20 to 25 years, depending on the plan. However, you’ll pay taxes on the forgiven amount under this alternative (but that's on hold until 2025, thanks to a new rule).

These robust options make federal student loans attractive to borrowers. If you’re borrowing for school, start with federal student loans first.

One thing to note, though, is that you’ll likely need to take out Graduate PLUS Loans, which come with high, fixed interest rates and are designated for graduate students. The current rate for federal Grad PLUS loans is 6.28%. This could mean paying thousands of dollars in interest over the life of the loan. You may get a better interest rate by using a private student loan.

Private dental school student loans

Sometimes federal loans don’t cover all your educational costs. But not all is lost if you still need funding. Private student loans for dental school are available. Numerous financial institutions offer private loans with various rates and terms. Keep in mind that private loans don’t carry the same benefits as federal student loans. You don’t have the option of student loan forgiveness or income-driven repayment with private loans.

Specific private dental student loans exist that are geared toward borrowers going to dental school, each with different eligibility requirements.

Sallie Mae Dental School Loan: No origination fee and possibly no cosigner

One option to consider is the Sallie Mae Dental School Loan. This option has variable interest rates and fixed APR, depending on your preference. The lowest rates available are based on having auto-debit for payments (autopay) and good credit.

The Sallie Mae Dental School Loan option provides benefits such as a 12-month grace period, as well as 48 months of deferment while you’re in residency. There’s a 20-year repayment term and no prepayment penalty if you pay off your loans earlier.

You also get an auto-debit interest rate reduction of 0.25%, no origination fee and the option for cosigner release.

Sallie Mae

• Fixed interest rates: 3.49% APR – 15.49% APR¹
• Variable interest rates: 4.92% APR – 15.08% APR¹

Visit Sallie Mae More Information

College Ave Dental School Loan: No origination fee and possibly no cosigner

Another option is through College Ave, which may offer better rates and savings than Graduate PLUS Loans. They are known as a refinance company, but also offer in-school dental loans.

According to its website, borrowers could stand to save thousands of dollars with a College Ave dental loan compared to a PLUS Loan. The savings come from lower rates and not having to pay origination fees.

College Ave private student loans have flexible repayment options (3). You can choose variable rates or fixed rates.

You can defer your payments while you’re in residency until you complete the program. There’s also a six-month grace period available, as well as forbearance for up to 12 months (3).

College Ave

• Fixed interest rates starting at 3.47% APR (1)
• Variable interest rates starting at 4.99% APR (1)

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Comparing private loan options for dental school

Generally speaking, taking out private student loans should be something you do after you’ve exhausted your federal loan options. Also, make sure you look into any and all grant or scholarship options based on financial need before resorting to a private dental school loan.

However, if you can save a significant amount by using a lower interest private loans instead of federal Direct PLUS Loans, it’s something to consider carefully — especially if you're attending one of the cheaper in-state dental schools and know you need to pay back your debt in full after graduation.

Besides comparing interest rates, another thing to look at is the origination fee. Compare the origination fee from Grad PLUS Loans and your prospective private loan.

On top of that upfront fee, for well-qualified applicants, both loans could yield an interest rate at least 1% below the Grad PLUS option.

Keep in mind that if you take our private loans for dental school, your plan after graduation should almost surely involve refinancing these loans to a 20-year fixed rate for a lower interest cost.

That means the 2% origination fee could be looked at as if it were a 0.5% extra interest cost. APR assumes you will carry the balance until the loan is paid off, which is unlikely.

Get advice from professionals

The cost of dental school can cause anyone anxiety. You may wonder which student loans are the best options or be unsure of where to start. Student Loan Planner® can offer guidance before you take out student loans. We’ll set up a pre-debt consultation to make sure you’re on track and guide you toward the right choices for your financial future.

Taking out dental student loans can be a big commitment. You might get advice from family, friends or your financial aid office, but we can provide the kind of expertise to help you plan your path ahead of student loan debt.