Student Loan Refinancing Guide for Pediatric Dentists

The cost of becoming a pediatric dentist leaves many young professional dentists grappling with staggering amounts of student debt, despite being a highly rewarding career. Those looking to reduce their student debt and repay their loans faster are smart to consider student loan refinancing for pediatric dentists, although it’s not the best decision in every circumstance.

If you’re carrying a student loan balance as a pediatric dentist, here’s what you need to know when deciding whether refinancing is the right move for you.

Average debt for pediatric dentists

Dentistry is often referred to as the No. 1 profession for student debt. It costs a lot of money to become a dentist than to pursue other professions, especially when seeking to become a pediatric dentist, which requires an additional 24 to 36 months of specialized training.

Statistics from the American Dental Education Association show that 25% of dentists from the class of 2019 graduated with $200,000 to $300,000 of student debt. Debt for dentistry education, however, can grow as high as $450,000, which is about the average debt of Student Loan Planner® dentistry clients who are still in school or in their early career.

A pediatric dentist who is hired at a dental clinic can expect to make an average of $161,018, according to current Glassdoor data.

This might seem like a lot of money, but it pales in comparison to the amount of debt young professionals are burdened with from the time they graduate from dental school before even factoring in interest over the years to come. That’s why many specialists hope to open their own private practice during their careers — specialists in private practice earned an average of $330,180 annually in 2018.

Related: Disability Insurance for Pediatric Dentists: Costs and Coverage Options

Student loan refinancing for pediatric dentists

Pediatric dentists who are looking to get out of debt faster could benefit from refinancing their dental school loans. If your credit has improved since you initially took out your student loans you could qualify for a lower interest rate, potentially saving you thousands of dollars over the lifetime of your loan.

Here’s what you need to consider about refinancing your pediatric dentistry loans.

Pros of refinancing

• Lower interest rate: If you have good credit and a stable income you could qualify for a lower interest rate, saving potentially thousands of dollars over the life of your loan.
• Easier repayment: You can consolidate many loans into one loan when you refinance, making your repayment plan less confusing.
• Add a cosigner (or release one): You could potentially apply for your refinancing loan with a cosigner to get an even greater reduction in your interest rate. Or, if you currently have a cosigner and you want all of your loans to be in your name alone, refinancing could be an easier way to remove your cosigner from your debt.
• Reduce monthly payments: If you’re having difficulty with your monthly budget, refinancing your loans could help you lower your monthly costs by either extending your term or simply by virtue of reducing your interest rate.

Cons of refinancing

• No government repayment assistance: You’ll lose access to any federal protections such as income-driven repayment or loan forgiveness programs.
• Possibly prepayment penalty: If you’re refinancing private student loans you might have to pay a prepayment penalty on your old loan that would negate the potential savings from refinancing.
• No guarantee of deferment or forbearance: Private lenders do not always offer deferment or forbearance options, such as the forbearance extended by the U.S. government during the COVID-19 pandemic.
• Credit and income requirements: Lenders typically want to see a good debt-to-income ratio, which could be difficult to prove if you’re in your early career and have a lot of student debt.

If the loss of federal benefits doesn’t affect you and your main goal is to save money by lowering your interest rate, student loan refinancing might be an option. Refinancing dental school loans is also often the better option for pediatric dentists who own a private practice. Owning your own practice can produce more lucrative earnings than working as an employee, which enables you to pay less interest over the life of the loan.

Federal student loans and forgiveness programs

Before refinancing your dental school loans with a private lender, you’ll want to consider any federal student loan repayment options that might apply to you. Remember, when you refinance you’ll lose access to any federal loan forgiveness benefits.

Here are some programs to consider:

• Income-Driven Repayment (IDR) plans: Federally administered IDR plans, such as Revised Pay As You Earn, could be a good way for some pediatric dentists to begin repaying their loans. You could potentially begin an IDR plan during your residency as a pediatric dentist, and your payment might be as low as $0 per month.
• Public Service Loan Forgiveness (PSLF): There are far fewer qualifying PSLF jobs for dentists than exist for doctors, but if you do find a nonprofit dental position you could pursue PSLF as a strategy. In this case, your dental school loans would be forgiven after making 120 qualifying payments. For pediatric dentists, many teaching hospitals where you’ll complete advanced training could qualify as an eligible employer.
• Location-specific dentistry programs: Some states have specific loan-repayment programs to entice dentists to work in underserved areas. For example, in Colorado applicants are eligible to receive up to $90,000 when committing three years of service in state-designated areas. To research such programs in your state, review the American Dental Association’s loan repayment program guide.

Is refinancing right for you?

For pediatric dentists who are established in a private practice, refinancing will likely end up being the fastest way to repay debt because a lower interest rate can translate into thousands of savings.

However, if you’re still in residency or in the early part of your career, you might want to consider federal options for reducing your student debt load. Carefully weighing the pros and cons of your circumstances is essential because there are multiple paths depending on what you value right now in your life.

Schedule a consultation with a student debt expert who can help you understand the nuances of each pathway and reach a decision.