And the Number 1 Job in America for Debt Is… Dentist

US News recently published their rankings of the 100 best jobs of 2017, and they boldly claim that being a Dentist is the number 1 job in America. Their report rates occupations on a list of seven different factors, but none address the cost of a dental education. For new dentists, your dental school dean probably sold you a bill of goods. Yes I can probably help you come up with a strategy to save money repaying your dental school loans (feel free to contact me at travis@studentloanplanner.com), but a dose of realism is necessary first.

No you will not repay your student debt in five to seven years. Your education was most likely not a wise financial investment compared to alternative paths available to someone smart enough to get into dental school. The economics of the profession are not the best they’ve ever been. Over the next decade, corporate dentistry will replace thousands of small business owners with employees and retain all the profits. I have a different rating system for the folks over at US News and the thousands of young dentists and soon to be dentists graduating in the next several years. Being a dentist is the number 1 job in America for debt.

Dental School Debt is Crushing in Magnitude

In my flat fee student loan consulting practice, I help professionals from all different backgrounds. I’ve consulted with surgeons, primary care docs, veterinarians, psychologists, nurses, teachers, lawyers, chiropractors, pharmacists, business owners, dentists, and more. Dental student loans stand out because they are consistently the highest in absolute dollars of any profession.

The average debt of the 36 dentists I’ve consulted with in the past three months is $402,000. Their average salary is about $150,000. If I restricted that to dentists either currently in dental school or who graduated in the past couple years, the average debt would be closer to $450,000 and average income would be closer to $120,000.

Dental School Debt is Also Almost Impossible Relative to Salary

number 1 job in americaSo say you use my average debt and income figures for recent dentists. A typical debt to income ratio for dental school is therefore $450,000/$120,000=3.75. There is almost no scenario where an individual can repay this level of debt.

There is a wide distribution around these typical numbers of course. Many dentists coming out of public dental schools have between $250,000 and $300,000 in student loans and are on a path to repay everything within 10-15 years. However, some others from private schools owe well over $500,000. I’ve even consulted with some dentists graduating from residency programs who owe close to $1 million for their education.

 

Can you find some success stories of dentists who’ve moved to a rural wealthy enclave in the middle of nowhere making $400,000 a year three years out of school? Sure. However, even these ‘unicorn’ dentists would’ve probably been even more successful as non-dentist business owners. You also can’t make an argument in favor of a profession based on how well the 0.1% are doing. You have to look at the vast majority of cases and look at the typical result.

Without the government income driven repayment programs to fall back on, I estimate that 50% of today’s graduating dentists would default on their loans. That’s not a stable occupation with great pay. It’s one where you have an anvil hanging over your head that you’re glad hasn’t dropped yet.

Dentistry is the Most Expensive of Any Professional or Graduate Program 

number 1 job in americaMedical school is cheaper than dental school. Many people even get scholarships. If you have a high balance, you can use Public Service Loan Forgiveness to pay a fraction of what you borrowed.

Veterinary school is unbelievably expensive, but dental school still wins. I’ve never heard of a vet med student being asked to spend $5,000 for a DVD with books on it.

Law school, psychology PhD programs, pharmacy school, and other graduate degree programs do not hold a candle to the absolute magnitude of the cost of dental school. Yes owing $200,000 and not being able to find a job as a lawyer sucks, but at least that individual can choose not to practice law and survive financially.

To US News and Others Who Believe Dentistry is the Number 1 Job in America, Don’t Buy the Hype

I jokingly wonder if dental school deans take up a collection plate for US News for keeping the horrific economics of a dental education under wraps. There is a massive student loan bubble waiting to pop, and dentistry is at the top of the list.

Say US News adjusted their rankings for average debt level after graduation. Dentistry would not be the number 1 job in America. It might not even be in the top 100. Praising dentistry as a high income occupation without mentioning student debt is like praising an owner of a 10,000 square foot home for his wealth without mentioning that the entire thing is mortgaged.

 

If you’re a talented young dentist, don’t lose heart. I speak with dentists all the time and help them come up with a plan to tackle their student debt. Yes the cost of attending dental school is outrageous. However, once you have the debt the only route is to evaluate the best options for repayment to save the most money and act on it.

Until the public realizes the truth about the economics of dentistry, there will continue to be dozens of applicants for every spot in dental school. Once the word gets out or the federal government cuts off the unlimited dollars available in loans for dental school, I think we’ll see a crisis of epic proportions on our hands. Until that happens, maybe US News meant to say that the number 1 job in America is being Dean of a Dental School.

I Can Help

If you have a six figure dental school student loan burden, contact me at travis@studentloanplanner.com to see what I can do for you. I help graduate professionals conquer huge student loan balances with flat fee consultations.  I perform a holistic loan analysis with my proprietary simulation tool. This reveals what your best available repayment options are (government, private refinancing, etc). I’ve saved the average client tens of thousands of dollars. Check out my reviews on Facebook to see what past clients are saying. 



35 Comments

  • L

    lol this article makes me laugh. So having 250k of school debt and making 200k a year 5 years out of school is a bad investment? Not sure you’re the financial advisor I’d look to for advice.

    • Travis

      For dentists graduating between 2017 onwards, I don’t think those numbers are at all representative of the average experience. The average dentist makes $170,000 a year including all the private practice owners. If you’re starting out as a corporate associate, it’ll start around $120,000 and gradually increase over several years maybe to $150,000 depending on the practice. Others can feel free to verify this for me. Also a dentist graduating in the next 4 years is going to have around $300,000 in debt on average, not $250,000. Private schools will have a lot more too. That debt number includes folks getting assistance from families or spending down savings but still borrowing some themselves. If you exclude those folks, the average debt is even higher

      • DMD503

        I agree with this. 120k is pretty standard for new grads in the corporate world. Especially in areas where the market is saturated. I work at a corporate office in Portland, OR, and can see the numbers of about 25 dentists in the company in my area. We are making 25% of production and about half these dentists are producing around 1500-1800 daily. There’s no way you can pay off your student loans in an urban area, where the cost of living is high, making 375-400 dollars a day. Not happening. Maybe if you move to Timbuktu where you’re the only dentist you can make a lot. But that’s not feasible for everyone

        • Travis

          I wonder DMD503 how fast the percentage of dentists employed at a corporate office has grown in the major metro areas. Someone told me anecdotally that a DSO went from 10 offices to like 60 in Atlanta over only a couple years. Seems like corporate dentistry is exploding.

          • DMD503

            They are growing like wildfire. There’s a DSO on every corner here. It’s a good option for new grads to get their foot in the door but it’s hard to make ends meet when you are doing discount dentistry with low compensation. Most DSO’s target a certain demographic- low to mid-range income. I think there is still a place for private practice. For people who want an experienced dentist (most dso’s hire new grads) or just don’t like corporate dental offices. But it’s definitely getting harder and harder for private, especially the ones targeting the same patient population as the DSO.

          • Travis

            @DMD503 have you seen DSOs doing good work in bringing down the cost of dental procedures for underserved populations? Where have the DSOs not done a good job in your view? Obviously working for one isn’t a good financial decision compared to practice ownership

  • LoanDDS

    To any skeptics out there. Every word of this article is true! I graduated from dental school four years ago with $371,000 in student loan debt. To date, the total principle with exorbitant 6.8 – 8.9% interest rates has ballooned the loans to over $455,000 while making payments under the Income-Based-Repayment program.

    Just imagine, the interest on your loans growing by just over $2200/month, all while corporate dentistry is taking over all the small profitable practices out there and starving out the competition. Companies like Aspen, Heartland and PDS come to the dental schools, recruiting dental students and promising the world and $120K salary, but the reality is they are for the most part terrible offices to work in and the salaries only last for a short intro-period. They suck all of the profit out of the practices by paying low wages to the doctor ( 20-25% of your adjusted production (which really means collections which are always lower) ).
    If you are thinking you will just buy or build your own dental practice, think again. As total loan amounts increase every year for graduates, banks are much less likely to approve for you a practice loan.
    Meanwhile, big dental insurance companies like Delta are chopping reimbursement by 50-75% for the procedures you are working so hard at to make a decent living and be able to pay back these loans. Don’t forget you have to pay 25-60% in state and federal tax before your loan payments because you are a “rich dentist” now.

    Graduates paying their loans under the Income-Driven Repayment plans will be forgiven after 20-25 years. Great right?! Wrong, because you will have to pay income taxes on the $1,000,000+ dollars forgiven. If you live in California that could be as much as 60% or $600,000! With the national debt spiraling out of control due to the previous Administration, it is only a matter of time before our tax rates go through the roof unless the current President can somehow make significant changes to the IBR (aka IDR) plans/terms and/or offer much lower interest consolidation.

    This is the current dismal truth of most new people entering our profession.
    There is a major student loan crisis coming, probably sooner rather than much later. Unless you have a wealthy family member or join the military before dental school, I would advise to goto into another career.

    • Travis

      Hey LoanDDS, have you ever looked at switching repayment plans from IBR to something like REPAYE or PAYE? It might make a lot of sense. Could lower the payment and slow the growth of the loan from interest subsidies. That might also help with qualifying for a practice loan, as banks will look at your total debt service payment every month and less so at the total amount you owe in student debt. That’s been my experience with some people in the past as long as their payment is low the banks didn’t care. If you wanted me to take a look feel free to email me at Travis@studentloanplanner.com. I think you might be leaving money on the table

      • LoanDDS

        Hey Travis,
        A couple years ago, I did attempt to switch to another repayment plan (PAYE) that sounded more appealing, however was deterred by my loan servicer. They told me I could not switch without first withdrawing all of my loans from the IBR program, making a standard payment (Either $5,000 or $10,000 at the time) and then switching the eligible loans to a different repayment plan. I asked if the forgiveness period (25 years, 20 years, etc.) would reset and they thought it would as well.
        Long story short, thats why I let it be. Still looking for a better way now though. I will be emailing you soon.
        Thanks

        • Travis

          There’s also plans like REPAYE that do count the IBR payments towards REPAYE. I think the technical issue is that PAYE has a different forgiveness period. It could actually make sense to switch to PAYE or REPAYE and it depends on your situation. Feel free to hit me up at travis@studentloanplanner.com. What the rep told you is probably accurate, but IBR almost always costs a lot more than the other options if you’re going to go for the taxable loan forgiveness route. Hope that helps!

  • RupiB

    You are most certainly making a valid point. Private practice owners that serve PPO or EPO plans are also scrambling. Insurance companies like Delta Dental have completely monopolized the system. If a dentist ever dreams of dropping off Delta Dental the patients move over to the next dentist that takes their insurance.
    It is a vicious cycle: have the dream profession as a dentist then suffer at the expense of Insurance companies and student loans and practice mortgage etc.
    Having a Tripartite membership with ADA,CDA, Local dental society sucks almost $2k / Year and yet not sure what they do for a dentist when it comes to looking at reimbursement rates for dentists. Even a plumber or electrician makes more than a dentist and yet does not have to pay for enormous student loans.

    • Travis

      I’ve been working on breakeven analysis comparing plumbers to medical professionals like dentist and you’re right it doesn’t look good for the highly educated.

  • DMD503

    In some ways yes, PDS offers cerec crowns, so there is some leeway in what we can charge the patient since there is no lab fee. The the “Dental Plan” they offer to patients without insurance, is discounted to about what the average contracted rate for a PPO would be. On top of this, they are frequently offering 20% off promotions. I regularly do crowns for around 600 dollars, which is about half of what the private practices in the area are charging. I’m helping more people get the care they need, but also doing twice as much dentistry for the same reimbursement. The DSO’s definitely have NOT done a good job in compensating their Dr.’s or retaining good ones.

  • […] my career. But now I couldn’t help but feel cynical. A more realistic picture is painted in this article instead. I know that it was written by someone who runs a business helping people with student […]

  • Its the simple math of income vs expenses that many can’t even grasp in their daily lives. Simply doing the return on investment calculations leaves you in shock of what is needed to achieve this profession. Society places too much emphasis on degrees and social standing amongst the population. Honest jobs and even the trades are often looked down upon but they often have very little investment required to attain them that the ROI is very appealing. But people want the flashy cars and flashy houses and that flashy job title.

  • […] is the belief that an education is worthwhile at any cost. I recently was reading about the astounding levels of debt the average dentist owes. The author of this article finds the average dentist just starting out has an average of […]

  • I had always heard Dentistry was an overrated profession. Pretty crazy to see the actual stats.

    Veterinarians are a similar profession. Anecdotally, the average Vet I’ve seen graduates with about $400,000 in debt, and can expect to make barely over $100,000.

    It’s sad that the allure of a job title pulls people into something that sure smells like a scam.

    • Travis

      My avg vet med client has a balance of $300,000. The ones who open their own practices can make $120,000-$150,000 but that’s certainly the exception. Most work in a clinic as an associate and earn between $70,000 to $100,000 for the majority of their career.

      Essentially the takeaway message is if you’re going into dentistry, you better be ready to run your own practice or you’ll never break even on the degree.

  • This doesn’t paint the rosiest of pictures for the profession. My wife is a practicing dentist as an associate. She graduated from a private dental school three years ago with approximately $400k in student loan debt. You highlight some important issues. Thanks for that, but I’d like to challenge a few of your assessments:

    “No you will not repay your student debt in five to seven years.”

    A dedicated practicing dentist whose sole focus is debt reduction can absolutely pay off this amount of debt in 5-7 years with a dedicated approach. Will it come at the expense of other things? Sure. But if being debt free is important to you, it can absolutely be achieved in this time frame.

    A practicing dentist making $120k and graduating with $300k in loans (example numbers you presented in the comments) who had an effective tax rate of 22% (lets round up to 25%) would be left with $90,000 per year to live on. If the borrower did not refinance, a bulk of their loans would be at 6.8% with some perhaps as high as 8.5%. Assuming an interest rate of 7.5% and a repayment period of 6 years, that corresponds to a payment of just under $5,200/mo leaving just over $2,300/mo to live off of. Would that be difficult? Sure. Impossible? Certainly not. Extend the time frame to 7 years, and cut the rate by ~3 points by refinancing those loans and you have a payment of under $4,200 leaving $3,300+ to live on.

    “A typical debt to income ratio for dental school is therefore $450,000/$120,000=3.75. There is almost no scenario where an individual can repay this level of debt.”

    Using this more extreme ‘typical’ example of $450k debt to 120k income, let’s say this dentist fully funds a 401k, reducing their federal taxable income to $102k/yr. The effective tax rate for this borrower would be just under 18% (lets round up to 20%). This leaves $81,600 to live on. Again, assuming this borrower refinances to 4.5% for a 15 year period, their payments are approximately $3450, leaving over $3300 to live on each month WHILE ALSO maxing out their 401k.

    In each case the assumption was that there were no income increases, no other income deductions to reduce their tax rate, and without turning to IBR, PAYE, etc. Change one of a few variables in the borrower’s favor and the situation improves from there.

    Is someone living an extravagant life on $3,300/month? No. But that doesn’t mean it’s a near certainty of financial disaster if you’re a recently graduated dentist who is in this level of debt. There are options. Live within your means and take an interest in learning the principles of personal finance.

    • Travis

      Your points are fair ones, but how many dentists and their partners do you know who are willing to live on $3300 a month much less $2300 a month? You sacrifice your entire life until your mid 20s and you finally start making a ‘real income’ right when other life demands come at you. Marriage, family, kids, wedding, purchasing a car, house, etc. and it really adds up in a hurry. Add to that the temptation that comes with having every bank in town trying to lend you whatever you want to facilitate more purchases bc you have DDS or DMD behind your name and it’s extremely challenging. I might be a little over the top in the presentation above but it’s intentional bc of how many people tout the idea that dentist is the best high income job out there and very little has been done to challenge the general public’s perception.

      Another point is that interest rates for a 15 year best case scenario for a fixed rate right now are around 5.5% not 4.5%. Also the refinancing companies are not going to offer you a good deal because of the unattractive debt to income ratio, so a dentist could not get such a low interest rate even if they wanted to. So $2300 is more accurate of what would be required than $3300. And if you’re going to have to live on 2300 a month that gradually increases to 3000 a month, then perhaps you should’ve gone to community college because you’d have come out ahead. That’s the harsh reality I want prospective dental students to be aware of before choosing dentistry as a profession.

      For those folks who already have the debt, the only path is maxing the ROI of the degree by saving them as much money as possible, and that’s where my services come in. In your wife’s case, I’d ask about future career plans and if she wants to be an associate for her career then optimizing PAYE. If she wanted to go into practice ownership then setting up REPAYE with interest subsidies to prepare for practice purchase then refinancing once you can get a good rate bc of your lower debt to income ratio

  • Hi, thanks for the thoughtful reply. You of course bring up some very good points. The price of dental school is very high. Too high. Like I said, we know firsthand. I hope you don’t mind, but I want to thoroughly reply to your thoughts.

    “Your points are fair ones, but how many dentists and their partners do you know who are willing to live on $3300 a month much less $2300 a month?”

    My only data point is my wife. We don’t live on $3300 per month. Not even close. Then again, we have two children in a HCOL area and we aren’t trying to pay off our debt in only six years and we also have the advantage of a second income, which presumably the partner in your question above would also have. Taking away our debt payments and expenses associated w/ our children, and we spend roughly $5k between the two of us. It doesn’t scale as well down to a single person, but $3300/month for a single person for a few years isn’t that extreme I don’t think. Plus, if in the same time frame the borrower’s income scaled up an extra $20-30k (not at all unrealistic), that $3300 quickly bumps up to over $4 or $5k. I was simply presenting the case for only a single dentist responsible for themselves and the potential to be debt free in 6-7 years with a realistic (though obviously challenging) repayment strategy. It could be done. After that time frame, that dentist would be able to explode their lifestyle up to nearly $100k by themselves if they so wished.

    “You sacrifice your entire life until your mid 20s and you finally start making a ‘real income’ right when other life demands come at you. Marriage, family, kids, wedding, purchasing a car, house, etc. and it really adds up in a hurry. Add to that the temptation that comes with having every bank in town trying to lend you whatever you want to facilitate more purchases bc you have DDS or DMD behind your name and it’s extremely challenging. I might be a little over the top in the presentation above but it’s intentional bc of how many people tout the idea that dentist is the best high income job out there and very little has been done to challenge the general public’s perception.”

    All absolutely fair points. There’s always temptation for lifestyle inflation. It will come at a financial cost as it relates to paying for your past life decisions.

    “Another point is that interest rates for a 15 year best case scenario for a fixed rate right now are around 5.5% not 4.5%. Also the refinancing companies are not going to offer you a good deal because of the unattractive debt to income ratio, so a dentist could not get such a low interest rate even if they wanted to. So $2300 is more accurate of what would be required than $3300. And if you’re going to have to live on 2300 a month that gradually increases to 3000 a month, then perhaps you should’ve gone to community college because you’d have come out ahead. That’s the harsh reality I want prospective dental students to be aware of before choosing dentistry as a profession.”

    We financed our loans a little over a year ago for 2.8-3.2% variable rates for loan terms ranging from 5 years to 20 years for a couple with a debt to income ratio of over 2.5. Rates have climbed since that time, but we’re still paying under 3.5%. I chose 4.5% to include some buffer. This is a variable rate, which comes with some level of risk, but if you’re aggressive early on when balances are high the risk drops with each passing payment. In addition, our rates are capped at slightly more than what re refinanced from, so it seemed like an easy decision for us. If you were only comfortable with fixed rates, then of course payments would be higher, though the payment would increase to just under $3700, so your living costs would drop to over $3,100, and not $2,300 as you suggest.

    “For those folks who already have the debt, the only path is maxing the ROI of the degree by saving them as much money as possible. . .”

    Well said.

    Thanks for the dialogue. It’s an important subject that most dentists don’t take seriously until they’re already facing this monumental challenge.

  • FBN

    Now I know why there are crooked dentists preying on the public. My daughter recently relocated and a dentist she saw for the first time told her she had 6 cavities. She went to another dentist for a second opinion and her teeth were fine

    • Travis

      Financial desperation definitely has the potential to push people to do things they wouldn’t otherwise. All the dentists I’ve had though have been amazing I must say. Very nice and very fair people

  • AFT

    So it might be a bad investment for general dentists looking at $120k starting, but what about those of us entering a specialty looking at $250-300k starting?

    • Travis

      In that case you’re also going to be looking at doubling your student debt potentially. Orthodontists and OMFS that I work with have anywhere from $600,000 to $900,000 in debt. Endo and Perio maybe somewhere between $500,000 to $700,000. If you’re going to be in a big city then don’t expect 250k to 300k unless you’re opening your own practice. Many of the orthodontist associates in major metro areas on the coasts are not breaking 250k

      • AFT

        Actually I am going into pediatrics, and will be paid during my residency for the next 2 years. I will have about $400k in debt, and I have seen starting jobs as high as $450k but average is more like $250-300k.

        • Travis

          @AFT are you talking associate jobs for that income level? If so that’s impressive and you must be in a great area of the country. That’s not typical for associate pediatric dentists that I’ve spoken with unless they are running their own practice, especially the $400+ club

          • AFT

            Yes, associates first year out of residency. At several of the residency programs I went to they had surveyed last year’s class and all were in the $250-300 there first year out in CA and 300+ in Texas, so some geographical variation. No one was below $250. I saw some ads for associates in the $400 range even one at $500 but in less desirable areas for sure.

          • Travis

            A lot of the peds positions I’ve seen have been in the northeast, so maybe that’s where I’ve seen some of the lower offers. Say you went to USC or U of P in cali starting in fall of 2017 for dental school and then did a 2 year peds residency. I think it would be almost impossible to leave with less than $500k in debt by 2023 when you get out. More likely you’d be closer to $600k in debt if you don’t have any savings or family support. Even with $300k in Cali paying $70,000 to $80,000 a year for 10 years isn’t pleasant, even with salary increases. More power to the folks who do it and there are plenty out there. I’ve also seen a lot of peds dentists with debt to income ratios above 3 that will not be paying back their loans for 20 years. If you love the job and are passionate about it that’s one thing. I just don’t want people to think it’s a golden ticket and then feel trapped in 15 years when they have no choice but to work in that field

  • Dmd12

    I am a recent associate, soon to be practice owner and a former community health dentist and faculty at two schools. I practice in a major metro/saturated area driven by imsurance and this year as an associate i took home 360,000 pay, and that is three days in a pure start up. I have never over treated but have dedicated my complete passion to dentistry. It is not a career that you can show up 9-5 put zero effort and expect to take thos salaray. I listen to podcasts on commute to work, live on forums in down time, and take quality CE. Its hard work, but projections show next year will be 600k income after debt service. And thats working 4 days a week, at the age of 30. It can be done, just it requires so much more, dental school give you just enough not to really hurt some one, not be successful

    • Travis

      Congrats on those numbers. Not saying that no one can possibly be successful in dentistry. Just that you have to basically be willing to bust your butt and run your own small business to make the numbers work in most cases. Any tips for folks leaving school this year? Most people want the safer practice purchase route bc of the immediate cash flow. What made you go the startup route? Very unconventional but definitely has the most upside if you make the right opportunity

    • John

      Where are you working?

  • Matthew Daugherty

    Good article. My wife and I are both dentists with private school student loan debt. I graduated in 2010 and her in 2012. The total amount of debt is most definitely the source of all of our stresses. Its sad to think that we’ve had to put a family, purchasing a house, etc on hold while we deal with this. We have recently looked into the Federal and Statewide student loan repayment programs. The trouble we are having is finding a location for both of us. What are your thoughts on these programs. We figure, if we can find somewhere in a decent location, at least it’ll knock a chunk of our debts off.

    • Travis

      If repaying your debt is the main priority and you’re willing to sacrifice and do whatever it takes, Oklahoma I think has got to be the best place to practice dentistry as a young dentist with debt anywhere. They give sizable state loan forgiveness and the incomes are probably second to none from what I’ve seen in consults. I had a contact there ask me to put my clients in touch with them if they wanted a $250k to $300k associate dentist job next to a reservation 2 hours drive away from the nearest town with more than 20,000 people in it. If you were willing to live in an extreme fashion, you could probably cut your debt in half in 2 years or less. I know Danny and Amber from redtwogreen.com are doing this strategy.

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