You may have to borrow to help pay for dental school, but the good news is that with smart budgeting and responsible borrowing, you should find repayment of your student loan portfolio manageable.
SPECIAL NOTE: In response to the Coronavirus pandemic, the CARES Act has set interest rates on all federally owned loans (which includes all Direct Loans) at 0% from March 13, 2020 through September 30, 2020. However, a recently signed executive order has extended the 0% interest rate on all federally owned loans through the end of the year. This simply means that any federally owned loans you have (ie. Direct Loans), including loans from college or a post-bac program, will not be accruing interest until January 1, 2021.
- 17% of dental school graduates
in the Class of 2019 reported no student loan debt.
- Average educational debt for
all indebted dental school graduates in the Class of 2019 was
$292,169, with the average for public and private schools at $261,305
and $321,184 respectively.
- 19% of indebted dental school
graduates in the Class of 2019 reported debt less than $200,000.
- 25% of indebted dental school
graduates in the Class of 2019 for public and private dental schools
reported debt of $200,000 to $300,000.
- 39% of indebted dental school
graduates in the Class of 2019 reported student loan debt of more than
Federal Direct Unsubsidized Loans
Direct unsubsidized loans form the foundation for most dental school students’ loan portfolios. Your school may require some borrowing in this program before considering you for other types of aid.
Interest rate: The rate on new loans changes each July 1 and is then fixed for that loan throughout the life of the loan. The current rate for new loans disbursed on or after July 1, 2020 is 4.30% fixed; the maximum rate on new loans is 9.5%.
Terms: Up to $40,500 per year, with a cumulative maximum from all degree programs of $224,000. The annual amount may be prorated higher based on budget length. These loans are not based on credit.
Federal Direct Plus (Grad PLUS) Loans
These loans are used to supplement borrowing from other loan programs, including direct unsubsidized loans.
rate: The rate on new loans changes each July 1 and is then fixed for that loan throughout the life of the loan. The current rate for new loans disbursed on or after July 1, 2020 is 5.30% fixed; the maximum rate on new loans is 10.5%. Note this rate is always one percentage point higher than the rate on direct unsubsidized loans.
Terms: You may borrow up to your
COA (Cost of Attendance) each year with direct PLUS, less other aid (including direct unsubsidized), thereby negating the need for private loans during school. These loans are based, in part, on the borrower being “credit ready,” meaning no adverse history of payments on other obligations, such as 30 or 60 day delinquencies.
Health Professions Student Loan (HPSL)
These are federal loans from the Department of Health and Human Services (called Title VII) awarded by the health professions school or dental school. The loans are based on exceptional financial need (contact your health professions school or dental school FAO regarding availability and
rate: There is a 5% fixed rate for the life of the loan.
Terms: Subsidized (interest free) during school and during a 12-month grace period. Repayment is generally over 10 years with level payments. HPSL are not eligible for repayment with income driven repayment options plans and are not eligible for forgiveness.
Loans for Disadvantaged Students (LDS)
Similar to a Health Professions Student Loan, but awarded specifically to students from disadvantaged backgrounds (contact your FAO regarding availability and application).
Your school may directly provide loans with more favorable terms and conditions. See your FAO for details. Institutional loans are not eligible for repayment with income driven repayment options plans and are not eligible for forgiveness.
Private loans have limited repayment and postponement options when compared with federal loans. Always speak with your FAO before applying for a private loan.
Interest rate: Rates may be variable or fixed, depending on the lender, with lower rates usually reserved for borrowers who secure a creditworthy cosigner.
Terms: Unsubsidized with (in most cases) annual and cumulative caps on borrowing amounts. These loans are based, in part, on borrower being “credit worthy,” with a borrower's credit score considered in both approval and pricing. Private loans are not eligible to be repaid with income-driven repayment plans and are not
eligible for forgiveness, including Public Service Loan Forgiveness.