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 January 31, 2022
, based on the extension signed by President Biden on August 6, 2021. This means that interest on any federally owned loans you
have (ie. Direct Loans), including loans from college or a post-bac program, will not start accruing interest until February 1, 2022.
- 17% of dental school graduates in the Class of 2020 reported no student loan debt.
- Average educational debt for all indebted dental school graduates in the Class of 2020 was $304,824, with the average for public and private schools at $270,125 and $349,730 respectively.
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, 2021 is 5.28% 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. You should always maximize your borrowing with the direct unsubsidized loan before taking out a direct PLUS.
- 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, 2021 is 6.28% fixed; the maximum rate on new loans is 10.5%. Note the rate on direct PLUS (Grad PLUS) 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
- Interest 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.