Written by: Drew Vanderbrook, D.D.S. (Dallas County Dental Society Member)
Whether you are graduating from dental school this month or you have been out of dental school for more years than you would like to admit, we can all agree on something. Dental school is not cheap. Combining dental school loans with the possibility of undergraduate student loans, many dentists get their licenses accompanied by a mountain of student loan debt that immediately becomes an issue. An American Student Dental Association survey shows an average student loan debt of $260,000. Dentists are not the only ones with this issue. The outstanding educational debt in our country is currently over $1.2 trillion. One option that can help: refinancing your student loans.
If you are considering refinancing your student loan debt, you will want to factor in the loan features that could be lost when choosing to refinance with a private lender. Federal student loans generally allow for deferment and forbearance if you undergo a financial hardship. Federal loans also offer programs for loan forgiveness for those that work in programs that qualify for the Public Service Loan Forgiveness Program (PSLFP). Finally, when choosing a private lender to refinance your loan, you lose eligibility for income-based repayment options. These options are available for borrowers with high debt-to-income ratios that pay their loans based on their income level (usually 10-15% of discretionary income) and allow any debt remaining after 20 to 25 years to be forgiven.
If none of those features apply to your loans, you may want to consider student loan consolidation and refinancing. Refinancing your student loans at a lower interest rate can reduce your monthly payments and help you pay off your debt faster. I was able to complete the process of refinancing my student loans a few years ago and the process was pretty simple. Being a member of organized dentistry allows for added benefits with some private lenders.
The Texas Dental Association preferred lender for student loan refinancing is SoFi. SoFi is the largest provider of student loan refinancing and has helped refinance over $10.6 million for TDA members. SoFi offers TDA members a 0.125% rate reduction when you register through www.SoFi.com/TDAPerks and allows you to refinance and consolidate federal and private student loans.
The American Dental Association has a partnership with Laurel Road for its members. Laurel Road gives qualifying ADA members a 0.25% rate reduction and also allow you to consolidate federal and private student loans. Laurel Road also allows dentists graduating and going into a residency program the option of paying only $100 per month through their training, regardless of how much is refinanced.
As you can see, refinancing your student loan debt can be an important step in managing your finances. The application process for each lender is very straightforward. Each lender offers variable and fixed rates and a variety of term lengths that can fit your budget. Different lenders offer different benefits and communicating with each lender can help you determine which lender might be the best fit for you and offer you the best interest rate for your loans.