The Advantages and Disadvantages of a Dental School Loan

A dental school loan may be necessary to pay the cost of a very expensive graduate education path. Lenders and school admissions representatives may have you believe you will easily be able to make payments once you graduate. While a career as a dentist tends to be fairly lucrative from the start, there are many downsides to taking these loans that can make them a challenge to pay back after you complete many years of school.

Advantages of a Dental School Loan

Immediate vocational preparation: Perhaps one of the biggest advantages of a dental school loan is provided by dental school itself. When you graduate from dental school, you have the tools immediately necessary to go out and secure a higher-than-average paying job. Some other graduate degrees, while honorable and challenging, do not often have a definitive career path accessible immediately upon graduation. The skills of a dentist, if you pass your boards, will prepare you for a vocation the day you graduate.

Low rates and flexible payment schedules: Because dental students have a high rate of employment and stable jobs, it is easy for lenders to recover debts from dentists. Any lender will look at this statistic and realize they have a good chance of making the entire loan sum back, even if it takes awhile. This is called a "low risk" loan. Most student loans are high risk, but dental loans, legal loans and medical loans are lower risk. Lenders reward low risk loans by allowing for slightly lower interest rates and more flexible payment periods. Dental students usually have the option to defer loans until after graduation, for example.

Disadvantages of a Dental School Loan

Lengthy loans: Just because a loan is flexible does not mean you can pay it off quickly. In fact, the more flexible the loan and the more deferment periods you opt for, the longer your loan becomes. Even if you are paying a low sum monthly, it can be daunting to have a 30-year student loan at the age of 26-30, when most dental students graduate. You could be well-advanced in your career before the loan is paid off in its entirety, setting you up for higher rates on mortgages and less financial freedom down the line.

High cost of education: Undergraduate school is expensive, and school becomes more expensive when you add the cost of a graduate education. The complete cost of education to become a dentist can be as high as $400,000, plus interest and fees on the loans. You must also factor in the amount of money you could be making by having a job during those many years, called the "opportunity cost." If you truly want to become a dentist, then it can be an enjoyable and prosperous career with many benefits. Students looking to become a dentist because they think they can suddenly become rich upon graduation will need to factor in all these costs to see that they will continue to owe in the many years to come. 


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