Hinman Connects Blog

Six Critical Steps to Paying Off Dental School Debt
Posted: 2/21/2018

My colleagues and I have watched dental school and education costs grow at an astonishing rate in the past few years during my work with Cain Watters & Associates (CWA) and its affiliate, National Dental Placements (NDP).


The rise in student loan debt is one of the most significant challenges for a new doctor; it’s not uncommon to meet recent graduates with loans that exceed $500,000, with interest at 7% or more.  New doctors and residents almost always start their careers with a goal of working for several years while paying down burdensome debt.


With student debt looming, and promises of signing bonuses and a predictable work environment, we can see why many young dentists find the corporate dentistry route appealing. A good salary to start paying down debt is hard to pass up.


What they don’t understand about this strategy, is that it may ultimately have a negative impact on their financial future, and consequently, on their ability to own their own practice. It’s vital that new doctors understand how their debt decisions can affect their future—because the wrong post-graduate choices can cost millions of dollars in the long run.


We know corporate dentistry’s recruiting message sounds very appealing. But to make an informed decision, young doctors need to understand that a quick fix may impede a big future financial win.


To eclipse corporate’s bright lights, those of us who advise on the business and personal finances of successful doctors are all about spreading the word and educating up-and-coming doctors on the benefits of ownership. Owning your own practice is one of the secrets to not only paying off your student debt, but it can also pave the way for a financially flexible and secure future.


Spoiler Alert: It involves paying the minimum amount on your student loan debt, saving as much as possible to invest in yourself and owning your own practice.


So how does a young doctor get on the right path?  We’ve summed it up in six steps: 


1.     Get out of school and find a busy private practice to hone skills and increase production.

As an associate, think of how to own and constantly be positioning yourself to find an opportunity for practice ownership. During this time, pay the minimum amount on your student loans. The goal is to save as much cash as you can to look good to a lender.


2.     Invest in professional growth.

Take CE, network, create relationships and soak up knowledge about both dentistry and running a business.


3.     Secure a practice ownership opportunity.

This can be through entering a partnership, buying a walk-away practice or even creating a start-up, but the goal is to own something two years post-graduation or at the completion of residency.


4.     Invest in that practice.

Market and grow the practice to a point where you are extremely busy. Make the practice lean, by reducing the overhead as much as possible.


5.     Set up a pension plan.

This is the perfect time to hire a CPA that can help you navigate your current career situation and your future financial ambitions. Remember, compounding interest and saving early is the key to success.


6.     Pay yourself.

Not all debt is created equal. Student loans are arguably in the “good debt” category, and as long as you keep up with your payments, it does not have to work against you. Now that you own the practice and receive the benefits of ownership, you make more money. It’s the perfect time to refinance your student debt and start to quickly pay it off. You are now at the place in your life where you can have more money to both pay toward debt, while still investing and living.


The key to this puzzle is not who gets out of debt first, but who ends up with the most financial flexibility and the largest net worth—to maintain your standard of living long into retirement.


Want more financial knowledge? Visit, and be sure to attend at last one of my four lectures at the Hinman Meeting, March 22-24.


Cain Watters & Associates LLC is an investment advisor registered with the Securities & Exchange Commission. Information provided does not take into account individual financial circumstances and should not be considered investment advice to the reader. Request form ADV Part 2A for a complete description of CWA’s financial planning and investment advisory services. There is no assurance that other client actual results will be similar to information presented. Estimated future results may not be obtained due to economic, business and personal circumstances.


Charles Loretto is partner at Cain, Watters and Associates, the founding owner of NDP, a national dental transition firm, and a partner with Elite Dental Alliance, a national dental buying club for dentists.  Charles teaches courses at dental schools, dental study clubs, state and national dental meetings on financial decisions a dentist must get right.


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