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New Dentist Finances

With student loans, consider options in repayment strategy

Dr. Timothy Oh

Dr. Timothy Oh

Dr. Timothy Oh, of Ellsworth, Maine, graduated from dental school in 2008 with over $300,000 in student debt — a mixture of federal and private loans from various lenders, along with an education loan acquired prior to dental school.

“I feel student loan debt is one of the most serious burdens facing today’s graduates,” said Dr. Oh, New Dentist Committee District 1 representative.

He received some help from the Finance Authority of Maine, a state-based financial aid program. He received $80,000 in loan assistance for treating patients at a nonprofit clinic in an underserved and rural area for four years.

“The grant enabled me to get started with my loans,” Dr. Oh said. “But I was still left with a six-figure loan.”

The average dental student in the class of 2014 left school with about $247,000 in student loan debt, according to the American Dental Education Association.

For new dentists seeking ways to ease the burden of staggering student loan debt, there are options — such as loan consolidation, refinancing and government base repayment programs — that are worthy of consideration as part of a repayment strategy. But like all major financial decisions, they come with advantages and drawbacks.

Consolidations vs. refinancing

Federal loan consolidation combines multiple government-sponsored loans into just one loan. It takes the weighted average interest rate of the loans being combined.

Refinancing is when a borrower applies for a loan under new terms, and uses that loan to pay off one or more existing student loans. Unlike consolidation, refinancing is only available from private lenders. Interest rates are not based on a weighted average of the existing loans’ rates. Instead, a private lender will typically use a borrower’s credit score and other financial information to provide a new interest rate on the consolidated loan.

Consolidation: Pros, cons

One good reason to consolidate federal loans is convenience: There is only one loan, one loan servicer, one payment and one place to file forms.

Dr. Oh consolidated a “batch” of his student loans to reduce the number of monthly checks he had to write. Consolidating federal loans also allows borrowers to convert former nondirect loans to direct loans. Only direct loans (Stafford, Grad PLUS and Federal Consolidation Loans borrowed through the federal government’s Direct Loan Program) are eligible for Public Service Loan Forgiveness.

Also, repayment terms may be extended to 30 years, which lowers monthly payments but adds to total repayment costs if it takes the full 30 years to repay.

Drawbacks in consolidating federal loans include a lengthy and cumbersome process (may take 60-90 days), potential for a slightly higher interest rate (interest rate on consolidation loans is a “weighted” rate of all loans being consolidated, rounded up an eighth of a percent then fixed for the life of the loan) and loss of grace periods on loans being consolidated if students consolidate too early.

Refinancing: Pros, cons

Even before graduating from dental school, Dr. Adam Shisler, a pediatric dentist in Houston, had decided to refinance his loans, about $241,000, all of which were Federal Stafford Loans.

Dr. Shisler

Dr. Shisler

In spring 2014, he began the application process to refinance his loans through SoFi, a peer-to-peer lender based in San Francisco. Refinancing can help borrowers pay lower interest rates on their student loans, thus saving thousands of dollars throughout the life of the loan, though it comes with some risks as well. Similar to taking out a mortgage, borrowers can choose between a fixed rate loan and a variable rate loan, or both.

Fixed rate loans typically have higher rates than variable rate student loans but will remain the same over the life of the loan. Variable rate student loans generally are lower but may change, including the risk of going up, on a monthly, quarterly or annual basis.

Dr. Shisler said he was approved for a five year, fixed rate loan in an accelerated repayment program, lowering his interest rate from 6.8 percent to 4.3 percent — saving him about $70,000 in interest.

However, there aren’t many lenders that will include federal loans as part of a refinancing plan. Dr. Shisler found only three to four other institutions that would refinance his loans.

As for disadvantages, graduates who refinance federal student loans will lose many of the benefits that come with federal loans, such as loan forgiveness and income-based repayment programs. If there is hardship, a dentist won’t be able to apply to defer monthly payments.

Federal, state loan repayment options

Federal and state programs offer student loan repayment assistance, often in exchange for services in a health care shortage area.

Federal options include programs sponsored by the Army, Navy, Air Force, Veteran Affairs, U.S. Public Health Service, National Health and Human Services, Indian Health Service and more. States have their own programs — such as the FAME program that Dr. Oh participated in — that are independent of the federal programs.

“(FAME) is a competitive program, with an extensive application and interview process,” said Dr. Oh.

In addition, many dental schools and advanced education programs may have financial assistance and loan repayment options. Contact your school’s financial aid office for more information.

Research and resources

Dr. Oh recommends that dentists conduct research before signing up for a repayment program. He is now considering refinancing as a next move.

“I just started talking to companies about refinancing and haven’t made a decision,” he said. “It’s sometimes too depressing to think about, but there are options that can help.”

In addition, Dr. Shisler said the most important thing a soon-to-be dental school graduate or new dentist can do before making any decisions is to go on a fact-finding mission on the status of their loans.

“They need to ask, ‘Where are all my loans from?’ ‘Are they subsidized, unsubsidized?’ ‘What are the interest rates for each of them?’ ‘What is their loan health?’” said Dr. Shisler. “Know your loans before applying because you’ll need that information in your application.”

For more information on consolidation and refinancing, visit the Center for Professional Success at Success.ADA.org and search for “Federal and State Loan Repayment Options.” You can also find information at ADA.org/student. ADEA also

has educational debt management materials at ADEA.org.

Show movies in your practice? Discount on licenses available until March 31

Dentists have until March 31 to purchase a reduced-rate license to legally show movies and other audiovisual programs in their waiting rooms and exam rooms.

Until March 31, the Motion Picture Licensing Corporation will be offering an Umbrella License to ADA members for $250. Dentists who purchase the license have access to a wide array of movies, popular children’s programs, educational documentaries and other audiovisual content to show in a copyright compliant manner.

Movies are available from more than 650 Hollywood studios, independent, special interest, children-related and foreign producers. Once dentists secure a license, they can rent or buy movies to play without any further reporting.

For information on how to purchase the license, click here.

What movies do you have on in your practice?

Research: Americans have more choices for dental benefits in 2015

dental benefits 2015The ADA News reports that a new research brief from the ADA Health Policy Institute found that the dental benefits market in 2015 provides more choices for Americans, and increased transparency by the federal government makes it easier to navigate the system.

But even with more choices, the cost of purchasing dental insurance may be too high for consumers.

The Affordable Care Act extended health insurance to millions of Americans in 2014. About 6.7 million Americans gained health insurance and 1.1 million gained stand-alone dental benefits through the health insurance marketplaces in 2014. Individuals had until Feb. 15 to meet the law’s individual mandate requirement to enroll in a health plan, facing tax penalties if they failed to do so.

More medical plans in more states include embedded dental benefits and there are more family stand-alone dental plans available than last year, according to “More Dental Benefits Options in 2015 Health Insurance Marketplaces,” by Cassandra Yarbrough, health policy researcher, Marko Vujicic, Ph.D., chief economist and vice president of HPI, and Kamyar Nasseh, Ph.D., HPI economist. In an analysis of 40 states, 35.7 percent of medical plans offered through the marketplaces have embedded pediatric or family dental benefits, an increase over 2014 when 26.8 percent of medical plans had embedded pediatric or family dental benefits.

To read the full story, click here.

I’m a new associate dentist…what does the ADA do for me?

From supplying life insurance, advice on which board to take, and resources to make your CV shine; the ADA has many benefits to offer. In this blog post, I’ll be focusing on what the ADA can do for the recent graduate as well as a dentist entering an associate or partnership position. This was myself a few years ago. Unfortunately I was unaware of these items below that the ADA offered; however, I would have utilized almost all of them. Hopefully the resources that I go over in this issue will be useful to you — the new dentist!

Dr. Sinclair

Dr. Sinclair

Classifieds

Finding a job after graduation was much harder than I originally anticipated. During dental school I consistently heard about the rapid retiring rate of general dentists and the lack of new dentists entering the job scene creating a huge demand.

Well if you add in a recession and a few more dental schools opening up in the US, let’s just say jobs weren’t as plentiful as I initially believed.  Besides even if there were jobs out there, where was I supposed to look?  I had never seen a job posting for a dentist on the pages of monster.com or Craigslist.

Did you know that many state dental associations have their own classified section for dental jobs? While writing this article, I paused to take a moment to check out the listings. With the help of the Virginia Dental Association, I was able to view over 25 postings for general dentist jobs in almost every part of the state. This consolidated area of postings is a great way to see what positions are available as well as a fantastic resource for posting that CV you worked so hard on. Visit the VDA classifieds here. The ADA classifieds can be found here.

Contract resources

Congratulations! You’ve been offered a job, or maybe two or three. Well how do you know this contract agreement you are getting ready to sign is fair? Do you have a 5, 10, 20 mile non-compete, and do you know what that entails?

Just imagine if there was a non-compete clause in your contract that made and job locations in a 20-mile radius around your current employment location off limits. If this was the case, you could find yourself having a 30-45 minute commute for any future employment opportunities. How will you be paid on production, collections or salary? Are you going to be an employee or an independent contractor?  Are you or your employer responsible for paying lab fees? These are just some of the questions I had to answer looking over my initial contracts, and I was unfamiliar with almost all of these terms. Each one of these choices listed above has its own pros and cons, and that is where the ADA comes in.

The ADA has a free resource for members, “Dentist Employment Agreements: A Guide to Key Legal Provisions.” This document explains many of the terms and provisions common to dental employment agreements. The material is presented in a manner to help you consider and review a contract employment. You can also contact the ADA legal department for help understanding the language in your contract. However, remember this is not a substitute for legal advice or a lawyer’s review of your contract. That scenario above about a 20-mile non-compete creating a long commute happened to a fellow dentist.  I think that makes this one service by itself worth every penny of your ADA membership — at least from all the gas money you would save.

Ethics Hotline

Chances are after you have signed your employment contract you will end up working with at least one other dentist.  Many of these dentists have gone through very similar, if not the exact, training that you went through. What happens though if you start seeing shared patients, and you disagree with the recommended treatment plan? The first step would be to discuss the plan with the other dentist(s), but afterwards if you still feel as is if it excessive or unnecessary treatment where do you turn? The ADA created their Ethics Hotline (1.800.621.8099) for instances like this. The ethics hotline is place to discuss questionable issues that may arise in the day to day happening of a dental office in an anonymous environment. Personally I have never needed this, but I find it very comforting that the ADA offers this resource to its members.

Reduced Dues

One of the most common talked about items as a new dentist is the amount of debt that has been incurred. I, like many of you, had to take out student loans to cover the cost of my education as well as my living expenses. I read just the other day where the average dental student debt upon graduating is around $240,000. The ADA and its components understand this as well.  As a new dentist, the memberships rates are drastically reduced the first 5 years of practice and are even free the first year of practice. For more information, click here.

Being an associate can be very challenging and rewarding at the same time.  It will give you the opportunity to develop your speed and skills as a dentist while in many cases working with a mentor. Associateship will introduce you to the fellowship of dentistry that the ADA embodies.  I had the privilege of working alongside several great dentists in varying office environments during my associateships and call many of those dentists’ great friends today.

This blog post, reprinted with permission, originally appeared in the Virginia Dental Association journal. Dr. Cappy Sinclair is a New Dentist Now guest blogger and a 2009 graduate of Virginia Commonwealth University. Dr. Sinclair currently serves on the Board of Trustees at the Academy of Cosmetic Dentistry, as member of 3M’s Council for Innovative Dentistry, and as an ambassador for the Dawson Academy. He started his own practice Coastal Cosmetic Dentistry 3 years ago from the ground up and is more than happy to share his success and failures with fellow new dentists. He is a member of the American Dental Association and the Virginia Dental Association. To contact Dr. Sinclair, email him csinclair@smilevabeach.com.

Register for 2015 ADEA Dental Student Virtual Fair

Dental students interested in learning about what comes after graduation, and how to juggle residency applications, writing a resume, leadership and different types of dental careers, should register for the 2015 ADEA Student Virtual Fair.

The free, live, online event will be held 4-10 p.m. EST on April 2. To register, click here.

The 2015 ADEA Dental Student Virtual Fair is designed to give dental students free access to information and connect them with professionals from ADEA, dental specialties and dental companies who can answer their questions in real time.

In addition, two ADA New Dentist Committee representatives — Drs. Kendra Zappia and Jon Pascarella — will be participating in a panel presentation from 7-7:30 p.m. The ADA will also have a booth for attendees to visit.

All dental students are welcome to attend the event. Recent graduates interested in learning about different career options are also welcome to attend.

Students will be able to:

  • Log in to the event from any Internet connected device.
  • Speak directly with dental specialty program directors and association professionals, military recruiters and corporate sponsor exhibitors in live text chat rooms.
  • View presentations about financial aid, interviewing for residencies, ADEA PASS and much more.
  • Download and save resources from dental professionals to access after the live event.
  • Learn about the ADEA PASS application process.
  • Listen to a keynote presentation from the ADEA Chair of the Board, Dr. Lily Garcia.

For more information, including the exhibitor list and presentation lineup, click here.

Dental groups urge Congress to prioritize student debt

According to ADA News, the ADA, American Dental Education Association and American Student Dental Association urged Congress to prioritize student debt as the Senate education committee opened hearings on reauthorization of the Higher Education Act.

dental student infographic “We are extremely concerned about the alarming levels of educational debt that dental students face at graduation,” the dental education, professional and student organizations told the Senate Health, Education, Labor and Pensions Committee in a letter.

“The cost of dental education should not be a prohibitive factor for those wanting to enter the profession,” the organizations’ volunteer and staff leaders said. “The cost of dental education should not be a prohibitive factor for those wanting to enter the profession. For that reason, we urge you to prioritize the following when reauthorizing the HEA and considering other student loan legislation.”

  • Lower federal graduate student loan interest rate(s) and the total amount of interest that can accrue on federal graduate student loans.
  • Enable federal graduate student loans to be refinanced more than once to take advantage of lower interest rates and better economic conditions.
  • Extend the period of deferment for repaying federal graduate student loans to the maximum extent practicable.
  • Simplify and add more transparency to the federal graduate student loan application process.
  • Remove the barriers that prohibit those with private graduate student loans from taking advantage of federal student loan forgiveness/service payback programs.

To read the full story, click here.

New dentist wins ADA monthly free management course giveaway

Congratulations to Dr. Radip Uprety, of Bucksport, Maine, for being the February winner of the monthly giveaway for a free ADA Executive Program in Dental Practice Management class.

Clinical and BusinessThe ADA Executive Program in Dental Practice Management is a video-based, e-learning certificate program offered through the ADA Center for Professional Success that takes on the tough practice management challenges today’s dentists must master. This includes reducing costs, enhancing marketing strategies and practicing amid increased regulation.

These six online courses help dentists navigate the business side of dentistry:

  • Legal and ethical issues in dental practice.
  • Negotiation and conflict management.
  • Understanding leadership.
  • Business strategy and systems.
  • Dental team management.
  • Financial management.

For each course completed, verification of potential continuing education credits will be issued. One winner will be named each month this year.

To enter the giveaway, click here.

Visit PMcertificate.Success.ADA.org or call 1.855.598.6559 to learn more about the program.

Going somewhere? Save with ADA membership

Going to Chicago or Washington D.C. for a conference? Maybe taking a vacation abroad?

Whether it’s for business or pleasure, you can save money through your ADA membership on hotels, car rental and flights.

Loews Madison Hotel in Washington, D.C.

Loews Madison Hotel in Washington, D.C.

If you’re coming to Chicago for a conference at ADA Headquarters or just visiting the Windy City, members can save significantly at various participating Chicago hotels: Four Seasons Chicago; Hilton Suites; Hyatt Chicago Magnificent Mile; Loews Chicago Hotel; Ritz-Carlton; W Chicago Lakeshore; Westin Michigan Avenue.

Members can reserve for themselves or make reservations for friends, family or staff.

In Washington, D.C., you can request the American Dental Association preferred rate at Loews Madison Hotel, a luxury hotel located near various monuments and museums.

Going abroad? ADA members can save 10 percent off the Hyatt daily rate at participating Hyatt Hotels & Resorts — including Hyatt, Hyatt Regency, Park Hyatt, Grand Hyatt, Andaz, Hyatt House and Hyatt Place — worldwide. For additional information on the Hyatt member benefit program, click here.

Those who need a car when traveling, ADA members get preferred rates from rent-a-car services such as Alamo, Enterprise and National. For more information, including full descriptions of the benefit program, click here.

Lastly, if you’re traveling for a qualified ADA-sponsored meeting, you can save money with Gant Travel and United Airlines.

For more information on the various travel benefits ADA members receive, click here.

ADA offers resources for new dentists, dental students

Recognizing that dental students and new dentists have different needs, the ADA offers a plethora of services, resources and benefits to help them succeed in their professional and personal lives.

“As dentist, we are professionals, and the ADA is our professional organization,” said Dr. Chris Hasty, vice-chair of the ADA New Dentist Committee. “I see the ADA as the lighthouse of dentistry, guiding our profession to a safe and ethical future, and steering us away from the dangers of outside entities.  As new dentists, we have our whole career ahead of us, and the ADA is here to help and see us prosper.”

Dental students and new dentists receive benefits all other members get, including travel benefits, health and wellness information, continuing education programs and access to care initiatives. However, certain ADA products and services are tailored to their needs.

Financial planning

CalculatorAdjusted for inflation, the average dental school debt for the class of 2000 was $118,515. For the class of 2013, it was $215,145, according to the annual ADEA Survey of Dental School Seniors. Now add in the cost of starting a practice, and it can get overwhelming.

The ADA provides dental students and new dentists with resources to help them stay on track for a bright financial future.

Provided by Wells Fargo Practice Finance, and developed with dentists in mind, the Center for Professional Success provides business planning calculators, including a debt load calculator, which can help new dentists and dental students determine how much they can responsibly afford to borrow for personal and business use. Other calculators available are the loan payment calculator, which estimates monthly loan payment. The loan term calculator helps dentists see how much faster they can pay off an existing loan by adding an additional fixed amount to their monthly payments.

For students seeking financial assistance, the ADA Foundation has a scholarship program for those pursuing careers in dentistry, dental hygiene, dental assisting and dental laboratory technology. The number of ADA Foundation scholarships awarded is dependent upon available annual funds. To learn more about the ADA Foundation scholarships, visit adafoundation.org/en/how-to-apply/education. The ADA also provides information on various federally funded scholarships.

In addition, the ADA provides information on dental student loan repayment programs and resources, including federal and state programs, that offer student loan repayment assistance, often in exchange for services in a health care shortage area. To learn more, visit ADA.org/student or request more information from studentaffairs@ada.org.

Understanding licensure

Understanding LicensureDental licensure marks the transition between dental school and dental practice. The ADA provides a free guide called Understanding Licensure, a resource to help guide dental students through the licensure experience.

The guide takes new dentists through the application process, preparing for the clinical exam, notification and appeals, licensure by credentials, etc.

To view the Understanding Licensure guide, click here.

Finding a job

The ADA CareerCenter is the official online job board of the ADA, a resource for searching dental career opportunities or recruiting dental professionals.

The resource allows professionals to search or post job opportunities for dentists, oral surgeons, orthodontists and other qualified professionals who specialize in dentistry. Visit the ADA CareerCenter.

Staying up-to-date

The ADA can also help new dentists and dental students stay current on the latest dentistry news as well as scientific findings and studies.

The Journal of the American Dental Association and the ADA News are free to members. These publications are available on ADA.org/publications, along with the ADA Dental Product Guide, the ADA Catalog and ADA E-Communications, which include the ADA Morning Huddle, a daily bulletin of the latest news complied exclusively for ADA members.

New Dentist NewsIn addition, new dentists and dental students receive the ADA New Dentist News, a quarterly publication distributed as an insert in the ADA News as a member resource. To read the latest ADA New Dentist News, click here.

In 2013, the ADA New Dentist Committee launched New Dentist Now, a blog where new dentists can keep up with their colleagues, stay fresh on issues in dentistry and find out about events.

For scientific findings and studies, new dentist and dental student members can access full-text articles online with instant access to over 280 journals through the ADA Library & Archives website. About 95 percent are strictly dental journals. The other 5 percent have medical-dental crossover. This includes in-house access to the New England Journal of Medicine articles going all the way back to 1812. To access the ADA Library & Archives online, click here.

Leadership and Advocacy

Comprising 17 members representing each of the ADA’s regional districts, the New Dentist Committee is a national committee of the ADA Board of Trustees. Its mission: To serve as the voice of the new dentist within the ADA. The committee advises the Board on member benefits and the member experience from a new dentist perspective, as well as, on policy affecting new dentists, among other things. Committee members also provide insight on the issues and needs of new dentists through their liaison roles on the other 11 ADA agencies.

The New Dentist Network engages new dentists, develops leaders and contributes to and influences resources that add member value. It has over 800 contacts and is comprised of new dentist committees and volunteers, ASDA leaders and society staff at all levels of the ADA.

In addition, the New Dentist Committee oversees and actively participates in the Success Dental Student Programs conducted in dental schools around the country. The Success Dental Student Programs provide the next generation of dentists with ethical and practice management information and valuable ADA resources for the transition from dental school to dental practice.

“As a new dentist it is important to be a member of the ADA because we are the future of Dentistry,” said Dr. Michael LeBlanc, New Dentist Committee chair. “In order to help set policy we must have a voice. No better place than the ADA to help set policy and the success of dentistry now and in the future.”

To get involved or for more information, call your state or local dental society, or contact the ADA New Dentist Committee office at newdentist@ada.org or 1-312-440-2386.

With student debt, more young adults live with their parents

After graduating from dental school, did you move back in with your parents?

dental student infographicAccording to a Wall Street Journal article, more young adults are living at home with their parents because of high student debt, along with joblessness and rising housing costs.

A $10,000 increase in student debt per graduate in a U.S. state is associated with an additional 2.9 percentage point rise in the rate of 25-year-olds living with parents, the article says, based on an analysis by the Federal Reserve Bank of New York.

Adjusted for inflation, the average dental school debt for the class of 2000 was $118,515. For the class of 2014, the average debt was $247,227, according to the American Dental Education Association.

The WSJ article said the New York Fed study is the latest to show that young Americans are now much more likely to delay leaving home, or to “boomerang” back, as young people weighed down by student debt may try to save money by staying home.

To read the full WSJ article, click here.