Dental School Loan Forgiveness Programs

Dental school debt forgiveness is possible if you plan to work in an underserved area or for the government or a nonprofit organization.

Looking to get your dental school debt forgiven? You have a few different options. You can work in a health professional shortage area for two to four years, work full-time in public service for at least ten years, or wait to have your remaining loan balance written off after making monthly payments for at least two decades.

Depending on your earnings during the pandemic, you also may be able to take advantage of the Biden administration’s plan to provide sweeping debt forgiveness to tens of millions of federal student loan borrowers. You can get up to $20 thousand knocked off your balance if:

• You filed taxes in 2020 or 2021, and your adjusted gross income, or AGI, was less than $125 thousand — or $250 thousand if you’re married.

• You borrowed federal student loans before June 30, 2022.

• You received a Pell Grant in college.

Related: Biden Student Loan Forgiveness

Dentists, dental hygienists, and assistants can have their entire federal student loan balance forgiven tax-free if they work full-time for a government or nonprofit organization for 10 years.

Unfortunately, most dental professionals won’t qualify for PSLF because there are few job openings in public service. So few, in fact, many jump directly into private practice after completing dental school.

For those who can find qualifying employment, the PSLF Program is a boon — especially after the Education Department temporarily tweaked the program’s rules so that more types of payments qualify. Until October 31, retroactive PSLF credit is available for people who made late payments and payments that are less than the full amount owed. Payments made under the wrong repayment plan or those made towards the wrong type of loan also count!

Learn More: Limited PSLF Waiver Opportunity

Income-driven repayment plans are a lifesaver if you’ve had shaky income for several years. They not only cap your bill on your federal loans at 10-20% of your discretionary income, theybut also wipe out your remaining balance after making steady payments for 20-25 years.

Normally, the IRS counts the loan amount forgiven as extra income on your tax return. But that’s not true for the next few years. If your loans are forgiven for any reason from now until 2026, you won’t pay taxes on the money written off.

While IDR plans are great for those who’ve struggled with payments and needed forbearances over the years, they aren’t beneficial to higher earners. Because the payments are tied to your income, the more you earn, the more you’ll pay. If you make too much, you’ll pay off your loans several years before they’re eligible to be forgiven.

This is why the smarter financial move for many dentists is to refinance with a private lender to get a lower interest rate. Doing so isn’t without risk — you’ll lose access to federal benefits like affordable student loan payments and forgiveness opportunities from the Education Department. But you’ll pay less interest each month, saving you thousands in the long run.

You can use an online marketplace like Credible to compare multiple rates with different lenders without affecting your credit score.

Related: How to Refinance Federal Student Loans

Also, student loan refinancing won’t cause you to totally miss out on all forgiveness opportunities. Many federal agencies and state and local entities offer loan repayment assistance programs that will contribute tens of thousands of dollars towards paying off your student loan balance in exchange for a full or part-time multi-year service obligation — more on that below.

Although PSLF and IDR Plan Forgiveness are not available to many dentists, there are other opportunities to have your dental student loans forgiven. Many of these programs require you to agree to a multi-year service commitment to provide dental health services to traditionally underserved populations. Plus, these programs can be used to repay federal and private loans.

Here are a few of the most popular programs.

• National Health Service Corps Loan Repayment Program promises up to $50 thousand in loan repayment assistance for dentists and other medical professionals who work three years full-time at a Health Professional Shortage Area — i.e., an area lacking primary care, dental care, or mental health providers. Check the eligibility requirements for the NHSC Program.

• National Institutes of Health LRPs pays off up to $35 thousand each year for dentists and other health care professionals who sign a multi-year contract to work in a biomedical or biobehavioral research career path — e.g., pediatric, AIDS, or infertility research. Check the eligibility requirements for the NIH LRPs.

• Indian Health Service Loan Repayment Program awards up to $40 thousand in repayment assistance in exchange for a two-year commitment to dentists who commit to two years of service in a health facility serving American Indian and Alaska Native communities. Check the eligibility requirements for the IHS LRP.

• The VA Education Debt Reduction Program pays up to $20 thousand per year of educational loan repayments for a five-year maximum award amount of $100 thousand. Dentists and other healthcare providers who are willing to work in challenging, direct-service roles at VA hospitals are eligible for this program. Read more about VA student loan forgiveness.

• Military LRPs offer doctors several thousand dollars yearly in student loan repayment, depending on the branch. For example, the Navy Health Professions Loan Repayment Program provides $40 thousand per year for up to two years (for a total of $80,000) in exchange for a two-year, active-duty commitment. Read more about military student loan forgiveness or speak with a recruiter at the branch of service you’re interested in.

Related: Medical Student Loan Forgiveness

Each state has Dental Education Loan Repayment Programs specifically designed to help dentists and hygienists repay dental school loans. These SLRPs can be used to repay both federal and private student loan debt.

For example, the Ohio Dentist Loan Repayment Program offers loan repayment for dentists who agree to practice dentistry in an underserved area and treat Medicaid patients and others who can’t afford to pay for up to four years. During the initial two-year commitment, the program gives participants $25 thousand to pay towards their student loans. If the contract is renewed, the contribution increases to $35 thousand in years three and four.

Similarly, California’s Health Professions Education Loan Repayment Program awards up to $20 thousand to repay dental school debt in exchange for two years of full-time service in a medically underserved area or at an HPSA.

You can find a comprehensive list of SLRPs on the American Dental Education Association website, adea.org.

You’re not screwed if you owe hundreds of thousands in dental student loans. But you are in a situation that forces you to be honest about your financial goals and take stock of the options available to get rid of your loans.

If your student debt to income ratio is 1:1 to 1:1.25, you have a good shot of repaying your loans. Refinancing with a private lender for a lower interest rate may be the right move.

But the closer the ratio gets to 1:1.5, the more sense it makes to put your federal student loans into an income-driven repayment plan and find ways to lower your adjusted gross income so that you can get a lower monthly bill.

Private student loans don’t offer those same repayment options. If you’re struggling to pay those back, consider refinancing for a lower rate and longer repayment term. And if that’s not an option, consider negotiating a student loan settlement or proving undue hardship in bankruptcy. Both possibilities may temporarily wreck your credit score, but they can help dig you out of the hole you’ve found yourself in.

Many student loan forgiveness programs can help you reduce your dental school loans. The right one for you depends on what you want for your career or where you want to live. Some programs will require you to work in an HPSA area, serve in the military, or work for a certain type of employer.

Let’s talk if you want to discuss the forgiveness and repayment options available to you.

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