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Medical Forum / General / Dentistry / August 2005Best strategy for dealing with student debt
What are the best ways people have either heard of or actually used to deal with student debt in excess of $100,000. Asumming the student will be making at least $80,000 at graduation, what's the best way to deal with it? I'm just interested in any ideas, stories, opinions etc Is it best to pay it all off asap, or are there certain advantages (tax benifits) of having the debt (i know that sounds silly). Also, helpful would be any Canada-specific strategies and those for people who will have this kinda of debt and be starting up their own private business/clinic about 5 years after graduation. Thanks a lot...(and please reply to all groups) > What are the best ways people have either heard of or actually used to > deal with student debt in excess of $100,000. Make your payments faithfully until its paid off. > Asumming the student will be making at least $80,000 at graduation, > what's the best way to deal with it? I'm just interested in any ideas, > stories, opinions etc What are your options? What interest rate? How many years? > Is it best to pay it all off asap, or are there certain advantages (tax > benifits) of having the debt (i know that sounds silly). We have a few Kanadians in the group who may chime in here: > Also, helpful would be any Canada-specific strategies and those for > people who will have this kinda of debt and be starting up their own > private business/clinic about 5 years after graduation. > > Thanks a lot...(and please reply to all groups) Sorry, I don't do that. If you post to SMD you can damn well read your responses here. Vaughn > What are the best ways people have either heard of or actually used to > deal with student debt in excess of $100,000. [quoted text clipped - 11 lines] > > Thanks a lot...(and please reply to all groups) I consolidated about $105,000 after dental school, paid $700/mo for the last 5 1/2 years...and then paid it all off using the equity in my home just 1 month ago. It's just another payment. work hard, don't spend, pay back your loan. took me exactly two years to pay off my 165,000 student loan after graduation. > work hard, don't spend, pay back your loan. took me exactly two years > to pay off my 165,000 student loan after graduation. I let my home appreciation "pay off" my student loan. By doing that, I was able to buy the things I wanted when I wanted them. No belt tightening whatsoever. I was also able to contribute $20,000+ dollars in each of the last 6 years to my pension plan...rather than use that same money to retire long-term debt. I have zero personal debt except for my house now. And I have 25% equity in that. To each his own. > work hard, don't spend, pay back your loan. took me exactly two years > to pay off my 165,000 student loan after graduation. That sounds very very hard...165k in two years..how did you do it? As an associate there's no way I'll maken enough to pay off 100k in two years. Dang! I was wondering why WaWa has reported so darned much armed robber during the past two years ....... Joe -- Joel34 Avoid it in the first place. Be frugal and avoid things like a car and too much recreation. I earned my way through college (an ivy one too). There are excellent state schools much less $100K. I have graduated just over a year ago from a Canadian dental school. Student loan = $95,000 Student line of credit = $105,000 Here is how I am paying it off Practice = $320,000 Building (practice) mortgage = $150,000 Needless to say... you get into a lot more debt before you pay it off. I tried associating for about 6 months after school and it was awful. I cleared about 25% of what I do now as an owner. P.S. I didn't mention the personal mortgage or minivan (3rd kid on way). Debt is everywhere!!! I think I'll have EVERYTHING paid off in 5 years. > What are the best ways people have either heard of or actually used to > deal with student debt in excess of $100,000. [quoted text clipped - 11 lines] > > Thanks a lot...(and please reply to all groups) A banker friend of mine told my son, and his son as they are friends, that once they got into classes they would start getting all these credit card offers with 5 or 10 thousand dollar limits. He said they should max them out at the ATMs, pocket about 200 grand each and move to Mexico, enroll and go to school there and say to hell with American college, American credt cards and American life. Well, they didn't but they are both having second thoughts now. My friend retired and he and his wife now live in Mexico. -- J.C. > I have graduated just over a year ago from a Canadian dental school. > [quoted text clipped - 30 lines] > > > > Thanks a lot...(and please reply to all groups) Hi, I'm confused, the practice and building mortgage, are they additional debts or incomes from those two sources? I'm living as frugally as possible, my only debt is tuition and nothing more. It's kinda sad that once we graduate, we have practice debt, than house debt etc etc etc > I have graduated just over a year ago from a Canadian dental school. > [quoted text clipped - 30 lines] > > > > Thanks a lot...(and please reply to all groups) I was wondering the same thing .... that's not completely clear to m either. Joe -- Joel34 The practice and building mortgage were additional cost (debt) of me becoming an owner of a practice. My point was your school debt is only the start of the pain. You have basically 2 choices to deal with the debt (well 3 if you include bankruptcy). 1) Work as an associate and make minimal payments on your debt. 2) Go into more debt and buy a practice. Then aggressively repay your loans. I recommend the latter... if you EVER plan on owning. Take the plunge early. > Hi, I'm confused, the practice and building mortgage, are they > additional debts or incomes from those two sources? [quoted text clipped - 37 lines] >> > >> > Thanks a lot...(and please reply to all groups) The latter does sound like a good plan, but I think I'm going to have to associate b/f I even think about owning. Just out of curiosity, what's the average time people associate for (those who want to own their own practice eventually). > The practice and building mortgage were additional cost (debt) of me > becoming an owner of a practice. My point was your school debt is only the [quoted text clipped - 50 lines] > >> > > >> > Thanks a lot...(and please reply to all groups) About being "an associate" .......... there are all sorts of associateships depending on the needs and desires of the head honcho doc ....... it would be best to acquaint yourself with all facets of this going into it. Joe -- Joel34 In Canada most associates are "independent contractors". You will make a percentage of you billings. This does not include your patients that see the hygienist. You will only get hygiene revenue if you do the scaling and polish yourself. Some Head-Docs are cheap and won't even give you a percentage of the x-rays taken. I suggest avoiding those agreements or taking the bitewings to him for each of your patients and ask him to diagnose them... since he is getting the revenue. The average percentage was 35% but recently seems to have changed to 40%. Some experienced associates even make 45%. The problem I faced is that many offices think they need an associate when they don't. You will only get the leftover patients which may mean a lot of time reading magazines in the staff room. Let's say a dentist bills $80,000 a month. The associate might bill $25,000 a month in some slower practices. Take 40% of that, pay taxes, pay your student loan/line of credit, etc. It goes down quite fast. Give yourself a couple years though. I'd say, from what I've seen, people associate for 6 months to 3 years on average. Some never do. Some still are after 15+ years. > The latter does sound like a good plan, but I think I'm going to have > to associate b/f I even think about owning. [quoted text clipped - 63 lines] >> >> > >> >> > Thanks a lot...(and please reply to all groups) In the U.S. its pretty much the same except for the IRS. There are 20 factors evaluated (unequally) when evaluating whether or not someone is an Independent Contractor or Employee. It mainly has to do with control, of which the IC/employee has little. Good discussion, if anyone is interested! Joel jwn dds In Canada most associates are "independent contractors". Yo will make a percentage of you billings. This does not include your patients tha see the hygienist. You will only get hygiene revenue if you do the scalin and polish yourself. Some Head-Docs are cheap and won't even give you a percentage of the x-rays taken. I suggest avoiding those agreements or taking the bitewings to him for each of your patients and ask him to diagnose them... since he is getting the revenue. The average percentage was 35% but recently seems to have changed t 40%. Some experienced associates even make 45% -- Joel34 |
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