North Texas Dentistry Volume 6 Issue 1 | Page 23

Is it possible that organized dentistry can play a role in this puzzle by reducing the interest rates charged by financial institutions? Let’s go math heavy and find out – The table below shows monthly payments for varying levels of debt, including the national average, at differing interest rates and length of repayment. Option 3 What happens if you refinance your private and federal student loans with an organized dentistry approved lender, such as SoFi or DRB, and lower your interest rate to 5.8%? You would save $122/month ($1,464 annually), saving over $14,640 over the life of the loan and allowing you to essentially join organized dentistry for the recurring annual savings. Student Debt Refinancing M O NT HLY PAY MENT AMOUNT 5%, 5 yrs 5%, 10 yrs Let’s focus a bit on the national average (highlighted). The Texas Dental Association Perks Program and the American Dental Association have separately negotiated refinance packages with financial institutions, SoFi 4 and DRB 5, respectively. Both the TDA and the ADA have negotiated rates with these financial institutions which are lower than those available to a non-member. Both organizations have done so with the goal of lessening the financial burden on our colleagues. With the goal of making membership feasible and desirable, can a debt-burdened new dentist save enough with a lower annual interest rate, resulting in savings that might pay for membership in the ADA/TDA/Component? SoFi was contacted and gave this “average” example: a single dentist with no dependents, $241,000 in student debt, and a 10-year term for repayment. For unsubsidized loans between 2006-2013, the federal government charged 6.8%. Option 1 Use the government’s Pay As You Earn (PAYE) repayment plan (allows for a slower repayment track). Assume an annual Adjusted Gross Income (AGI) of $150,000, which is the median dentist’s salary according to the Bureau of Labor Statistics, insert an annual 5% increase, and the dentist qualifies for graduated monthly payments as low as $1,104 – but can pay a whopp