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