Dental Student Couple loan payback strategy

[mlopez02]

Hey everyone. I frequent this forum often and figured it was time to make a thread of mine own seeking some advice. I know this is a forum generally geared toward physicians but figured I could gain some solid advice as well. My girlfriend and I are currently 4th year dental students graduating in roughly 8 months. At that time we will both start looking for jobs as general dentists as neither of us currently plan on entering any residency programs.

We will be both be 25yo at time of graduation. I estimate our starting salaries to range anywhere from 120-150 first year (FL). Below are our loan estimates when finished.

Him: ~48k @ 5.3%

Her: ~15k @ 5.0%

~200k @5.3-6.2%

~75k @ 6.3-7.2%

All of these loan estimates include accrued interest and all are solely from dental school. We did not have any undergrad loans. We have attempted to live as frugally as possible however these days med/dental school costs are quite high. I have the benefit of having significant parental contribution hence my lower loan amounts.

We plan on living with our parents for a little after school to minimize expenses and plan to get married about 1-1.5 yr out. I am fairly confident I will be able to pay off my loans in a year but was hoping to come up with the best payback plan to tackle her loans. Obviously I will be contributing to paying back her loans as well.

Should we both be looking at refinancing these loans as soon as possible? I was also hoping to at least contribute 5.5k annually to backdoor Roth...good idea?

Any advice regarding payback/savings/retirement/etc would be greatly appreciated. Thanks!

[Hatton]

OK  I have a couple questions.  Since I have no idea about starting dental salaries is the 120-150 your projected combined salary or per dentist? How sure are you about getting married? I would not pay off her loans until you actually get married. Are you planning to live separately with each set of parents or together with one set?  If you are both comfortable with this and your parents are also then yes save the money.  I would certainly try to combine and refinance all the loans and then when you have the new rate aggressively pay them off. If you have any income now you can directly contribute to a roth ira.  You really need to get the jobs and see what type of retirement plan is offered to plan retirement savings and loan payoffs.  You are really smart to be planning this now instead of a huge wedding.

[MrsIMDoc]

I am a physician married to a dentist and he contributed/helped write this post.

Most dental positions will not be eligible for public service loan forgiveness, so I think consolidating and refinancing as soon as possible makes sense. However if you think you may at all do a public health job then you may want to wait to consolidate until you know for sure.

You should start looking for jobs now and it is smart to not do a residency for dentistry, that delays your earnings by a year.  One of the hardest things is finding a dental job in the same city for two dentists. The dental market is tough if you do not know that already.  In large towns that are desirable they are able to offer lower compensation then smaller towns.  In smaller towns it is hard for two dentists to get jobs together.  There are plenty of jobs for new grads that do not pay well or put you in difficult contractual obligations as an associate.  For example many have ridiculous non-competes or do not provide health insurance or other benefits despite only paying you $100,000.   Some expect you to purchase over 7-10 years, and you are therefore an associate for a long time under these less than ideal conditions.  I am sure you know about DentalTown, if not I would start checking out that site in addition to WCI to see what others have to say.

Regarding the marriage, it sounds great that you are planning to live frugally with your parents prior.   We would recommend not paying back each others loans until you are married.  Best of luck!

[mlopez02]

hatton1 wrote:

OK  I have a couple questions.  Since I have no idea about starting dental salaries is the 120-150 your projected combined salary or per dentist? How sure are you about getting married? I would not pay off her loans until you actually get married. Are you planning to live separately with each set of parents or together with one set?  If you are both comfortable with this and your parents are also then yes save the money.  I would certainly try to combine and refinance all the loans and then when you have the new rate aggressively pay them off. If you have any income now you can directly contribute to a roth ira.  You really need to get the jobs and see what type of retirement plan is offered to plan retirement savings and loan payoffs.  You are really smart to be planning this now instead of a huge wedding.

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The 120-150 is projected per dentist. I'm pretty certain about getting married, we have been together for 9 years now....just wanted to complete our education first. We are going to try living separately with each set of parents, both of our houses are within 5 minutes anyway.

Thank you for the reply I appreciate it.

[mlopez02]

MrsIMDoc wrote:

I am a physician married to a dentist and he contributed/helped write this post.

Most dental positions will not be eligible for public service loan forgiveness, so I think consolidating and refinancing as soon as possible makes sense. However if you think you may at all do a public health job then you may want to wait to consolidate until you know for sure.

You should start looking for jobs now and it is smart to not do a residency for dentistry, that delays your earnings by a year.  One of the hardest things is finding a dental job in the same city for two dentists. The dental market is tough if you do not know that already.  In large towns that are desirable they are able to offer lower compensation then smaller towns.  In smaller towns it is hard for two dentists to get jobs together.  There are plenty of jobs for new grads that do not pay well or put you in difficult contractual obligations as an associate.  For example many have ridiculous non-competes or do not provide health insurance or other benefits despite only paying you $100,000.   Some expect you to purchase over 7-10 years, and you are therefore an associate for a long time under these less than ideal conditions.  I am sure you know about DentalTown, if not I would start checking out that site in addition to WCI to see what others have to say.

Regarding the marriage, it sounds great that you are planning to live frugally with your parents prior.   We would recommend not paying back each others loans until you are married.  Best of luck!

Click to expand...

Thank you both for responding. Good point regarding the public health position, I will keep that in mind. I agree the dental market is tough. I have been looking at various current job listings to get an idea of what to expect. I anticipate and am willing to commute daily for a higher salary. To clarify, I won't be paying back her loans until we are married. I intend on paying my balance within the first year and saving for a very small wedding.

Yes, I know about DentalTown and use it frequently. I will also get some input from them. Thanks again for the advice!

[Sergio Estavillo]

mlopez02 wrote:

Him: ~48k @ 5.3% Her: ~15k @ 5.0% ~200k @5.3-6.2% ~75k @ 6.3-7.2%

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If she has approximately $290k, I recommend she consolidate (www.studentloans.gov) immediately after graduation and select REPAYE.  If she has a 2016 AGI < $18K, her 1st year REPAYE payments = zero.  And, she's receive a REPAYE interest subsidy of approximately $9,500.  After the 1st REPAYE year, beginning about July 2018, you can re-certify with REPAYE or consider other options.

[mlopez02]

Sergio Estavillo wrote:

mlopez02 wrote:

Him: ~48k @ 5.3% Her: ~15k @ 5.0% ~200k @5.3-6.2% ~75k @ 6.3-7.2% 

Click to expand…

If she has approximately $290k, I recommend she consolidate (www.studentloans.gov) immediately after graduation and select REPAYE.  If she has a 2016 AGI < $18K, her 1st year REPAYE payments = zero.  And, she’s receive a REPAYE interest subsidy of approximately $9,500.  After the 1st REPAYE year, beginning about July 2018, you can re-certify with REPAYE or consider other options.

Click to expand...

Wow thanks Sergio! I pm'd you.