National Dental Student Lobby Day: my first national meeting and what I would consider the beginning of my involvement with ASDA. Attending what is considered the most influential annual meeting that ASDA holds every year was an honor, and I’m glad to be able to attend again this year. This is an event where over 400 students from schools nationwide come together to lobby about important issues in organized dentistry as a unified voice, seeing that changes occurring in the profession are brought about by the ones who know it best: dentists and dental students.

As the newly appointed vice president of Colorado ASDA and first legislative liaison, it is my responsibility to relay information and updates about any current issues in dentistry. This entails being up-to-date on current legislation that could pass, or has passed, in either the House of Representatives or the Senate. Although these are my duties as the first legislative liaison, it is in everyone’s interest to remain engaged during the legislative process involving these issues because decisions made in the coming years will affect all of us within the profession. While I’m not expecting everyone who reads this to try and set up meetings with legislators (frankly I’m happy you’re still reading), I would like people to be informed with what is going on in the world of organized dentistry, and what issues we are lobbying for in DC this Tuesday. Mid-level providers, access to care, licensure, and student debt are a few considerable issues that are of concern. Student debt and access to care specifically are the two that ASDA has decided to focus on at National Lobby Day this year. Two bills aimed at helping lower student debt are H.R. 649 (Student Loan Refinancing Act) and H.R. 4223 (Post Grad Act). The Student Loan Refinancing Act would allow graduates to refinance their student loans if a lower interest rate becomes available down the road. The Post Grad Act would make it much easier to get subsidized student loans while in school, meaning that students would not accrue interest while in school as well as for six months post-graduation. If both of these bills were to pass, students would have the potential to save tens of thousands of dollars! The third bill that will be lobbied for on Tuesday is H.R. 539 (Action for Dental Health Act of 2015) and addresses the access to care issue. The Action for Dental Health Act of 2015 would allow programs such as Mission of Mercy (MOM) and Give Kids a Smile to apply for readily available funds (around $15 million) that the CDC has set aside for public health projects. This bill is an amendment to the Public Health Service Act due to its current exclusion criteria regarding what sort of organizations can apply for these funds.

Albeit somewhat brief, this is what is going on in the world of organized dentistry at the current time! It would not surprise me if most of this information is foreign to you, but I hope that this new knowledge you now possess will motivate you to stay informed on the current issues in our profession.

One sunny spring evening, I had the pleasure of attending a Colorado New Dentist Committee study club meeting focused on ‘success as a New Dentist in the first 5 years.’ We had the honor of listening to guest speaker Mark Bonnett of North Star Resource Group give a lecture on what it takes to start a practice or be a successful associate employee. What I found most interesting (due to its relevance to me as a current dental student) was his later focus on loan repayment, and managing finances once the big paychecks first start coming in.

As soon-to-be dentists, the idea of ‘what the heck am I going to do after graduation?’ is a thought that weighs heavily on our minds. Sure, some of us will head to residencies (aka school forever), but for the rest of us, finding jobs right out of the gate is imperative as our student loans suddenly turn from Monopoly money into the real deal. After listening to Mark speak, one theme of his lecture became very clear: cash is king!

Since the day I signed my life away to the federal lenders, I had one thing in mind… “I’m going to pay these suckers off as quickly as possible.” What I came to realize in the first 5 five minutes of Mark’s lecture, is that this might not be the best thing to do. There are several alternatives all focusing around the idea that while we’ve amassed a large sum of debt, we should take our time in paying it off. Say you did choose to pay off your loans quickly by applying entire paychecks at a time to them. … What if you have an emergency? Or lose your job? Sure, you’ve got no debt… , but you’ve also got no money. The following are some suggestions for different ways to maximize your cash and minimize your loan payments:

Income Based Loan Repayment/Pay As You Earn Repayment

This is essentially setting your payments to correspond with your income:

Earn a lot --> pay a lot

Unemployed --> pay little (or even nothing.)

These programs are designed to base payments on income and family size, and payments are the same no matter how much you owe. Essentially, these programs are great for the dentist not making a lot of money because you’ll have more cash flow, rather than applying entire paychecks to student debts. A drawback of these programs is that while you’re not paying too much income into loans, you’re still collecting interest on every dollar that remains. That being said, if after 20 or 25 years (depending on the program) you haven’t paid off your loans, they are forgiven and your debts are eliminated!   Too good to be true? Probably. The catch is that the amount forgiven is taxable, meaning that if $50,000 of your debt is erased, you will be expected to pay taxes on that in a lump sum amount. Should this be the route you choose to pay back your loans, make sure you’re saving setting some of your cash aside to pay this.

Public Service Loan Forgiveness

These programs are tied to income-based repayment programs but follow a different set of rules. In order to qualify you must work full-time for 120 months in a non for profit capacity- potentially in a setting that doesn’t pay well. Some residency programs can even count toward your time commitment, as long as they’re not-for-profit university or hospital programs. Basically most 501(c)3 (not for profit), state, federal (yes military counts) or academic opportunities could count. A benefit of the public service IBR is that the amount of debt forgiven is not taxed!

Consolidation

By consolidating your loans, you extend your payback window to 30 years, lowering your monthly payments. Consolidation also allows you to blend your interest rates, should you have some higher and some lower. A benefit of loan consolidation is that by lowering your monthly payments, you’ll have more cash flow. A couple drawback are that, once again, you’ll be collecting interest on those loans over the 30 years to it takes to pay them back.   Also you could potentially be increasing your interest rate when the low rates are combined with higher rates for the weighted average. Keep in mind you can always pay the loans off early. Even if the loan repayment period is 30 years, there is nothing stopping you paying off the debt in 10 years or even sooner, once you get on your feet and have more stable cash flow.

(Some popular loan consolidation companies include SoFi and CommonBond, check these out if you're interested!)

After reviewing some of these loan repayment options, I hope you realize that there is no right or wrong way of paying back your loans. Every individual’s situation situation is different, and the pros and cons of each option should be reviewed before choosing which is right for you. The idea of lengthening your payment window stems from the idea that cash is king, meaning that having money set aside opens many doors for different options. When banks are deciding whether or not to loan you money for a house or a practice, they look deeply into your Debt : Income Ratio (This is the amount of monthly payments you are committed to make like credit cards, car payments, mortgages, etc., verses the amount of income you make on a monthly basis). By keeping your minimum payment lower, you have more flexibility to take on debts like a home or a practice.  With this in mind, taking the time to pay back your loans while stashing away some funds will help you immensely when you’re trying to make a large purchase or investment.

After wrapping up discussion of loan repayment options and the idea of holding on to some of your debt in order to save money, Mark closed the lecture by answering a couple of FAQ’s questions proposed by the audience.

Q: Which loans should I pay off first?

A: Not considering consolidation? Put your money where the interest rates are higher, and pay those off first.

Is it smart to make large purchases even though I have a mountain of loans?

A: Historically speaking, it is not necessarily a bad time to be in debt. What does this mean? Interest rates are relatively low and will only go up from here. If you’re going to make a large purchase, such as a new car, it is smarter to finance it now that interest rates are low, rather than waiting until you have less debt and biting the bullet on higher interest rates.

Which comes first, the practice or the house?

A: It depends on how much debt you have, and what your debt:income ratio is. Banks are used to seeing dentists graduate with a massive accumulation of debt, take out a loan for a practice, then become successful and be able to pay the loans back. Purchasing a practice is more about the cash flow of the practice than your personal debt load. Banks look at Practice Loans differently than home loans because the practice produces income to pay the debt. Homes are just an expense, and thus the banks look at these types of loans only by looking at the strength of the borrower. If you have a bunch of practice debt, a mountain of Student Loan debt and minimal income because you started your practice in the last year or so, it will be more difficult to purchase a home.

More Information:

For more information on student loans and repayment options, check out the following resources:

http://studentloanhelp.org

https://studentaid.ed.gov/sa/

https://www.alltuition.com

If you've still got some questions, or would like to talk to Mark Bonnett himself, feel free to email him at Mark.Bonnett@northstarfinancial.com

This past October, I attended the ASDA National Leadership Conference.  Having recently been elected the ASDA Alternate Delegate for my class, I was sincerely excited and curious about this conference.  I knew I would be surrounded by others who shared my same enthusiasm about ASDA and my commitment to enhancing our dental school experience and future profession. Given my legal background, I am particularly interested in ASDA’s and the ADA’s role in legislative and legal issues regarding dental school education and the dental profession.  While I thought I had a good grasp of the issues regarding the profession, at the conference, I learned so much more about the various nuances within the law that affect dentists. I was thoroughly impressed by the commitment of ASDA and ADA to advocate on our behalf. For this blog post, I wanted to highlight three areas regarding the law and dentistry that were large topics of discussion at the conference.

1)  Pending U.S. Supreme Court Case about Dental Boards and Anti-Trust

Recently, the United States heard oral arguments for North Carolina Board of Dental Examiners v. Federal Trade Commission.  This case hinges upon whether the NC Board of Dental Examiners has the authority to send warning letters to non-dentists who offer dental services, such as teeth whitening.  For this case, the FTC is concerned that the Board is engaging in antitrust behavior.  The pivotal issue in this case is whether the Board of Dental Examiners is considered “private", as anti-trust laws only apply to private entities. While the NC Board of Dental Examiners is considered a public entity, the FTC argues that it is comprised of dentists who primarily make their living as private dentists, and thus, they are also affected by the market that they are attempting to regulate. The ADA submitted an Amicus Curiae brief to the Supreme Court for this case.  An Amicus Curiae brief is essentially an opinion of a third party that is not directly involved in the case but has a substantial interest in the outcome.  The final decision should be issued sometime in 2015. You can view the ADA’s brief here.

2)  Student Loans

The accumulation of significant student loans is a large source of stress for dental students.  While the rising costs of tuition are often unavoidable, ASDA and the ADA are advocating for students and recent graduates from a tax standpoint.  Currently, most dentists’ incomes are too high to have a student loan interest deduction on their taxes.  The ADA is actively lobbying the federal legislature to completely eliminate this income cap.  This way, interest on federal student loans can be considered a tax deduction, which can potentially save dentists up to thousands of dollars each year. To take action on Student Loans through ASDA's Action Site, Engage, CLICK HERE.

3)  Dental Mid-Level Providers

Unlike Colorado, other states in the country are allowing “mid-level” providers to provide some basic, yet irreversible dental procedures in order to increase access to dental care.  ASDA and the ADA are very concerned about this, as it allows individuals with less than four years of dental training to perform procedures that can permanently affect a patient’s tooth.  Additionally, the addition of mid-level providers dilutes the dental profession in these states, which can have a substantial impact on the quality of dental services and the salaries for dentists. ASDA seeks to ensure that only dentists provide irreversible dental procedures to patients.

These three issues are just some highlights of the myriad of issues and work that ASDA and the ADA do on our behalf.  In addition to attending the legislative sessions, I attended marketing, financial, and other sessions which my colleagues have already highlighted. This conference confirmed to me that ASDA is really looking out for us. I certainly caught the “ASDA fever”!