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Like refinancing a mortgage or doing the “credit card shuffle” to move debt to lower interest rate accounts, dental school loan borrowers are considering the money-saving options for loan repayment and refinancing.

Repayment and loan forgiveness programs and resources are available to newly practicing dentists. The American Dental Association (ADA) has compiled a list of these resources nationwide and by state. With the student loan refinancing market booming, borrowers can also explore refinancing high-rate student debt.

According to the American Dental Education Association, graduates in 2016 left school with an average of $261,149 in debt. When refinancing, a vital step is to research carefully and perform a long-term and short-term analysis, including tax implications, in order to make the best choices.

Donovan & Limroth recommends that you:

• Review loan documents for interest rates, repayment terms, penalties, and other important information.
• Research repayment options, which can include standard, graduated, extended and income-based repayments.
• Calculate the advantages and disadvantages of loan consolidation.
• Be aware that public service loan forgiveness and special protections, such as forbearance and income based repayment plans, which apply to federal loans, disappear when you refinance.
• Consider a cosigner to help secure refinancing approval and lower your interest rate.

In an ADA interview with Baltimore dentist Dr. Edgar Radjabli about debt repayment strategies, Radjabli said he graduated having eight loans from six lenders. They totaled about $265,000. By consolidating, he now has one bill to pay and estimates that he will save almost $75,000 in interest over 15 years.

To calculate your potential savings through refinancing or consolidating high-rate loans, use a student loan refinance calculator. Companies such as LendEDU also provide online refinancing tools and a quick and easy way to compare rates, terms and qualification requirements for various lenders.

While in dental school, students are learning patient care, performing procedures and preparing for license exams — not focusing on finance planning and management. To assist students and newly practicing dentists, the American Dental Education Association (ADEA) offers a variety of educational debt management materials, including this video with additional student loan refinancing tips.

For more ADEA debt management materials, visit ADEA.org. And for questions about financial planning and student loan refinancing, contact Donovan & Limroth for assistance.

If you’re considering refinancing, learn the right questions to ask and options to consider.

The American Institute of CPAs (AICPA) conducted a survey in 2016 of those with student debt which revealed:

• 46% are working second jobs
• 37% are cutting living expenses by moving in with family members
• 40% are living with roommates
• 71% said they would reconsider their higher education decisions
• 36% said they wished they’d attended community college for their first two years
• 34% said they wished they’d chosen a public versus a private school

This paints a grim picture. Student loans are impacting lifestyles. A majority of adults with student loans report making personal and financial sacrifices in order to meet their loan payments.

To best help you, Donovan & Limroth takes the time to learn about you and your individual challenges. This is the best way to help you customize your financial and tax planning. And with higher education costs rising and student loans shaping people’s lives, these are crucial conversations.

If you are saving for future expenses, we can provide information and tools about paying for higher education. Your research should include federal loan programs and the pros and cons of federal versus private loans from commerical lenders.

If you currently have student loans and are thinking about refinancing, it’s important to look at the long-term financial impact of your refinance options. The size of student loan debt in the U.S. exceeds $1.3 trillion. Even more staggering is that this debt, according to the Federal Reserve, increases at about $2,700 per second.

Refinancing $75,000 of student debt down from 6.8 percent to 4.82 percent could save you around $8,900 over 10 years.

And refinancing $75,000 of student debt from 10 percent to 4.82 percent could save you around $24,266 over 10 years.

Know that refinancing is possible, and with the current boom in the student debt refinancing market, it can be a reality.

With more than 44 million people paying school loans, tools such as LendEDU have become popular. LendEDU allows you to compare student loan refinancing offers from companies, including SoFi, Citizens Bank, LendKey, CommonBond, Earnest and College Ave. You can compare rates, terms, and qualification requirements, and there are no fees to refinance student loans.

NerdWallet and Credible have teamed up to offer similar services. You can learn about their process and recommendations for the “11 Best Companies to Refinance Your Student Loans in 2017”. NerdWallet also provides an easy-to-use student loan refinance calculator, allowing you to calculate and compare your savings.

Donovan & Limroth encourages clients to research carefully and make informed decisions. The National CPA Financial Literacy Commission also advises you to:

• Read carefully any loan documents before signing them with respect to interest rates, repayment terms, penalties, and other important information.
• Know your various repayment options such as the standard repayment plan, graduated repayment plan, extended repayment plan, income-based repayment plan and loan consolidation.
• Be aware that student loans are hard to cancel, even in bankruptcy. Death and permanent total disability are two of the very few ways to get student loans discharged.

Before refinancing, also explore student loan forgiveness programs and qualifications. And if you have federal loans, you may be eligible to apply for Student Loan Income-Based Repayment (IBR), which is determined according to your ability to pay instead of how much you owe. For guidelines and an estimate, use an IBR calculator to help you decide if you should apply. For some, this could offer more savings than refinancing.

The goal is to be able to receive and enjoy the benefits of higher education and pursue your dreams. In a press release, Gregory Anton, CPA, chair of the AICPA’s National CPA Financial Literacy Commission said, “College is often viewed as a stepping stone to the American dream. However, the way education is funded could actually wind up delaying home ownership, getting married, and having children—hallmarks of that dream.”

If you have questions about financial planning and student loan refinancing, contact Donovan & Limroth for assistance.