According to a study by the ASDA , 75% of Dental students graduate with more than $100,000 of debt, with the average dental student accumulating $241,097 of debt before walking across the stage. Since 2001, student debt has more than doubled across the country, placing an increasingly oppressive financial burden on any student wishing to pursue a career in the dental industry. With such a seismic shift in student debt accumulation over the past decade, it’s no surprise that the impact of such financial burdens are having an influential effect on career decisions after graduation.
There are 3 primary effects student debt has on a graduating dentist’s early career decisions, each with the potential to shape both the short and long term career trajectory of any dental student:
High Salary Expectations and Goals – Perhaps the most obvious effect of amassing a significant level of student debt is the pursuit of a position with a generous salary offering fresh out of dental school. Most early career dentists chase after positions that advertise high earnings in a short period of time rather than seeking to gain experience that could be more useful in the long run. This in turn leads to a lot of “job hopping” for new grads, as dentists flock from one practice to the next in pursuit of maximizing their earning potential. However, the salary structure for a dental associate isn’t always as simple as it may seem. A new grad needs to have a thorough understanding of the practice’s complete financial management in order to really understand the earning potential of an opportunity. For instance, if a dental practice offers a slightly higher percentage of production by jeopardizing its budget for updating old office equipment and marketing to get new patients, a dentist is likely to see lower production and significantly less take-home verses a practice with a lower percentage offering and higher overhead. Read our post on understanding the numbers when comparing multiple job offers for more information on dental salary and how many dentists leave money on the table in search of a higher percentage. This is certainly a trap many early career dentists can fall into, and understanding the numbers is critical when trying to pay off loans.
Delayed Plans to Buy or Transition into Partnership – With such a strong focus on salary, very few early career dentists these days are open to partnership or practice buyout opportunities within the first two to five years following graduation. New dentists often feel “stuck” in associate positions longer because they perceive they’re not financially able to buy into a practice. In many cases, new dentists cannot afford to build their own private practice like their forerunners, simply because they have too many existing bills to take on the additional financial challenge of starting a new practice. In some cases, however, newer dentists will defer partnership/ownership longer than is financially necessary. Associates often assume that they can’t take on an equity role until they pay down debts. In reality, cash flow is generally more important than debt load.
Expanded Job Search Criteria – While it may be hard to fathom, not all of the effects of student debt are necessarily negative. While the pressure of paying off a sizable loan is never desirable, the avid pursuit of a full time position after graduation can often result in dentists evaluating opportunities they wouldn’t have considered otherwise, leading to a greater variety of experiences and overall career satisfaction. For instance, most big cities are saturated with candidates seeking a position almost exclusively based on the location. Often a job seeker will compromise on earnings, work environment, or other secondary benefits just to relocate to the specific area of their choosing. When faced with the challenge of paying off student loans, grads are sometimes forced to evaluate opportunities outside of the city in less saturated markets to secure a steady income. Surprisingly, these opportunities sometimes warrant higher production, better benefits, and a far more positive work environment in comparison to inner city practices. Since candidates are harder to come by outside of the city, practices are more likely to be open to salary negotiations and offer competitive benefit packages in an effort to reel in the best associates for their practice.
The expansion of job search criteria can certainly have a negative effect on career choices as well. Most new grads focus exclusively on private practice or small group practice opportunities and look at openings in the corporate dentistry sector as simply being “back up” career options. When trying to find a position in a saturated market, however, many new grads who are in debt will end up taking the corporate position because it’s the safest route to securing a steady income. While these corporate practices can offer stable employment, training, a guaranteed minimum salary, and benefits, many early career dentists who stay in corporate dentistry for extended periods of time begin to treat that career path as a safety net, and miss out on the higher long-term earning potential they could have achieved by eventually transitioning to a private practice. For more advice on expanding your options and landing a job in a difficult or saturated job market, read through our blog post here.
While the issue of student debt is certainly a problem that can lead to negative career choices, new dental school grads can avoid many of the pitfalls of pursuing the wrong opportunities with a bit of planning and career coaching. By learning how to effectively compare different job offers and understand the numbers behind associate salaries, a new grad with student loans to pay off can efficiently manage their debt while getting on track for a satisfying and fulfilling career in dentistry.
ETS Dental is a Dental Recruiting firm specializing in finding and placing General Dentists, Dental Specialists, and Practice Leadership professionals throughout the United States. www.etsdental.com