The Big Picture When Considering Dental School Debt

In Business by Dental Entrepreneur

The key to maximizing your investment in your dental education can best be achieved as a practice owner. And while this is often what dental students start out having as their ultimate goal, the amount of dental school debt they are carrying when they graduate often leaves them with the impression that they cannot become practice owners or get financing to start or buy a practice. But this is not true.

The Myths

Dental school debt makes it impossible:

To become a practice owner;
To obtain the financing required to become an owner;
To learn the skills required to own, operate and manage a dental practice; and
To succeed as an entrepreneur in dentistry.

The Facts

The cost of dental education is high.
Many graduating dentists have school debt in excess of $300,000 (or even $500,000).
Dental school debt is manageable.
Practice owners, over the course of their career, earn two to three times as much as associates.
Even with large amounts of student debt, young dentists can qualify for financing to buy or start-up a practice, if they manage their other debt properly.
The real problem comes if they try to support a lifestyle that exceeds their income.
Money is available to finance practice ownership.

The Big Picture and Dental School Debt

Looking only at the large amount of school debt incurred, you miss the big picture. College and dental school debt, when compared to the value of what will be obtained in return, is relatively small.

Consider the “Big Picture” of a dental career:

  1. Depending on how well you manage the benefits of that dental education and maximize its economic benefits, the school debt allows you to earn 3 to 10+ times more income over your lifetime than the average high school graduate.
  2. Your education puts you in a unique position of either becoming your own small business owner/entrepreneur (whose health care product will always be needed, regardless of the economy) or having an employment opportunity with significant income potential.
  3. As a practice owner you will earn, including your practice equity, two to three times as much usable income as you can as an associate working for another practice owner.
  4. The “Big Picture” is the income that a dental school education provides, whether as a dental associate or a practice owner. The imperfection is the debt associated with getting there. That is not to say that the debt levels are insignificant, but when viewed in light of the “Big Picture,” which is a dentist’s income over their career, they are relatively small.

After high school, many people go on to higher levels of education to increase their earning potential. According to the Social Security Administration’s Office of Retirement Policy, the current average high school graduate earns $1.54M over their working years, and the average college graduate earns $2.43M. Compare this to the average general dentist associate who earns $4.5M ($150,000/year), and the average practice owner who earn $8.4M ($280,000/year) plus equity. I recently completed a practice valuation for an endodontist with a taxable income of $800,000+, and among the specialties, this is not unusual.

As the calculations illustrate, based on today’s average general dentist owner taxable income, the net benefit of the dental education, after deducting the cost of that education and the lost income while obtaining your DDS/DMD, is still 2.2 to 4.7 times that of a high school graduate. This 2.2 to 4.7 multiple is despite the higher than ever dental school related debt levels. The Big Picture: the net cost of your dental education, when compared to the overall income potential, is still actually relatively small and is a more than a worthwhile investment.


If a dental school student or young dentist wants to maximize their educational investment, practice ownership is still the better choice. Granted, ownership is more work than just punching the clock as an associate, but the rewards are significantly higher. And having student loans, even large amounts of student loans in and of themselves, will not prevent a dentist from obtaining the financing they need to become a practice owner.

Associateships are a great place to start a dental career. They provide an opportunity for a young dentist to hone their clinical skills, and if working in a private practice for a willing dentist, to learn the business of dentistry from the owner.

But unless the owner also offers future ownership or a partnership, the “associate” practice should be just that, a first step toward eventual practice ownership. Dental practice ownership has a track record of being the safest business to invest in today and for the foreseeable future. Lenders recognize this minimal risk, which is why new dentists, seeking to start practices or acquire an existing practice, were the only businesses banks were lending to during the last recession.

Practice ownership will still give you the best and greatest rate of return on your dental school educational investment and also help pay off educational debt quickly. The amount of educational debt will typically not prevent a dentist from becoming a practice owner; only a poor credit history and credit score will do that. Until you are a practice owner, control your spending, pay your bills on time and protect your credit score. While the large amount of educational debt is acceptable, taking on other discretionary debt (e.g., credit card debt, large auto loans or leases) are not.

Most new graduates will not give a second thought to taking out an additional loan of $300,000-$500,000 to buy a home after graduation. This 20-30 year investment is a good investment but, aside from appreciation, provides no income. Today’s practice owners average $280,000 in taxable income plus their equity build-up. It is estimated that 50% of graduate practice owners with 10 years of experience are seeing taxable income in the $300,000-$700,000 range. Now that’s the “Big Picture.”

For more information on securing practice ownership, visit:

For more information or assistance in securing a general dental associate position, visit: Cost of Dental Education

Dr. Eugene Heller has led Henry Schein Professional Practice Transitions since its inception. A graduate of Marquette University’s School of Dentistry, his prior academic background included accounting and tax consulting for small businesses. Prior to joining Henry Schein, Dr. Heller owned and ran his own practice, where he developed an extensive background in practice management. He has consulted on hundreds of practice transitions involving the sale of practices and the formation of partnerships, group practices and office sharing arrangements, in addition to conducting appraisals for many of these transitions.