Student Loan Debt: Who's To Blame?
I’ve said it before and I’ll say it again publicly: it is at best irresponsible and at worst criminal that schools allow residents to get into as much debt as they do without some form of structured business program as part of the curriculum. After all, the majority of ortho programs are either part of, or near some sort of university business school. To allow someone to – easily- get $500,000 in student loans without helping them understand basic business principles and entrepreneurship is, IMHO, reprehensible.
Nonetheless, in an age when most residents are graduating with significant loans, there’s an ironic twist. In order to pay back loans, many have to go to work for large DSOs, which are buying up many of the private practices, in essence making it more difficult for these very same residents to be the owners of an orthodontic practice at some point. Their loan payments keep most from being able to afford going into private practice and experience the lean years associated with starting a practice. While many are dead set against all DSO’s, without them, there would be no possible way for many young orthodontists to pay back their loans.
Of course, there are many new orthodontists out there who have gone onto income based repayment plans which allow lower monthly payments. However, the payments will go up when their income rises, and these loans will have HUGE balloon payments at the end (with massive tax ramifications) when the loan is eventually forgiven. That’s an altogether different discussion for another post.
I laughed out loud when I saw a recent article in a newspaper where a teacher was bemoaning her $37,000 student loans and talking about how she will never get out of debt. I have friends paying upwards of $75,000/year on their loans, so I guess it’s all relative, right?
So, what’s the answer? I think it begins with prospective orthodontic residents being fully informed and counseled extensively on what they’re about to do in terms of the impact on their financial future. Not some 10 minute conversation, but real discussions with orthodontists who volunteer their time to give an honest report of what loans mean to them. I remember reading a message thread on the Student Doctor Network before applying to residency and it said something like: “Orthodontic degree doesn’t equal lottery ticket.” Well said.
I also wish that the schools would take a more serious approach to helping orthodontic residents get a better understanding of the rigors and principles of running a business. Courses in marketing, financials, HR management and the law are as important as understanding anchorage management and ANB.
Is this a pipe dream? I don’t know. What I do know is that with a lot of outside pressure on orthodontists and their practices, and the rising costs of tuition, unless something is done, this model is unsustainable. And many orthodontists are barely hanging on financially…in a GOOD economy. What’s going to happen when this cycle of economic growth comes to an end?
What’s the answer? Just allow increased costs for education and simply deal with it? Will the day come where we routinely see ortho graduates with 7 figure student debt? Will the government change the rules related to student loan deductions and repayment?
I don’t have the answer, but what I hope is that student debt doesn’t get so high that it starts driving treatment plans and poison the well of proper patient treatment.
Wishing you all the best!!!
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GLENN KRIEGER IS AN ORTHODONTIST WITH 20 YEARS OF RESTORATIVE AND COSMETIC DENTISTRY EXPERIENCE BEFORE HE RETURNED TO ORTHODONTIC RESIDENCY. DR. KRIEGER LEARNED ABOUT THE IMPORTANCE OF WELL-DESIGNED PRACTICE POLICIES AND SYSTEMS DURING A YEAR AT THE SCHUSTER CENTER FOR PROFESSIONAL DEVELOPMENT IN SCOTTSDALE ARIZONA, AND AN UNDERSTANDING OF GENERAL ACCOUNTING PRACTICES AND INDUSTRIAL PSYCHOLOGY AT THE UNIVERSITY OF WASHINGTON GRADUATE BUSINESS SCHOOL’S “DENTIST AS CEO” PROGRAM. HE IS THE HOST OF “THE ORTHOPRENEURS PODCAST”, MANAGES THE ORTHOPRENEURS FACEBOOK GROUP AND RUNS THE ANNUAL ORTHOPRENEURS SUMMIT.