Student Loans: Explore options and plan for long-term success | ADA Member Advantage

Student Loans: Explore options and plan for long-term success

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Dentists graduating from dental school in 2023 owed an average of $286,000 in student loans, with 65% of dentists taking out loans to pay for dental school.1

According to a 2021 poll by the National Association of Realtors®,2 student loan debt is having a negative impact on borrowers especially among Gen Z and Millennials who were likely to report that their student loan debt had impacted major life decisions.

  • Over one quarter of student loan debt holders said their debt has impacted their decision or their ability to purchase a home (29%), take a vacation (35%), or purchase a car (31%).
  • 60% of non-homeowning Millennials said student loan debt is delaying their ability to buy a home.

While these statistics are alarming and are part of a national trend related to financing education, they underscore the importance of proactively managing student loans to build a positive credit history, raising your overall credit score and evaluating available options to help ease the financial stress often associated with indebtedness.

Eight tactics to help you manage your student loans
  1. Be strategic about your payments. Pay off your loans with the highest interest rates first to reduce interest accrual.
  2. Make payments affordable. Contact your lender if you can’t make a payment. There might be a repayment plan that works for you.
  3. Make on-time payments. If you make a late payment, it may result in late fees and/or negatively impact your credit score.
  4. Pay interest while in school. Some loans accrue interest while you’re still in school. Make interest-only payments to prevent the balance from ballooning before graduation.
  5. Enroll in automatic payments. This helps ensure your payments are punctual and some lenders offer rate reductions for customers who enroll.
  6. Understand interest. Use this formula to calculate your daily interest: Annual Interest Rate × Current Principal ÷ Days in the Year = Daily Interest.
  7. Look into tax deductions and credits. Eligible student loan borrowers filing individually can deduct up to $2,500 on their federal taxes every year, depending on their income.*
  8. Understand where payments go. Your loan servicer can tell you if payments are distributed evenly among loans and how much of the payment is applied to interest vs. the principal balance.

*Consult a tax advisor regarding student loans and your taxes.

Federal income-driven repayment (IDR) plans

The Income-Driven Repayment (IDR) program provides federal borrowers with options other than forbearance when they have trouble making monthly payments. There are several IDR options, all of which adjust borrowers’ payments based on their adjusted gross income and family size—not how much they owe. Learn more about different IDR plans in the chart below:

Income-Based Repayment (IBR)

Monthly Payments

  • 10-15% of your discretionary income (and your spouse's if filing jointly)
  • Never more than federal 10-year Standard Payment Plan amount

Repayment Period

  • 20-25 years, depending on when you become a new borrower


  • Remains available but borrowers cannot select plan after 60 payments on REPAYE that occur on/after July 1, 2024

Pay as You Earn (PAYE)

Monthly Payments

  • 10% of your discretionary income (and your spouse's if filing jointly)
  • Never more than federal 10-year Standard Payment Plan amount

Repayment Period

  • 20 years


  • Not accepting new enrollments as of July 2023

SAVE (formerly REPAYE)

Monthly Payments

  • 5% of your discretionary income for Undergraduate Loans
  • 10% of discretionary income for Graduate Loans
  • Weighted average for borrowers who have both

Repayment Period

  • 10 years for low-balance borrowers (less than $12,000)
  • 20 years for only Undergraduate Loans
  • 25 years for any Graduate Loans


  • This plan replaces REPAYE

Income-Contingent Repayment (ICR)

Monthly Payments

The lesser of the following

  • 20% of your discretionary income or
  • What you would pay on a repayment plan with a fixed payment over the course of 12 years, adjusted according to your income

Repayment Period

  • 25 years


  • Not accepting enrollments for current students; only available to future borrowers with consolidated Parent Plus loans

For more information, go to the Federal Student Aid website at

Public service loan forgiveness (PSLF)

Federal borrowers working in public or nonprofit sector jobs could be eligible to have their student loans forgiven after 10 years or 120 qualifying payments through the Public Service Loan Forgiveness (PSLF) program3 If you are employed in certain public service jobs, such as at a not-for-profit hospital, and have made at least 120 qualifying payments on a Direct Loan, the remaining balance could be forgiven.

Typically, borrowers pursuing forgiveness through the PSLF program are also enrolled in an Income-Driven Repayment plan – such as the Saving on a Valuable Education (SAVE) plan. For those who qualify, the PSLF Program can be invaluable in relieving a good portion of your debt. For more information, go to the Federal Student Aid website at

Consolidation and refinancing

In addition to federal repayment and forgiveness programs like IDR and PSLF, student loan borrowers might consider consolidation or refinancing as part of their student loan management strategy, depending on their financial goals and what types of loans they have:

Direct consolidation - Creating a super loan by consolidating federal loans into one could be a viable option for some borrowers. Typically, the new loan has a fixed interest rate based on the weighted average of the interest rates of the consolidated loans. Repayment terms vary from 10 to 30 years. Note that you may need to consolidate certain federal loans into a Direct Loan in order to enroll in some of the federal IDR plans. Keep in mind that the loan term you consolidate to can have an impact on your monthly payment. If you are sure that you will not pursue Public Service Loan Forgiveness, then the consolidation question comes down to interest rate and terms.

Refinancing – Refinancing involves having a private lender pay off your existing loan(s) and issuing you a new loan at a potentially lower interest rate. If approved, you be able select your desired repayment term from available options. If you're able to lock in a lower interest rate, this could save you money over the life of the loan. As a borrower, you want to balance lower rates with terms and payments that are the best fit with your budget and income. Note: You will lose certain benefits associated with federal loans if you refinance, such as access to income-driven repayment plans or loan forgiveness. For more information, go to the Federal Student Aid website at

While each lender has its own specific qualification criteria, the key factors in determining eligibility and rates typically include your credit profile, total monthly debt payments and income. Those who are in good financial standing, demonstrate a strong career trajectory, have good credit scores, and have shown they are responsible with other debt and monthly budgeting are more likely to be approved.

Note: Refinancing is not federal consolidation. Consolidation simply combines two or more loans into one loan with one interest rate. When federal student loans are consolidated into a Direct Consolidation Loan, the new interest rate is based on the weighted average of the original loans’ rates. Consolidation does not likely offer any interest savings, and private student loans cannot be consolidated with federal student loans. The key benefit of refinancing is the potential to save thousands of dollars in interest over the life of the loan.4

Student loan refinancing may allow individuals to take advantage of low interest rates and potentially reduce the total amount owed over the life of loans. In addition, refinancing allows borrowers to change the terms of their loans, creating a plan that fits their circumstances.

Laurel Road is endorsed by ADA Member Advantage to provide student loan refinancing services to ADA Members. Qualifying ADA Members receive a 0.30% rate reduction5 to Laurel Road’s already low rates for the life of the loan, plus an additional 0.25% rate discount when monthly payments are made automatically from a bank account. Additionally, ADA Members receive a free 30-minute student loan consultation from the Laurel Road experts at GradFin and a 20% discount on annual GradFin membership6.