I am obviously no accountant, but considering it takes usually 4 to 5 years for a dentist to buy his own practice, let's calculate:
-Assume our dentist practices 5 years as an associate, with an average of 90K after taxes.
-Interest: You didn't mention if 350K is with interest or not. I am assuming no interest. With a 5.6% per year, the 350K will soar to 460K after 5 years. We obviously don't want that. So we will pay off our debt as soon as we practicing as an associate. Let's say that he reserves 40K/per year for paying off his debt (I don't know how conservative/liberal this value is. Without a family he should be OK). During this time his total debt will look:
1st year as associate: $327,000
2nd year: $303,000
3rd year: $278,000
4th year: $251,000
5th year: $223,000
This is with interest factored in. So after 5 years he will have paid off 127K of his initial 350K debt. Keep in mind that this is very basic math; the interest rate might flunctuate and inflation/deflation might make the real value paid much higher or lower.
Our dentist has 50K remaining but, as you said, what if he has a house? It gets tricky here; you gotta factor in other things as well: Food, gas, bills, you name it. He obviously needs to start saving up for retirement too. But I guess it's only safe to assume that he will be able to make ends meet with 50K remaining.
It's also been 5 years and our dentist wants to buy his own practice now. He needs to take out another loan. Something around 200-300K to set up his own practice & hire staff (let's go with 250K). This will have to be a private loan, not government, so the interest rate will be higher. His 223K outstanding debt is still there, so let's add up these values and average the interest rates (9% for private interest. Average 7.4%. Again, this is really basic math but it should be about right).
Our dentist is business savvy and starts doing 120K net. By his tenth year, this goes up to 180K so let's say average is 150K for these years (which is the average for a GD anyway). He also has a family now and is only able to reserve 65K/year to pay off his debt:
Total debt: 473K
1st year in practice, 6 yrs out of graduation: 438K
2nd year in practice: 400K
5th year: 309K
10th year: 37K
As you can see, he was able to pay both his student loan and private loan upon 15 years after graduation. This may sound long, but he didn't really have any financial hardships during this time: His take home after loans was 85K. We could run this model with our dentist reserving more money to pay off his debt and that would shorten the period significantly. So, either 15 years with 65K per year or <10 years with higher yearly payments. All depends on his circumstances, really.
This is all basic math and I am sure someone with more time and better financial knowledge will find a flaw in these calculations, but I am really bored at work and didn't have anything better to do than plugging in a bunch of numbers.
