@Cold Front ,
What you are describing is what has made me angry for some time now: federally-fueled expansion of higher education. The problem--as is the case with most major issues in society--is the involvement of the federal government. At most private institutions, a student could owe almost 1 million dollars for training in Ortho, Endo, Prosth, and Perio (DDS + specialty).
The problem is that students are entering these programs and taking out the loans blindly, thinking that they will get the same economic return that their predecessors received.
They won't.
The education debt is a ticking time bomb. The big question in everyone's mind is - how much is too much? It's interesting that lenders; federal and private are using historical figures to keep lending more and more every year, because they see default rate for professional school grads are lower than undergraduate borrowers. Their data also shows that professional graduates are more likely to find jobs and able to pay their loans. Those two indicators are the driving force for lenders to keep lending to dental students, but they are not taking other realities into account - that wages/income, cost of living, insurancd reimbursement fees, number of patients and procedures a dentist can see and perform has not kept up with the soaring debt.
So the concept of borrowing blindly starts at undergraduate level, and majority of dental students are directly entering dental school after they complete their bachelor programs, without experiencing what it feels like to look for a job and pay back loans. It can be even worse for those who directly enter residency after dental school. But hey, those students are entering dental schools because "dentistry is a great profession, and you will make great income, so lets worry about that loan agreement when you finish school". That's the mindset problem in a nutshell.
It's a fact that quality of life for dentists has changed due to growing debt. I personally know fellow graduates who are on IBR programs, who are just paying interest on their loans. Their debt is actually rising under this repayment program, and purely benefits the lenders. Imagine owing $100k undergrad, $350k dental debt and you are on IBR. That loan will go up slowly to $500k or more if you don't find a better income to offset the interest on the loan. IBR is more common practice for graduates today than they were 5-10 years ago, and we will see more of this trend in the future.
Even if new graduates choose to pay their loans more under 25 years repayment, most would have to spend $0.40-0.50 for every after-tax $1 they earn for the first 5 years of their career. This doesn't leave much room for other living expenses; like mortgage, car, savings, etc. This also discourages those new graduates from buying or building a practice, or evening buying a home.
In my city, millennials are moving to downtown areas and renting properties, because they want to save on driving expenses or owning a car all together, primarily due to education debt - plus they won't be able to afford buying a property due their income-to-debt ratio. So there is a rental boom that developers are capitalizing on in many parts of the country, not to mention baby boomers who are also down sizing from their suburban area homes to city centers, keeping property values high and unaffordable to majority of young people. So there are so many suburban homes on the market for a great deal now, and it's interesting to see if this new dynamic changes - fueled by young people with huge debt.
