Even as a teenager, Justin Le knew he would be a dentist one day.
He set out on the path toward his goal by enrolling for his undergraduate education at the University of the Pacific. He knew that by meeting the school’s academic requirements, he would have a guaranteed interview for the college’s esteemed dental school.
The one thing he wasn’t thinking about when he selected the school? The cost of tuition. “I just wanted to make sure I got into school, and I thought I’d worry about the payment later,” Le says.
Who: Justin Le
Lives in: San Jose, Calif.
Profession: Dentist, El Paseo Dental Care
His degree: DDS, 2010, University of the Pacific Arthur A. Dugoni School of Dentistry
Annual tuition in 2015: $101,050
Between Stafford loans, Direct PLUS loans, and private student loans, Le finished his graduate education with more than $360,000 in student loan debt and a monthly payment of about $5,000 per month. (His parents had helped him pay for undergraduate.)
While that’s a large sum for a young person to owe early on in his career, it’s not unusual for a dental student. Nearly 90% of dental students in 2015 borrowed money to pay for their education, with more than one-third borrowing more than $300,000, according to the American Dental Education Association. The average debt load among those that borrowed was $255,600.
Still, dentists know that they’ve got the potential future income to manage such debt. The average net income for a private dentist in 2013 was $181,000 for a general practitioner and $284,000 for a specialist, according to the American Dental Association.
Opening His Own Practice
Le worked for a few months as a dentist in another practice, when an opportunity came up to open his own business.
“The property was an old dental office and it had a lot of the [structure] left behind, so the remodeling didn’t cost as much,” Le says.
He put together a business plan, procured a small business loan, and opened up El Paseo Dental Care in San Jose, Calif., in 2011. The first years felt tough, he says, as he was building his business from scratch. There were days when no customers came and Le worried whether the business would stay afloat.
But five years later, his fears have proven unfounded. “Business is going well to the point where I am comfortable and happy,” Le says.
Getting on Solid Financial Ground
While his business was going well, Le still had his loans to think about.
“I was taught at a very young age not to have a lot of debt,” Le says. “So I was hoping to pay them off as soon as possible.”
Even so, it was harder than he anticipated to meet that $5,000 monthly payment in the beginning.
Le went into forbearance on the loans a few times soon after he graduated and then extended the payment term from 10 to 25 years. While that lowered his monthly payment, Le was concerned that it also increased the overall amount of interest he’d have to pay on the loans, so he started looking into refinancing the debt.
“I’ve never missed a monthly payment and that track record helped me lower my interest rate.”
He approached both large and small lenders but ran into trouble because of his high debt-to-income ratio. Then, in 2015, he found and applied to Earnest.
“It was nice that they looked at me as a whole person,” he says. “They understand that I’m a dentist with a local practice so I’m not going anywhere. I’ve never missed a monthly payment and that track record helped me lower my interest rate.”
With his new, lower-rate loan, Le hopes to pay off the entire debt within the next three years, eight years after finishing dental school.
In the meantime, he’s making his debt payments a priority. That means continuing to live frugally: renting a small apartment, cooking at home, and sticking with his older-model car rather than purchasing a new one like many of his peers.
Once his loans are paid off, Le plans to start saving the extra cash for a potential home purchase and a wedding, but he’s in no hurry to start adding expenses to his life.
“I’d be happy just to make money for a while and save and not have to worry about student loans,” he says.
Justin’s money tips:
Shop around to refinance your loans. Le had to approach several lenders before he found one that would work with him to refinance his loans. Each lender may offer you different rates, and the loan servicing and technology can differ between lenders as well.
Forget about keeping up with the Joneses. While some of his friends are buying new cars and moving into fancier digs, Le’s frugal lifestyle will allow him to more quickly pay down his loan.
Make the leap when an opportunity presents itself. Starting a business is a risk but if you’ve got a solid business plan and a hard work ethic, it can pay off both personally and professionally.