Entry #11
Is it Immoral that Dental School Does Not Teach Business?
“Tell me and I forget, teach me and I may remember, involve me and I learn.” – Benjamin Franklin
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A responsible rule of thumb is that one should not take on student loan debt in excess of their expected income resulting from obtaining the intended degree. If one expects to make $60,000 per year, it would not be financially responsible to incur greater than $60,000 in student loan debt. Within the dental field, the cost of attendance has greatly trounced upon the average expected income as a dentist. Most new graduate dentists will come out of school making a salary in the ballpark of $120,000 per year. Salary.com and money.usnews.com both report the average income of a dentist during their career to be around $150,000. Student loan debts when a student finally walks across the stage with their dental school diploma have soared to $300,000 seemingly being the floor. $400,000 to $600,000 are seeming to become the norm. With NYU releasing recent numbers estimating the 4-year expenses to now offically be over $700,000. Add this up even higher if you had to take out loans for undergraduate degree. And don’t forget the interest.
With any other career pursuit it would be considered woefully irresponsible to rack up student loan debt that was double, or even sometimes triple, what you expect to make during your career. But for some reason in dentistry…we look past this fact. Dental School tells us to bury our heads and it will be okay. The government has ‘special loan programs’ to save us.
Or maybe the truth of the matter is that the facts are not looked past, but never even acknowledged to begin with. No one in dental school informs us, the so-called generation of “Debtists,” of the sobering realities that we face after graduation in the job market. Would it not be the responsibility of our educational facilities to educate us on the fact that if you owe $400,000 and only make $150,000 then you may in fact not be able to make ends meet after your multi-thousand dollar per month, high-interest, student loan payments? Should they not teach us to question that if we are going on an income-based government forgiveness program, because without it, some dentists would be living below the poverty line after making their gargantuan student loan payments – then maybe, just maybe, we are doing something wrong?
I will firmly tell you that tuition at dental schools is not going to go down at any near point in the future. The only solution is to guarantee that your income goes up.
Ex: Early Career Dentist at $120,000 per year salary –> after-tax: $80,000 –> after student loan payments of $5,000 per month –> $20,000 per year TRUE DENTIST SALARY
Ex: Average McDonald’s Manager Salary at $43,447 –> after-tax: $32,350 –> No student loan payments –> $32,350 TRUE McDONALD’S SALARY
A lifestyle built around student loan management is an albatross that is not manageable long-term on an associate dental salary. Most dentists will take DECADES to pay off their student loans. The exception to this is if you have a working spouse with significant income and little or no debt that can shift your debt-to-income ratio to a more favorable one. Articles such as this one by Dentistry Today, show us just how out of touch with the economic and career and debt landscape some dental schools are. They are encouraging more than ever, to take on dental associate jobs, and avoid early practice ownership. Early practice ownership is the only way you are likely going to stand to make the higher income that is needed to economically justify the loans in a responsible manner.
What are the broad standing economic and social consequences of saddling health care providers with that much debt?
So, if practice ownership is the clear road to a financially responsible career; why doesn’t everyone delve into that path? Why doesn’t everyone delve into ownership as soon as possible? Well; on my Private Facebook Group, I pooled some responses to that question:
-“Debt+ignorance+lifestyle. Fear also.”
-“Don’t want the hassle or responsibility of management of the 99/100 things we didn’t go to school for.”
-“How about zero actual education of practice management?”
-“For sure debt. After buying a practice many students have got to be pushing a million.”
-“Slow start with a new practice and you have your practice loan on top of school loans and you can’t afford to make all your payment.”
The tone of the answers is recurring. Debt. Fear. Complete and utter lack of knowledge on practice management or start-up. Lack of understanding that becoming an owner can quite literally 2x — 5x your take home income as a dentist. Lack of understanding that it doesn’t take a half a million or a million dollars to open a practice, and that it can be done for under $100,000.
But is this lack of knowledge and subsequent fear our fault? Is this lack of knowledge and subsequent fear our responsibility?
Is it morally wrong to be charged $350,000 for an education that has not prepared you to fully utilize said degree? What is morality? Morality is defined as, “The principles concerning the distinction between right and wrong.”
Is it wrong that after Dental School you have no idea how dental insurance works? No idea how to design or build a practice? Is it wrong that after Dental School you have no idea how to structure a practice acquisition deal or evaluate if a practice is worth buying? No idea how to implement efficient systems in a dental office? Or truly understanding overhead?
I would argue that NO. It is not wrong. You were fully informed how much school would cost.
You saw the interest rate on the loan.
You agreed to pay it back.
You knew the average salary for a dentist.
This was your choice…….
…
But it was also the schools choice to not prepare you.
They know they are teaching you the Kreb’s cycle for the 4th time; when this time could be used to hone your patient communication skills, case acceptance skills, dental insurance knowledge, hiring, firing, staffing skills, team building and leadership skills. They know you need those skills for a highly successful career. And they know they aren’t teaching them.
They’ve heard the complaints. They don’t care. They do NOT care. And to me, there is where there is a grey area of immorality.
And we could, and should, be doing better preparing our future generations of dentists to thrive in the modern economic landscape.
However, at this point, the source of fault is no longer relevant. Yes, we can say it is Dental School’s fault, but now it is YOUR responsibility if you desire to change your circumstances. Dental school has come and gone; and you are on your own now.
Or maybe you are still in dental school; and are just now realizing that the faculty themselves, though well intentioned, are simply not capable of properly teaching dental business and practice management — because of the fact they are insulated from the true realities of the market. They are protected from these realities by the bubble of the school, they have the option to ignore it. Income-Base Debt Repayment plans will allow you the option to ignore it even longer…..but its still there. And you know it.
By and large, if you are hoping that dental school will prepare you for having a successful business career as a dentist, you’re going to be disappointed. Because dental school doesn’t even teach the basics of this.
And they know it. And they do not care.
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