President Donald Trump signed the One Big Beautiful Bill Act into law in 2025, and it means big changes to lending options for new dental students next year.
The grad PLUS loans that professional students have long used to pay for medical and dental school are being closed to new borrowers on July 1, 2026. What’s more, at that time, the federal direct loan program will cap loans for professional degrees at $50,000 per year and $200,000 total.
As a result, many dental students may find themselves looking for alternatives to finance their education. Here’s what they need to know about private student loans.
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Private Loans May Be Your Only Option
While some scholarship programs may be available to offset the cost of dental school, 82% of dental students rely on loans, according to the American Student Dental Association. What’s more, the average debt for 2024 dental graduates was $312,700. That means there is a large gap between what the federal government will lend and what students need.
“It’s a huge difference,” says Dan Farnesi, a chief financial officer with HelloCollege, a company that assists students and families with higher education decisions. “It used to be you could get (federal) loans up to the cost of attendance.”
With that option off the table, private loans may be the only way for students to afford dental school.
Credit History Could Be a Factor in Loan Decisions
While federal loans are available to most students, private loans are subject to the lender’s underwriting guidelines. That includes meeting credit requirements.
“Having a credit history is really important,” says Jason DiLorenzo, head of growth for the medical sector for Juno, which helps students negotiate better loan rates. “Private lenders are going to look at your credit score. You’re going to want to have a credit score above 700 or even 720.”
Every lender has its own criteria, though. Dan Kennedy, chief marketing officer for private lender College Ave, says his company reviews a potential borrower’s credit history, although they aren’t necessarily looking for a specific credit score.
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You May Need a Cosigner
Dental students may have a limited credit history, in which case they may need someone to vouch for them.
“In most cases, students are going to have to have a cosigner,” Farnesi says.
A cosigner is someone who agrees to be responsible for the loan balance if you are unable to pay it off. As a result, parents are most likely to agree to be cosigners.
If you have a limited or poor credit history, consider lining up a cosigner in advance of applying for loans. Some lenders will release a cosigner from a loan after a specific period — such as once you have made 12 consecutive payments after graduation — and this may help encourage a family member to agree to cosign.
Your School Could Affect Your Loan Options
Your choice of dental school could also impact the availability of private loans for your education.
“We lend to most schools,” Kennedy says. “We don’t lend to all schools.”
Lenders may not provide loans for programs at unaccredited or for-profit schools, for instance.
Even if your lender doesn’t care what school you attend, you should think carefully about where you apply, Farnesi advises. “The biggest thing to look at is the ROI,” he says, noting the wide discrepancy in dental school tuition.
While you could spend nearly $120,000 a year at the University of Southern California, it may be wise to consider whether that program will provide you with significantly greater earning potential than, say, the $55,000 program at the University of California, Los Angeles.
[Can You Refinance Student Loans While in School?]
Interest Rates and Terms Will Vary
“Just like any borrowing, you have to be aware of the rates,” Farnesi says.
Most private student loans are offered with a range of rates. Those with better credit histories are typically offered lower interest rates, which could save you thousands of dollars over the life of the loan.
Students may also choose between fixed and variable rates. “The most conservative approach is to take a fixed rate,” according to Farnesi. A fixed rate is locked, so there is no risk of it increasing.
Beyond interest rates, dental students should consider whether a loan comes with an origination fee — which is usually charged as a percentage of the total loan amount — or prepayment penalties. Both are relatively uncommon in the private school loan market but double-check before borrowing to be sure.
Not Every Loan Program Will Defer for Residency
Most private student loans include deferral provisions. This allows students to forgo payments while they are still in school. After they graduate, there is a grace period before payments begin. However, some dental students could benefit from a longer deferral period.
“Dentists who chose to do a residency want to be sure they have deferment,” DiLorenzo says.
Some large private lenders have loan programs specifically for dental students, and these include deferrals for residency. For instance, College Ave offers dental graduates a 12-month grace period before payments begin, and an additional 24 months are available to those who enter a residency.
Other private loans may not offer a residency deferral, so check this detail when looking for a lender.
Choose Repayment Plans in Advance
Unlike the federal student loan program, which allows borrowers to change their repayment plan at any time, private loans may lock students into a specific repayment plan that can only be adjusted by refinancing.
Repayment periods can range from 5 to 20 years at many lenders. Dental students should be realistic about their income expectations when deciding how quickly they can repay their loans.
If there are no prepayment penalties, it may be smart to choose a longer repayment period to avoid being burdened with large payments early in your career. Then, as your income increases, larger payments can be made to pay off the loan early.
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What Future Dentists Should Know About Private Student Loans originally appeared on usnews.com
