By Jason Compton, SoFi

Starting a medical practice soon after finishing a medical residency or graduating from dental school may sound a bit crazy. But it’s a real and very serious option—one you can definitely crank if you’re willing to get equally serious about taking control of your finances, especially your student loan debt.

Debt-wise, the numbers sure can be daunting. The average medical school debt for a 2015 graduate was nearly $181,000, according to the Association of American Medical Colleges. Think that’s a lot? Well, dentists are paying even more. The American Dental Education Association put the average dental school debt load in 2015 at over $255,000.

But those stats don’t have to mean putting your dreams of opening a practice on hold.

Meet Brandi Lindsey, a dentist based in Uvalde, TX; Ian Augustin, an anesthesiologist in Eau Claire, WI; and Jaclyn Martinez, a San Jose, CA, dentist. We asked them to share their experiences and some advice about how to make it in a private practice while still paying off student loans. Here’s what they told us.

Debt is part of life, and that’s okay.

Dealing with med school student loans may seem like an overwhelming responsibility as it is, without taking on the additional financial pressures that opening a practice brings. But there’s no rule that says you have to knock out your student debt before investing in professional growth.

Brandi Lindsey graduated from University of Detroit’s Mercy School of Dentistry with over $250,000 in student loans. Refinancing student loans reduced her interest rate by more than 2.5% and enabled her to save $23,000 over the life of her loan. After talking with an accountant about the implications of taking on additional debt to finance her business, she was given a green light. Borrowing for her practice turned out to be advantageous both as a professional and as a taxpayer by reducing her income tax bracket. “Practice debt, even though you’re backing it personally, can help your tax status,” says Brandi.

Beware of forbearance

Lots of medical and dental school graduates are startled by their student loan payment amounts when they start coming due. But being more proactive about payments during forbearance can reduce some of that shock.

Mandatory forbearance for medical and dental residents and interns means lenders must reduce or suspend required payments during a qualified residency or internship program. But during forbearance, debt only grows because interest racks up behind the scenes. Refinancing sooner, rather than later, will help with those interest rates.

Ian Augustin feels the sting years after his 2009 graduation from Loyola’s Stritch School of Medicine. Refinancing cut more than 2% of interest off the remaining $125,000 he carried from his med school days. This not only lowers the interest he’s paying each month but more importantly, will save him over $50,000. “My biggest regret, looking back, is becoming complacent. I allowed myself to forget about that debt burden,” he says. “Knowing what I know now, I would have spent more then to refinance and start paying them down during my four-year residency.”

Don’t finance your business with plastic.

Borrowing is definitely a place you want to let the halo surrounding your profession work to your advantage. Financial institutions are generally enthusiastic about lending to medical and dental practitioners, so don’t finance the business on credit cards. In fact, look for opportunities to pay those down and instead seek out small business loans, augmented by personal lines of credit if necessary, to pay for the initial capital and labor costs of building a practice.

Brandi is a perfect example of someone who’s the right blend of patient and aggressive—she bought her practice in gradual stages. Lenders wouldn’t front her the money she needed to buy everything she wanted on day one; so she borrowed to invest in the practice, but rented her space at first. After 18 months, she’d built up enough equity and momentum for additional financing, and she bought the building.

Cut out high-rate loans.

Medical school loans can come with disadvantageous and inflexible interest rates. But there’s a straightforward fix: reduce rates by refinancing.

Refinancing helped Jaclyn Martinez, a graduate of the prestigious University of the Pacific Arthur A. Dugoni School of Dentistry, save $100,000. “Being able to restructure my dental school debt at a lower interest rate saved me a ton of money. I’ve recommended refinancing to all of my classmates and colleagues, especially friends who went to medical school,” she says. “I’m not paying much more per month than I would have with my government loans, but more is going toward principal.”

Build a second-opinion financial and legal A-team.

You need the right professional and clerical staff to serve your patients, and you need a business team that understands your field and goals. A good attorney and a solid accountant are imperative.

You also have to be ready to act like a CEO and replace anyone who doesn’t understand your mission or objectives. “I’ve been through three CPAs since starting my practice,” Brandi says. “A good CPA will understand your goals and makes recommendations based on your specific interests, not just on some formula aimed at getting a dentist to retire by age 55.”

Think long-term, because these choices really matter.

Starting a medical practice or joining an existing practice won’t mean financial success overnight. Like almost everything else worthwhile, that takes time.

At the end of his Mayo Clinic residency in 2013, Ian had $275,000 in student loan debt and faced a tricky choice. He could have signed on with a major medical organization and taken an ample salary, as anesthesiology is the #7 highest-paying medical specialty. Instead, he decided to join a smaller private practice and get on a partnership track. That decision meant taking a lower starting salary in exchange for an equity share in the practice after a successful two-year break-in period.

Ian took the long-term view when deciding where to set up shop, and it put him right where he wanted to be. He estimates that he gave up $200,000 in salary during those first two years. While that’s money he could have used to pay down his substantial debt, the savings from his refi, combined with the personal and professional benefits of joining a practice, made the decision easier. “It is a financial sacrifice to get into private practice,” he says. “But the real benefit is in having a say in the practice, and that freedom was more appealing to me.”

Ultimately, it’s about freedom; not money.

Jaclyn is currently working at her father’s practice, which she is in the process of buying. While developing the business plan and working through her financial needs, she confronted a reality: for her, the decision was much more about individual preferences and goals than money.

Even with the long-term savings on her student debt as a result of refinancing her dental school loans, buying her dad’s dental practice will mean carrying a total of more than $1 million in debt. She’s gearing up to do it, but the personal struggle is real. “Dentists have inherently low-risk personalities, but if I just wanted to make money, I would have stayed in biomedical sales,” she says. “Buying my own practice means that I’m in charge of the care, and that allows me to better help people.”

The first step toward a future as an independent medical or dental professional is taking charge of student loan debt.

All individuals featured in this article refinanced their student loans through TDA Perks partner SoFi. The average SoFi dentist saves around $49k* over the life of his or her loan simply by refinancing.
*Average savings calculation is based on all SoFi dental members who refinanced their student loans between 1/1/15 and 12/31/15. The savings calculation is derived by taking the estimated lifetime cost of existing student loans minus the lifetime cost of SoFi loans upon refinancing for SoFi members who refinanced their student loans.