When refinancing your dental loans is a mistake

Lenders make money when you refinance. We make money when some of you do, too. That’s exactly why this page exists: here’s when refinancing costs you money.

Start with the rule that can’t be undone. Refinancing turns federal loans into private ones. For those loans you lose access to RAP, PSLF, federal forgiveness, and federal forbearance and deferment, permanently.

1. You’re on a PSLF path

PSLF forgives your remaining Direct Loan balance after 120 qualifying payments. You must work full time for a government or 501(c)(3) employer (Federal Student Aid). RAP payments count, and PSLF forgiveness is tax-free.

For a dentist at an FQHC earning $150,000 with $300,000 at 8.07%, that’s about $172,000 paid and about $294,000 forgiven. A refinance example at 6.0% fixed APR over 10 years costs about $400,000 in the same case (not an offer). The math is in Refinance vs PSLF vs RAP.

“Might” counts. Might you join the VA, the military, a dental school faculty or a community health center? Keep your loans federal until you know. A 2025 rule on which employers qualify was vacated and, as of September 2026, is on appeal at the First Circuit. Check your employer each year.

2. You owe several times what you earn

RAP charges at most 10% of AGI, however large the balance. Unpaid interest is waived each month, and the rest is forgiven after 30 years. That forgiveness is taxable from 2026, but it can still win.

Take a dentist who owes $500,000 at 8.07% and earns $120,000, single, no dependents:

• RAP payment: $120,000 × 10% ÷ 12 = $1,000 a month. Interest is about $3,360 a month, so RAP waives most of it.
• Over 30 years, flat income: about $360,000 paid. About $482,000 is forgiven.
• Forgiveness tax: at 24% to 35%, roughly $116,000 to $169,000.
• All-in: about $476,000 to $529,000.

Now the refinance. Example: $500,000 at 6.0% fixed APR over 10 years is about $5,550 a month and $666,000 in total. Over 20 years it’s about $3,580 a month and $860,000 in total. Not an offer; your rate depends on credit.

With 3% raises every year, RAP totals about $571,000 plus the tax bill, or $687,000 to $740,000 all-in. That’s more than the 10-year refinance in raw dollars. In today’s dollars, which is how the tool compares them, RAP still costs far less, because most RAP dollars are paid decades from now. Put your own numbers in the refinance vs forgiveness tool. And plan for the tax: saving toward it each year is part of the RAP path. See Is student loan forgiveness taxable?

3. You’re in residency, especially a long specialty program

A resident stipend puts your RAP payment near the bottom of the scale. On $65,000, RAP is about $325 a month, and the government waives the rest of the interest.

Resident refinance loans work the other way. Payments are small, but unpaid interest builds up. SoFi, for one, adds it to your balance when training ends. In a two-year example with $300,000 at 6.0% fixed APR and a reduced payment, that adds about $33,600 (not an offer). Longer programs add more.

Details and lender options: Refinancing during residency.

4. Your income is about to get less predictable

Buying a practice, starting one, moving to a new market or cutting to part time for a new baby all make income lumpy. Federal loans flex with that. RAP recalculates from your income, and federal forbearance and deferment exist for bad stretches.

A private loan’s payment is set in the contract. Some lenders offer limited help. Earnest, for example, lets you skip one payment a year after six months of on-time payments, with interest still accruing. That isn’t the same as a payment that falls when your income does.

If you’re 12 months from ownership, keep federal loans federal until collections settle. Refinancing after the practice is stable costs you little; refinancing before it can cost you your cushion.

5. You’re tempted by a variable rate

Federal Direct Loans have fixed rates. The CFPB warns that a private variable rate could rise above the fixed rate you gave up. Your payment would rise with it.

Example: $300,000 over 10 years at a 5.5% variable APR that rises to 7.5% in year three. The payment goes from about $3,260 to about $3,500 a month, and the total is about $415,000. A 6.0% fixed APR over the same 10 years is about $3,330 a month and $400,000 in total. Both are examples, not offers.

Variable rates can make sense if you’ll pay the loan off in two or three years. If you need the full term, or rates start rising, fixed is the safer bet.

6. You’d lose death and disability protection you rely on

Federal student loans are discharged when the borrower dies, once the servicer gets proof of death. They can also be discharged for total and permanent disability (Federal Student Aid). For a young dentist with a family, that protection has real value.

Private lenders set their own policies. The CFPB says many, but not all, offer a death or permanent disability discharge. Of the lenders we checked, Earnest’s help center is clearest. Its refinance loan may be fully discharged if the primary borrower dies or becomes totally and permanently disabled. SoFi, ELFI and LendKey didn’t state a policy on the pages we read. Ask each lender in writing before you sign.

If you refinance anyway, make sure term life and own-occupation disability insurance cover the balance. See disability insurance for new dentists and term life insurance for dentists.

When refinancing isn’t a mistake

For balance, here’s the other side. An associate in private practice earning $180,000 with $300,000 at 8.07% usually repays the whole loan under RAP anyway, about $835,000 with 3% raises. Refinancing at a lower fixed rate, with an emergency fund in place, often saves that dentist tens of thousands. See Should you refinance?

What to do before you refinance

1. Rule out PSLF. Check any employer you might work for in the PSLF Help Tool.
2. Compare RAP forgiveness honestly, tax included, in the refinance vs forgiveness tool.
3. Wait out residency and the first year of ownership. You can refinance later; you can’t un-refinance.
4. Hold three to six months of expenses in cash to replace federal forbearance.
5. Get the lender’s death, disability and hardship policies in writing.
6. Choose fixed unless you’ll pay the loan off within a few years.