As changes to federal student loan policy loom, students considering a dental career must un derstand not only how we arrived here—but how to prepare for what’s coming next.

Becoming a dentist requires a minimum of eight years of postsecondary education, often followed by additional training. Unlike medical residents, however, most dental and orthodontic residents do not receive a salary or stipend during training. Instead, many continue paying tuition while interest accrues immediately on borrowed funds.

As a result, federal loans have become the backbone of dental education financing:

• Approximately 85% of dental students rely on Direct Loans (1)

• Nearly 80% of those students also use Grad PLUS loans to cover costs beyond Direct Loan limits (1)

Until now, these federal options provided flexibility, borrower protections, and access to income-driven repayment plans—features not typically available in private lending (2).

Beginning July 1, 2026, provisions of the One Big Beautiful Bill (OBBB) Act will significantly reshape how graduate education is financed (3).

Key changes include:

• Direct Unsubsidized Loan limits capped at $50,000 per year, with a $200,000 lifetime maximum

• Elimination of the Grad PLUS loan program entirely

With federal options restricted, many students will be pushed toward private or commercial loans to bridge the difference. These loans often:

This shift places greater importance on something students don’t often think about early enough: creditworthiness.

Creditworthiness affects far more than student loans—and in a post–Grad PLUS environment, it may determine whether private financing is available at all. As federal lending options narrow, lenders will place greater emphasis on an applicant’s credit profile when evaluating risk.

A strong credit history can influence:

• Interest rates: Higher credit scores often qualify borrowers for lower interest rates, which can translate into tens of thousands of dollars in savings over the life of a loan.

• Loan approval and terms: Lenders review credit history to determine not only whether a borrower is approved, but also the structure of the loan—including required co-signers and repayment terms.

• Housing opportunities: Many landlords assess credit scores during tenant screening, and lower scores may result in higher security deposits or limited rental options.

Even during school, small habits can make a meaningful difference:

• Pay every bill on time
• Payment history is the single most important factor in your credit score. Automate payments whenever possible.
• Keep credit utilization low
• Aim to use less than 30% of your available credit limit on credit cards.
• Limit new credit applications
• Each hard inquiry can temporarily lower your score—only apply when necessary.
• Keep older accounts open
• Length of credit history matters. Even unused accounts can help your score if kept in good standing.
• Review and dispute errors
• Regularly check your credit report and challenge inaccuracies that could unfairly drag your score down.

Being mindful of when you apply to dental school—and how you prepare financially beforehand—has never been more important. Establishing strong credit habits early won’t just help you adapt to upcoming loan changes; it can also reduce borrowing costs and improve financial flexibility long after graduation.

In a shifting lending landscape, preparation is power.

1. Istrate EC, Samanta A, Booker CL, West KP. Dentists of Tomorrow 2024: An Analysis of the Results from the ADEA 2024 Survey of U.S. Dental School Seniors. ADEA Education Research Series, Issue 7, December 2024.
2. U.S. Department of Education, “Federal vs. Private Loans,” FederalStudentAid, https://studentaid.gov/understand-aid/types/loans/federal-vs-private (Accessed August 20, 2025.) 
3. Sec. 81001, One Big Beautiful Bill Act (Pub. L. 119-21)
4. Stripe. How to Determine Creditworthiness and Build Your Credit