You finished dental school. Somewhere between $150,000 and $400,000 in debt is now sitting across three different accounts, and most of the advice online was written for American grads with a different mix of loans on different terms. The Canadian situation has its own logic.
The order you pay things off in matters more than how aggressively you pay any single piece, and a couple of policy changes that quietly happened in 2023 and 2025 have made the right strategy meaningfully different from what your older colleagues figured out a decade ago.
This is a guide to the actual sequence. What to attack first. What to leave alone. Which programs you might qualify for. And a few things to skip even though they feel responsible.
Key Takeaways
A typical Canadian dental grad finishes school with debt spread across three sources: a federal student loan, a provincial loan, and a professional line of credit (LOC). The three behave very differently and need different treatment.
Federal Canada Student Loans have been interest-free since April 1, 2023. Paying them down aggressively saves you nothing and locks up cash that could be working harder elsewhere.
The professional LOC is almost always the right debt to attack first. It floats with prime, runs into six figures, and is the only piece actively costing you serious money.
As of December 31, 2025, dentists became eligible for Canada Student Loan Forgiveness, up to $60,000 over five years for working in communities of 30,000 or fewer. The catch: it only covers the federal portion of your loan, which is usually the smallest slice.
Aggressively paying off all your debt before investing or saving for a practice purchase is usually a mistake. Compounding doesn't wait, and lenders care more about cash flow than about your debt being zero.
Free Guide
Most dentists make at least 3 of these 5 financial mistakes.
They're common, they're expensive, and dental school never covered any of them. See which ones you're making.
What does the average Canadian dental grad actually owe?
The range is wide. A frugal grad in Halifax with some parental support might leave with $120K. A Toronto grad who paid full freight and rented downtown for four years might be looking at $350K or higher. Most land somewhere in the $200K to $280K zone.
The reason the spread is so wide is that the cost itself varies dramatically by school. University of Toronto's DDS runs roughly $45,000 a year in tuition and fees for domestic students. UBC's DMD comes out closer to $60,000 a year once clinic, instrument, and lab fees are included. Dalhousie, McGill, and the University of Alberta all sit in the high-five-figure range annually. Add four years of living expenses on top of any of those and the math gets ugly fast.
Almost everyone funds it the same way:
A federal Canada Student Loan, capped at $300 per week of study.
A provincial loan from the home province (OSAP, StudentAid BC, Alberta Student Aid, etc.).
A professional line of credit from one of the major banks, typically with a limit between $300,000 and $400,000.
The federal loan is small. The provincial loan is small to medium. The LOC carries the rest. By the time you graduate, your LOC is almost certainly the largest single debt you've ever taken on. Probably the largest you ever will.
Which debt should you pay off first?
The rules changed.
Before April 2023, federal student loan interest was tied to prime, and "pay your federal loan off fast" was reasonable advice. That isn't true anymore. The federal government permanently eliminated interest on Canada Student Loans effective April 1, 2023. New interest doesn't accrue. Any balance from before that date might still carry pre-April-2023 interest charges, but the going-forward cost is zero.
When debt is at 0%, you don't pay it off any faster than you have to. You make the minimum and redirect everything else.
Provincial loans are messier. It depends on which province issued the loan. British Columbia, Manitoba, New Brunswick, Nova Scotia, PEI, and Newfoundland have moved to 0%. Quebec charges prime plus a small margin. Ontario sits at prime plus 1% on the floating rate. Saskatchewan charges prime. Alberta still charges interest, reduced to prime with no margin since July 1, 2023. With prime sitting around 4.45% in 2026, that's real money for an Alberta or Ontario grad.
The LOC is almost always priority one. Most dental and medical lines of credit are priced at prime minus 0.25%, which sounds friendly, but the balance is enormous and the rate floats. A $250,000 balance at 4.20% costs about $10,500 a year in pure interest. That number is roughly the entire annual interest bill on a typical Canadian dental school debt stack, and it's all coming from one place.
Working priority for most grads:
Professional LOC. Aggressive principal payments. The math is loudest here.
Provincial loan, if you're in Alberta, Ontario, Saskatchewan, or Quebec. If you're elsewhere, it's at 0% and goes in the "minimum payment only" tier.
Federal Canada Student Loan. Minimums. Don't accelerate. The cash is better deployed elsewhere.
A note on the Repayment Assistance Plan. RAP caps your federal payments at 10% of household gross income, with no payments at all below $40,000. It's a useful safety net, but for working dental associates it almost never applies. You'll exit eligibility within a couple of months of starting your first job. Worth knowing it exists. Probably not worth planning around.
What strategies do most Canadian dentists overlook?
Most generic advice you'll find stops at "pay your debt aggressively" and never gets into the specific levers Canadian dentists actually have.
The rural forgiveness program (which now includes you)
On December 31, 2025, the federal government quietly expanded Canada Student Loan Forgiveness to include dentists. Real policy change, real numbers, still flying under most radars.
The structure is five years of forgiveness, escalating in value: $8,000 in year one, $10,000 in year two, $12,000 in year three, $14,000 in year four, $16,000 in year five. That's $60,000 total. Eligibility requires working in a community of 30,000 or fewer for at least 400 hours (or 50 days) over a consecutive 12-month period. The five years don't have to be back-to-back.
Two catches worth knowing. First, forgiveness applies only to the federal portion of your loan. Not your provincial loan. Not your LOC. Since the federal loan is usually the smallest piece of the stack, and since it's already at 0% interest, the dollar value is less dramatic than the headline suggests. Second, only work performed on or after January 1, 2025 counts toward eligibility, so anything earlier doesn't bank.
Where this becomes meaningful is when you stack it against rural associate compensation, which often runs 30 to 50% above urban rates. Lower cost of living, higher pay, and forgiveness on a chunk of debt. For someone in their first three or four years out of school, especially if they're not committed to a specific city yet, that math is genuinely interesting.
The cash reserve question
Most dental grads are told to throw every spare dollar at debt. That's usually wrong if you have any intention of buying into a practice within five years.
Practice acquisition financing in Canada often covers up to 100% of the purchase price for established practices, but lenders look at debt-service coverage, working capital, and personal liquidity. Walking into a practice purchase with $0 in personal savings because you funneled everything into LOC paydown isn't the strong move it sounds like.
A reasonable working reserve sits somewhere between $30,000 and $50,000 of liquid cash. Emergency fund plus opportunity cushion. Anything beyond that, attack the LOC. But the reserve comes first.
The corporation and your LOC
If you're an incorporated associate in a province that allows associate corporations, a question comes up constantly: can my corporation just pay my LOC?
Not directly. The LOC is in your personal name, and a corporation can't pay personal debts without first paying you, which triggers personal tax. What the corp can do is hold retained earnings inside the company at the small business tax rate (around 12% combined federal-provincial in most provinces, on the first $500,000 of active income), which is a fraction of your personal marginal rate.
That deferral is the actual benefit. Take what you need each year, leave the rest inside the corp, and use the personal income you do take to service the LOC.
The decision of whether to incorporate at all is a separate question. Timing matters more than people think. We've covered when it makes sense and when it doesn't in our piece on whether dentists should incorporate.
Tuition tax credits in years one and two
If you graduated recently, you almost certainly carried unused tuition credits forward into your first working years. Those credits reduce federal and provincial tax bills directly. Not a debt strategy on their own, but they free up after-tax cash in years one and two of practice. Which is exactly when a disciplined dentist puts that cash against the LOC.
What should you build while paying off debt?
Almost no debt-payoff guide for dentists answers the question that actually matters by year three: what should I have started building back in year one?
Waiting until debt is gone before investing is a math error. If your LOC is at 4.2% and a long-term equity portfolio returns 6 to 7% net of fees, you're losing real money every year you don't invest. More importantly, you're losing time. And time is the only ingredient compounding actually requires.
The basic structure for a dentist in their first five working years usually looks something like this. A TFSA contribution every year, even if it's small, because compounding inside a tax-free account over 30 years is enormous and you can't get those years back. RRSP contributions if you're not yet incorporated, or if your incorporation strategy includes personal-name savings. And a separate practice-purchase fund, held outside any registered account, accumulating toward the down payment and working capital you'll need.
Paying down 0% federal loans aggressively. Every dollar you put against a 0% balance is a dollar not earning anything else.
Treating the LOC like a long-term mortgage. Banks don't aggressively call it in, but the rate floats and the discipline doesn't enforce itself. Make principal payments. Don't just service the interest.
Moving to Toronto or Vancouver right out of school. The associate income premium isn't enough to offset what those cities do to your savings rate. A few years somewhere cheaper, if you're open to it, can change your trajectory.
Waiting until debt is fully gone before investing. You're trading early-decade compounding for the psychological satisfaction of a zero balance. Bad trade.
Forgetting your provincial loan exists. Especially Alberta and Ontario grads. Track it separately. The interest is real.
Putting off the incorporation conversation. Even if you don't incorporate in year one, the conversation should happen in year one or year two. Don't make decisions backwards.
Where to go from here
Paying off dental school debt isn't a single decision. It's twenty smaller decisions about sequencing, timing, and trade-offs, and most of them get easier with someone who's seen the pattern before. If you want to walk through your own stack, or you're trying to figure out whether to start saving for a practice or attack the LOC harder, that's a conversation worth having sooner rather than later.
Reach out to Surcon Mahoney Wealth Management for your own, personalized wealth management plan. We’ve helped dozens of dentists achieve the financial freedom they want and deserve.
Want help deciding what to pay down first, and how to balance debt with investing and practice planning?
