Be Smart about Student Loans

December 4, 2019

Borrowing at least some of the money needed to pay tuition and other expenses is a fact of life for just about anyone who pursues higher education. However, while borrowing isn’t something to take lightly, fear of student loan debt needn’t derail the desire to attend optometry school. Many sources of need-based or merit-based scholarships and grants can be found, and a couple of key dynamics work in optometry students’ favor. “In general, optometry students can use federal loans to cover what they need, which means they can avoid private loans, which tend to have higher interest rates and fewer options in repayment terms,” says Rob Bertman, CFA, CFP, a senior consultant with Student Loan Planner, a company that provides personalized strategies for tackling debt. Also, Bertman says, “Optometrists have six-figure income potential.”

According to the latest numbers reported by ASCO, across the U.S. schools and colleges of optometry, the percentage of graduates with debt ranges from 67.9% to 100.0%, and average indebtedness is $178,922 (graduate and professional school debt, not including undergraduate debt). And according to the American Optometric Association, the median annual wage for optometrists is $143,520. The Bureau of Labor Statistics reports a favorable job availability outlook for ODs, projecting that employment of optometrists will increase 10% from 2018 to 2028, which is faster than the average for all occupations. The numbers constitute a manageable scenario with regard to student loan debt, Bertman says, as long as graduates approach it wisely, including borrowing as little as possible; keeping cost of living low while in school; starting repayment immediately after graduation; and, should they happen to marry someone with their own student loan debt, getting a cohesive plan for dealing with both debts at once. He also advises graduates to commit to either paying off their loans aggressively or choosing income-driven repayment to keep payments as low as possible and maximize forgiveness.

Sarah Huff, MS, OD, FAAO, a 2016 graduate of the Midwestern University Arizona College of Optometry (AZCOPT), where she’s now an assistant professor, is a good example of how it can work smoothly. Dr. Huff considers herself fortunate that she had no student loan debt from undergraduate school to carry over to optometry school. “I knew my optometry education would be costly as is any medical degree,” she says, “however, I knew it would be a wise investment because a career in optometry would allow me to pay back my student loans in a reasonable amount of time.”

Prior to starting optometry school Dr. Huff applied for and was chosen to receive funding from the Western Interstate Commission for Higher Education (WICHE). The organization’s Professional Student Exchange Program enables students in 10 western states to pay reduced tuition to attend out-of-state professional healthcare programs when the desired fields of study aren’t offered at public institutions in their home states. In exchange, students agree to practice in the state of the program they attended for four years after graduation. In addition to the WICHE funding, Dr. Huff made use of federal student loans. “My plan during optometry school was to be frugal and return any student loan money that I did not need following disbursement,” she explains. “I also had a timeline of when I wanted my loans to be paid off following graduation.”

After graduation from AZCOPT, Dr. Huff completed a residency in primary care and ocular disease at the New Mexico VA Medical Center in Albuquerque. During residency, rather than postponing loan payments with deferment, she used the income-based repayment option to begin paying on her loans. After residency, she changed to the standard repayment option that would allow her to pay off the debt in 10 years. “I also currently have a mortgage so I am cognizant of how I spend money,” she says. “However, my financial situation has not impacted my quality of life or my future career goals.”  When asked what advice she would give to optometry students about student loans, Dr. Huff says at the top of the list is to return any extra funds following loan disbursement. “It may be tempting to use your extra disbursement on a new car, a wedding, a trip, etc., but the interest will compound and the final cost could be exponential,” she notes. “Even now, when I have extra funds I make an additional payment on my loan.”

The biggest mistake graduates can make, Student Loan Planner’s Bertman says, is to not have a strategy for repaying their student loans. “It can be easy to become indecisive about what to do because there’s a lot of information and advice out there, some of it seemingly conflicting,” he says. “But no matter what an individual’s situation is regarding school debt, there’s a path forward that makes sense.”