New graduate optometrists enter the workforce excited to put their passion for eyecare into practice and ready to apply their years of extensive education and training—yet often find themselves unprepared and without a framework to face the daunting burden of significant student loans.
For example, the average 2023 graduate optometrist carried $191,794.00 in graduate and professional student debt.1 In spite of the financial undertow, there are effective steps optometrists can take that can lead to debt-free futures. Freedom from debt offers peace of mind, financial security, arguably better health, and can open doors for new opportunities.
So how does one make a solid and strategic plan in an ever-changing environment? In the words of Harvard Business School Professor Clayton Christensen, “There is no single right answer or path forward, but there is one right way to frame the problem.” Optometrists, residents, and students need to stay agile and up-to-date.
In this article, we’ll cover the state of optometry student loans, 2024 updates, and tailored advice for optometrists, residents, and students embarking on their loan repayment journey.
Overview of the state of optometry student loans
Optometrists, like many in healthcare, face substantial student loan obligations. The average starting salary for new optometry graduates is around $120,000, whereas the average total student debt often exceeds $250,000—with some doctors accruing nearly $350,000 in debt.2 With proactive planning, this burden can be managed effectively.
The year is 2024, and Sally just graduated with a whopping $348,000 in student loans. What does she do? Sally may choose a federal student loan repayment plan (outlined below) or choose to consolidate and refinance with a private student loan servicer.
Should she follow in the footsteps of her older sister, who graduated in 2014, or forge her own path?
Changes to federal student loans for optometry graduates
Since the coronavirus disease 2019 (COVID-19) pandemic, legislative changes have reshaped student loan repayment, offering more options and flexibility. Understanding and leveraging these updates can greatly benefit optometry professionals in their repayment efforts.
Recent changes to federal student loans include the end of student loan forbearance, which resumed payments for borrowers starting October 2023 after a pandemic-related pause. Additionally, improvements to the Public Service Loan Forgiveness (PSLF) program have made it easier for borrowers in public service jobs to qualify for loan forgiveness by expanding eligibility and streamlining the application process.
Federal Student Aid offers many options for student loan repayment and provides fast facts on loan repayment plans.
Table 1 compares the requirements of federal fixed payment and income-driven repayment plans for student loans.3,4
Table 1: Courtesy of Federal Student Aid.
Private student loan refinancing
In 2024, private student loan refinancing for optometry school graduates offers an opportunity to secure lower interest rates and more tailored repayment terms. Current interest rates for private refinancing vary based on credit score and market conditions but generally range from 3.5% to 7.5%.
Graduates with strong credit scores and steady incomes are in the best position to benefit from these rates, potentially reducing their monthly payments and overall loan costs. Some lenders provide flexible repayment options, including fixed and variable rates, to accommodate different financial situations and goals.
The three most well-known companies for private student loan refinancing are:
- SoFi: SoFi is renowned for its competitive interest rates and borrower benefits, including unemployment protection, career coaching, and exclusive referral bonuses.
- Earnest: Earnest offers personalized loan terms and a unique Precision Pricing feature that allows borrowers to customize their monthly payments and loan terms to fit their financial situation.
- Laurel Road: Laurel Road is a subsidiary of KeyBank and is particularly favored by medical and dental professionals because it offers tailored options and competitive rates.
Pros and cons of student loan repayment plans
Public Service Loan Forgiveness (PSLF)
- Best fit: Optometrists with long-term career goals in public service or nonprofit roles.
- Bad fit: Optometrists planning to work in private practice or for-profit organizations.
- Benefits: Potential loan forgiveness after fulfilling specific requirements, paving the way for a debt-free future.
Tuition reimbursement programs
- Best fit: Optometrists employed by companies offering this benefit.
- Bad fit: Optometrists working as independent practitioners or in small practices that don't offer such programs.
- Benefits: Employer contributions ease the burden of loan repayment, providing a valuable financial boost.
Federal loan forgiveness programs
- Best fit: Optometrists serving in underserved communities or public service positions.
- Bad fit: Optometrists working in high-income areas or private practices are not eligible for federal programs.
- Benefits: Opportunities for loan forgiveness based on fulfilling specific criteria, offering a path to financial freedom.
Refinancing and consolidation
- Best fit: Optometrists seeking lower interest rates or simplified payments.
- Bad fit: Optometrists with federal loans that offer forgiveness or income-driven repayment plans, as refinancing with a private lender may eliminate these options.
- Benefits: Lowering interest costs and streamlining repayments, creating a more manageable financial situation.
Top tips for repaying optometry student loans
1. Consider taking on side hustles or aggressive repayment plans
To effectively pay off your student loans, consider stepping out of your comfort zone by exploring additional income streams or more aggressive repayment plans. Fill-in roles can provide an effective supplement to a full-time position.
A 2019 report from the National Association of Colleges and Employers (NACE) indicated that nearly 50% of new graduates were working more than 40 hours per week.5 This suggests that a significant portion may be working 6 to 7 days per week, especially when considering additional part-time jobs or side gigs.
2. Use your resources to tackle student loan repayment
When tackling the complexities of student loan repayment, leveraging resources like the American Optometric Association (AOA), VSP Vision, advice from fellow optometrists, and engaging with professional forums and podcasts can provide invaluable guidance and support. Find inspiration (and referral bonuses!) from your fellow optometrists!
Check out and join organizations, forums, and social pages such as:
- ODwire.org
- StudentDoctorNetwork (SDN)
- Reddit (r/optometry)
- Facebook Groups like ODs on Finance to share tips, support, and personal experiences
Confused about the next steps? The AOA has partnered with GradFin to offer free one-on-one consultations and guidance on which plan might be best for you. In addition, VSP Vision’s new Student Loan Repayment Program is aimed at helping optometry students, recent graduates, and practicing optometrists manage their student debt.
Their repayment plan offers up to $50,000 per year for 4 years to those working in underserved communities, alongside other features of advanced career support and job placement services.
3. Activate business mode
The best negotiators generate mutually beneficial solutions through joint problem-solving and creative trade-offs. Don’t compromise for less than your worth. And remember, salary alone doesn’t define your total compensation and the value your job will provide you.
Carefully think through life’s most precious commodity—time—and make your schedule work for you! Figure out how to provide the very best care in the most efficient way that maximizes both your and your employer’s potential.
Benefits like health insurance, 401(k)s, PTO, retirement contributions, and student loan repayment add up. Not up to working for someone else? Luckily for optometrists, there are tons of avenues to earn a living—consider owning your own practice after optometry school or non-clinical roles.
4. Plan and adapt to changing realities
Planning your student loan payoff requires employing effective strategies and adapting to evolving circumstances. Utilizing methods like Dave Ramsey's debt snowball, which focuses on paying off the smallest loans first to build momentum, or the avalanche method, which targets loans with the highest interest rates to minimize total interest paid, can be highly effective.
Additionally, staying informed about changing legislation that could affect repayment options and being ready to rebudget based on new income levels or life events, such as marriage or job changes, are crucial for maintaining a flexible and successful repayment plan.
In conclusion
Optometrists can navigate student loan repayment successfully by understanding their options and choosing strategies aligned with their career aspirations. With recent updates offering more avenues for relief, staying informed and proactive is key.
Paying off student loans can provide significant emotional and psychological benefits, alleviating stress and improving mental health. Studies have shown that student loan debt is a major source of stress, leading to conditions like insomnia, anxiety, and depression.6
In a survey of 1,000 borrowers, 61% felt their debt worries were spiraling out of control, and over 70% had physiological manifestations like headaches. Others report social isolation, restlessness, muscle tension, and upset stomachs.6
Eliminating student loans can lead to increased confidence, emotional relief, and improved relationships and marriages. Paying off student loans allows more room for other more meaningful life goals such as buying a home, starting a family, and giving back.
By leveraging tools like PSLF, the snowball or avalanche methods, employer benefits, federal forgiveness programs, and private loan refinancing opportunities, optometrists can confidently work towards a debt-free future, focusing on their goals and their passion for delivering exceptional eyecare.
Good luck, and don’t forget to celebrate the payoff!
