Powerful Tips To Pay Off Optometry School Loans Faster

Optometry school is a major financial investment. Many students enter their programs expecting to graduate with student loan debts between $120,000 and $150,000. But with rising tuition costs and living expenses, that debt can often climb to over $200,000 for many optometrists (ODs). This significant debt can transform a manageable 10-year repayment plan into a daunting 20-year or longer financial burden.

The reality of student loan debt often hits ODs after graduation, when rent, utilities, car payments, and other bills begin rolling in. It’s at this point that many realize the heavy weight of their debt and the opportunities they may have to sacrifice because of their financial obligations. But even in the face of this overwhelming debt, there are ways to regain control and pay off your student loans faster.

Student Loan Debt in the U.S.

According to StudentLoanHero.com, the total student loan debt in the U.S. is a staggering $1.56 trillion. Here’s a breakdown:

• 44.7 million Americans carry student loan debt.
• The total student loan debt is $521 billion more than the total U.S. credit card debt.

The weight of this debt is causing some people to take desperate measures. According to a survey by MyBankTracker.com:

• 30% of respondents would sell an organ if it meant clearing their student loans.
• 43% would sell half of their possessions to erase their student debt.
• 38% would participate in questionable health studies to eliminate their debt.

While extreme actions like these aren’t necessary, it does underscore just how stressful student loans can be. Fortunately, there are more practical—and safer—ways to handle this financial burden.

5 Tips to Pay Off Optometry Student Loans Fast

Few things are more frustrating than seeing a large portion of your paycheck go straight to student loan payments. But there are ways to speed up the process and pay off your loans faster. Recently, in an episode of Divas Talk, I had the pleasure of interviewing Dr. Deanna Born, who paid off her student loans in less than 6 years after graduation. Below are some of her key strategies.

1. Refinance Your Interest Rate

Refinancing your student loans can significantly lower your interest rate, making it easier to pay off the principal faster. Here’s what you should know:

• Refinancing consolidates all of your loans into one loan with a new interest rate.
• Variable interest rates tend to be about 1% lower than fixed rates.
• Rates are based on your credit history and the economy (Libor rate).

2. Make Large Payments as Often as Possible

Don’t wait for the due date to make payments. Each day you wait, interest accumulates on your loan, and your payments go toward accrued interest before reducing the principal. The faster you can reduce the principal, the quicker you’ll pay off your loan.

3. Apply Raises and Bonuses Toward Your Loans

Whenever you receive a raise, bonus, or unexpected windfall, consider putting that extra money toward your student loans. This can make a huge dent in your balance and shorten the repayment period. Check out our recent article on how to maximize your earnings for higher income.

4. Target High-Interest Loans First

Prioritize making your largest payments toward the loan with the highest interest rate. This strategy helps you save money on interest in the long run and accelerates the payoff timeline.

5. Consider Public Loan Forgiveness Programs

The Public Loan Forgiveness Program allows you to pay 10% of your income for 10 years. After that period, any remaining debt is forgiven, and best of all, the forgiven amount is tax-free. However, there have been issues with the government following through on this forgiveness, so proceed with caution.

If you’re not eligible for public loan forgiveness, there are other repayment plans to consider:

Long-Term Repayment Options

Income-Based Repayment (IBR)

• Pay 15% of your income for 25 years. Any remaining debt after this period is forgiven, but the forgiven amount is taxed as income.

Pay As You Earn (PAYE)

• For loans taken out after July 2014, pay 10% of your income for 20 years. Any remaining debt is forgiven and taxed as income.

Revised Pay As You Earn (REPAYE)

• Similar to PAYE, but includes both 20- and 25-year plans depending on your loan status. The forgiven amount is also taxed as income.

For optometrists who plan to open a practice or start a family after graduation, the PAYE or REPAYE plans can be a smart strategy. However, you’ll need to prepare for the tax burden on the forgiven amount.

Bonus Tip: Automate Your Payments

Set up direct deposit and email correspondence to reduce your interest rate and ensure that payments are made on time.

Helpful Resources

• NSLDS.ed.gov
• StudentLoans.gov
• Finaid.org
• Studentaid.gov
• ODs on Finance Practical Tips
• DaveRamsey.com

Watch the Full Interview

For more detailed insights, watch my full 45-minute interview with Dr. Deanna Born, where she explains how she managed to pay off her student loans in record time.

In Conclusion…

While student loan debt can feel overwhelming, the good news is that you have options to take control of your financial future. By refinancing your loans, making large payments, and exploring forgiveness programs, you can pay off your debt faster and start living the life you’ve been working toward.

If you’re an optometrist dealing with student loans and need support on your journey to financial freedom, join our community at Optometry Divas! We’re here to provide guidance, resources, and inspiration as you achieve your financial and professional goals. Click here to join now!