Student Loan Debt

AOA and AOSA strenuously support Higher Education Act

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The AOA is actively working with the American Optometric Student Association (AOSA) and its student members to ensure that their priorities, such as addressing burdensome college loan debt, are at the top of the agenda in Washington, D.C., as they urge Congress to reauthorize the Higher Education Act (HEA).

In 2018, more than 81% of U.S. optometry graduates had school debt. Their accumulated mean debt from borrowing was close to $180,000. That significant debt impacts not only how and where future doctors of optometry practice, but also the growth of future small businesses.

There are about 7,500 students enrolled in optometry schools.

"We strongly urge you to support optometry graduate students, and the future patients and communities they serve, as you continue to consider the reauthorization of the Higher Education Act," reads a July 30 letter signed by AOA President Barbara L. Horn, O.D., and AOSA President Bibin Cherian to congressional committees heading the reauthorization.

"To ensure the growth and prosperity of the profession, it is critical to ensure that student debt is not a barrier for students who want to pursue optometry."

AOA recommendations would protect students from smothering debt

The HEA of 1965 authorized several federal aid programs that provide support to individuals pursuing a post-secondary education and institutions of higher education. Every few years it comes up for reauthorization and bipartisan negotiations are now underway for a new deal.

The AOA has continued to engage directly with  key congressional leaders on declining college affordability and offering solutions, including Sen. Lamar Alexander, R-Tenn., chair of the Health, Education, Labor and Pensions Committee; Sen. Patty Murray, D-Wash., the committee's ranking member; Rep. Bobby Scott, D-Va., chair of the House Committee on Education and Labor; Rep. Virginia Foxx, R-N.C., the ranking member of the House committee.

"The AOA and state associations are relentless in advocating for our new doctor and student members," Dr. Horn says. "Together with AOSA's leaders and concerned doctors from across the country, we're making certain that optometry is fully recognized and treated fairly in federal health programs, including those aimed at the education debt crisis."

The AOA recommends that Congress:

  • Protect public service loan forgiveness: Maintain the Public Service Loan Forgiveness program (PSLF) to incentivize doctors of optometry to work in eligible public sector jobs that contribute to the eye and vision health and well-being of many communities (federal, state or local government agencies and tax-exempt nonprofit organizations). PSLF serves as a recruitment tool and has encouraged graduates to serve both rural and urban medically underserved communities. Furthermore, this program helps students pursue their passion for working in communities in need while offering federal loan forgiveness after 10 years of full-time service and on-time loan payments. AOA opposes efforts to cap the amount of student loans forgiven and attempts to tax PSLF benefits.

  • Maintain federal student loan borrowing limits: Optometry students rely on access to federal student aid to pay for their education. The current annual loan cap for optometry students is $40,500 (first years), $43,833 (second years), and $47,167 (third and fourth years) with an aggregate total (undergraduate and graduate) of $224,000. Proposals to lower caps on borrowing will drive optometry students into higher-cost private loans, which typically have higher interest rates and limited repayment options, creating an additional barrier to entry, especially for those who come from lower socioeconomic backgrounds. AOA opposes attempts to lower these caps.

  • Establish a federal refinancing option: Allow borrowers with federal student loans to refinance the loans anytime a lower interest rate is available. This would permit graduates to refinance at a low, fixed interest rate.

  • Lower interest rates: Currently, interest rates are lower for undergraduate students than they are for graduate and professional students. The federal student loan interest rate for undergraduates is 4.53% for the 2019-20 school year and 6.08-7.08% for graduate students.

  • Eliminate origination fees: Origination fees range from 1.062- 4.248% and are deducted upfront from student loans before funds are disbursed to a school. Origination fees are analogous to a tax on federal student loans paid by students and should be eliminated.

  • Restore subsidized Stafford Loans: The Stafford Loan subsidy prevents interest from accruing on a loan while a student is in school. Subsidies were eliminated for grad-professional students by the Budget Control Act of 2011, making the entire loan amount unsubsidized.

  • Promote financial literacy: The AOA supports efforts to increase financial literacy, such as requiring universities to provide meaningful, annual loan counseling for student borrowers-including comprehensive information on the terms, conditions and responsibilities of a federal student loan and information on a typical student budget; and requiring university exit counseling to include an outstanding loan balance summary, anticipated monthly payments, an explanation of the grace period preceding repayment, the option to pay accrued interest before it capitalizes, the right to request an annual credit report, and loan servicer information.

AOA opposes oppressive state laws, seeks restoration of loan eligibility

Beyond smothering loans repayment, doctors have been harmed by outdated state laws that allow states to deny, suspend or revoke a borrower's professional license as a penalty for loan default.

Thus, the AOA backs the Protecting JOBs Act (S. 609), co-sponsored by Sens. Marco Rubio, R-Fla., and Elizabeth Warren, D-Mass., which aims to prevent states from suspending, revoking or denying state professional licenses solely because borrowers are behind on their federal student loan payments. Introduced in February 2019, the bill seeks to better ensure that graduates have the ability to repay their student loans and that they are not prohibited from working as a trained professional because of debt. This only compounds their financial challenges.

Further, the AOA is continuing to argue for restoration of eligibility for doctors of optometry into the National Health Service Corps Loan Repayment Program. The NHSC offers some providers the opportunity to have a portion of their student loans repaid, while earning a competitive salary, in exchange for providing health care in underserved urban and rural areas. The AOA has been working to build support for re-inclusion for doctors of optometry in the program, which would allow them to be able to compete, on a level playing field, for loan repayment and scholarship opportunities.

"A constant challenge facing graduate students is the ability to obtain and pay for the loans necessary for school," says Cherian, who recalls an AOA/AOSA listening session in May where students decried their deflating debt. "Students can often become stressed with the idea of loan repayments, especially considering the average new graduate earns around $96,000. This data is important for Congress to consider as the legislators work to reauthorize the HEA.

"If an increase in student loan debt isn't coupled with an increase in average salary, there will be an undue mental burden for new students entering the profession," he adds. "It can also decrease the number of quality individuals wanting to be optometrists but who are limited by their socioeconomic backgrounds. The AOSA exists to empower students to thrive as doctors of optometry and supporting the HEA and Protecting JOBs Act is one way the mission is addressed."

August 14, 2019

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