A Proposal by the President…How it Affects Student Debt
Kim Ziemnik, Chair, Federal Loan Legislative Action Committee

What is the issue at hand?

In February of this year, the President proposed two things for the 2006 fiscal year budget that would affect all of us optometry students tremendously.

1. To dissolve the Federal Perkins Loan Program
2. To cut the FWS Program by approximately $42 million

If these two programs are cut, students will be even more overwhelmed by debt. They will be forced to cover the loss of Perkins and some FWS money by borrowing from high-cost alternative sources, such as credit cards or private education loans. Unfortunately, these options come with high interest rates. For more information on Perkins Loans, refer to “How Am I Paying for My Education” article.

What are the ultimate effects of the proposal?

Well…graduating ODs, saddled by large debt, may be discouraged from pursuing underserved areas and providing for underprivileged people. New ODs would be less able to participate in Medicaid and other community beneficial programs, as these programs are low in generating profit and the doctor must focus on paying off exorbitant student debt. Eventually, this could lead to an imbalance in the distribution of eye care services, creating a lack of adequate care for the lower income population. In the end, young, bright, yet financially needy students may become discouraged from pursuing optometry or other professional studies due to the extreme cost of higher education.

What is the point of this proposal?

Supposedly, by eliminating the Perkins program, all remaining money would then be absorbed by the Federal Government and redirected into the Pell Grant Program. Unfortunately, optometry students, along with other graduate students, are not even eligible for the Pell grant. It is solely for very low-income undergraduate students.

How has the AOSA responded?

In response to the President's proposal, our national AOSA President, Al Licup, has formed an ad-hoc committee to stand up for our student members. The Federal Loan Legislative Action Committee consists of four people:

• Kim Ziemnik, Chair (AOSA VP)
• Tim Wilson (ASCO NL)
• Mike Criswell (AOA-PAC NL)
• Beth Harper (SUNY Trustee)

What is this committee going to do?

We have three main goals as a committee:

1. To prevent the dissolution of the Perkins Loan Program and to curb reductions in the FWS Program
2. To lobby toward increased deductibility of student loan interest
3. To work toward increasing the $8,500 cap on Federal Subsidized Loans

What do you mean by “increased deductibility”?

Upon graduation, a student will begin repaying loans to the lender with interest. You may claim the interest paid, up to $2,500 as a deduction on your annual taxes. However, the deduction starts to phase out after your modified adjusted gross income reaches $100,000 (married) or $50,000 (single). And the deduction isn't available at all when your income is over $130,000 (married) or $65,000 (single). Fortunately, the starting salary for ODs is typically $65,000 or more upon graduation, so we are making a living. But we do need to pay off those loans. Unfortunately, the starting salary for ODs is typically $65,000 or more upon graduation, so frequently we do not qualify for the deduction.

What do you mean by “$8,500 cap” on Federal Subsidized Loans?

As was stated previously, this is an excellent loan because interest does not accrue until the student graduates. What's crazy about this limit is that the cap has been in place for 13 years!! In 1987 it was $5,000, rose to $7,500 in 1988, and rose to the current limit in 1992. The cost of living and tuition has increased steadily over the past 13 years. Why hasn't this loan risen to match the natural and expected inflation?

How are you going to reach these goals?

Our actions include joining forces, communicating with Legislators, and having all students get involved.

1. Joining Forces — We know that debt issues do not just affect Optometry; they affect other graduate and professional programs as well. Therefore, we have contacted the presidents of other student health profession organizations. Our first round of letters was sent to the American Medical Association-Medical Student Section (AMA-MSS), the American Bar Association-Law Student Division (ABA-LSD), the American Student Dental Association (ASDA), and the Student American Veterinary Medical Association (SAVMA). We have had positive feedback from all of these organizations. We are currently in the process of identifying common goals and drafting a joint letter to send to Legislators. We plan to have a combined effort day on Capitol Hill.
   
   
2. Communicating with Legislators — As far as communicating with Legislators, we have sent out several letters of support to the sponsors of pro-student legislation. We plan to send out letters asking for additional support of this legislation.
   
   
3. Student Involvement — We need all the help of ALL optometry students. About a month ago, a couple of capwiz letters were sent out to all students for them to cut and paste to their local representatives. The bigger volume that we achieve, the more effective we will be. We plan to have all of this information available and easily accessed on the AOSA website as www.theaosa.org in the near future.

Are we on our own in this fight?

No, absolutely not! We should take the time to thank ASCO and AOA-PAC for laying the groundwork for AOSA. They helped AOSA to identify the current legislation addressing student indebtedness! And, of course, the AOA is constantly out there lobbying to protect and promote the profession of Optometry. There are three legislative issues that they have tackled that directly impact the AOSA.

1. The AOA has requested that the Senate Appropriations Committee include Optometrists in the National Health Service Corps Student Loan Repayment Program, which would result in the expanded accessibility of eye care in rural and underserved urban communities. In return for their services, students would receive loan repayment up to $50,000.
   
   
2. The AOA urged Congress to maintain fixed rate loan consolidation and to support continuation and improvement of Higher Education Act programs such as loan consolidation, Stafford Loans, and the Perkins Loan Program.
   
   
3. The AOA and ASCO are advocates of eliminating the previously discussed caps on deductions.

What can students do to help?

• Promote the AOSA's lobbying efforts.
• Encourage fellow students to get involved with local lobbying efforts.
• Hold information sessions for your students with your Local AOA-PAC representative.
• Send capwiz letters of your own.
• Talk with your Legislators. We all know that this is the most effective route.