Extension of loans immediately after graduation is certainly an option. But there are several reasons I think it is a poor choice. I think everybody has different attitudes towards money and tolerance for debt. That being said, here are my reasons why I think the way I do:
1) You need to take into account inflation. 6% interest does not equate into a 6% increase in spending power the following year. take off 2 or 3 percent.
2) What happens when your student loan rates are 5%? Or 6%? This is certainly possible in the near future. Just as interest rates can tank, they can go up. Talk to some graduates from the last few decades paying higher percentages. We are at ridiculously low interest rates now and that can't last forever. (hopefully I am wrong!) Throw in inflation and you're going to have to make some nice investments to come out ahead.
3) Compounding on a huge student loan does most of it's damage when the balance is high. The opposite is true for your investments. You aren't going to be seeing huge increases in your initial investment till many years down the road towards your retirement years. I am not a CPA or particularly numbers savvy so I can't tell you when it is appropriate to put more money towards a legendary (albeit) historic 6to 8% return in stock market vs paying down your current loans. There is probably a tipping point there somewhere. I have recently become interested in this topic and if I can come up with some equations I will post. I am not advocating paying down your loans at the expense of all other investments.
4) Probably the kicker for me is this: student loan debt is non-forgiveable. That means you cannot declare bankruptcy and be free of them. Ever. They are with you for the rest of your life, like herpes. They will hang over you constantly and affect your decision-making. I cannot be sure of this but I believe I have seen that if you die your spouse then becomes responsible. Maybe someone can advise me on that.
5)We cannot be certain optometry in its current form will be around in 10,15,20 years. There are NO guarantees in life folks. And certainly not in business or medicine. What happens if the ground falls out and opticians gain refracting priveleges? That is a distinct possibility down the road. (we need to fight this tooth and nail) Optometry as a profession will never go away, but high demand and the job market may go away, and if that happens it is going to be musical chairs. Don't be the last one standing...
You cannot be "pie in the sky" when it comes to your financial security. Who's looking out for you? Nobody. You have to protect yourself and make smart decisions. "Most" of us I would bet don't want to be working for peanuts with 6 figure loans, or trying to retrain into another profession when we're 40, with 6 figure loans we can't unload. To me that doesn't make good sense. But I defer to those who are optomistic.
6) High student loan debt will make you unattractive in terms of obtaining loans. For your private practice, home, whatever. You are going to have to have a "reasonable debt load" in the eyes of the finance guys for them to think you can hack paying back all your debts.
For those who are eternal optomists, I salute you. This profession needs optomists! But I disagree that carrying a huge debt load for your first 10 to 15 years out of school is a good idea. You can't assume the current patterns will hold. I would advise paying down rapidly to a "reasonable" level, and THEN extending payment. Sacrifice early.
