Veterinary student loan debt is an inevitable part of the educational journey for many college students, particularly those who pursue advanced-level degrees.
On the whole, student loan debt impacts nearly 44 million borrowers and accounts for more than $1.5 trillion in money owed. This can present a significant financial burden for borrowers over the course of 10, 20, or even 30 years.
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However, students who study veterinary medicine face even greater challenges in managing student loan debt over time. The average student loan debt for veterinarians is $143,757, but this number may be as high as $167,534 when students who have zero debt are taken out of the equation.
The reality is that more than 20 percent of veterinary students owe more than $200,000 for their education, creating a pressing need to plan for repayment over the long term. For those who are interested in studying veterinary medicine in college, it is crucial to evaluate the methods for covering the cost of tuition for several years, including alternatives to traditional student loan debt.
Paying Back Student Loan Debt for Veterinarians
Paying off student loans looks different for each veterinary student, but broadly speaking, borrowers have several options for structuring repayment through either federal or private sources. With federal student loans, veterinary debt is repaid directly through a loan servicer, and interest rates, and repayment options are dictated by the federal government.
With private veterinary debt, borrowers work with their lender or servicer to structure repayment, typically selected at the time the loan is approved. Interest rates and repayment options are dictated by the specific lender the loans were funded through.
In addition to these standard repayment options, veterinary students may also have access to the following repayment and loan forgiveness programs.
- Veterinary Medicine Loan Repayment Program
- Army Active Duty Health Professions Loan Repayment Program
- F. Edward Hebert Armed Forces Health Professions Scholarship Program (HPSP)
- Faculty Loan Repayment Program
- Veterinary Student Loan Repayment Programs Offered by State
Veterinary Medicine Loan Repayment Program
Under this program, veterinary student loan borrowers may receive up to $25,000 per year, up to three years, to help pay off veterinary student loan debt. To be eligible for this program, veterinary graduates must agree to work at least three years in an area where there is a vet shortage. The program is run by the Department of Agriculture and is limited in how many borrowers are accepted each year. Borrowers must have a Doctor of Veterinary Medicine degree and qualifying student loan debt.
Army Active Duty Health Professions Loan Repayment Program
Under this program, the US Army assists veterinarians with paying down student loans for active duty and reserve service members. Active duty veterinary students can receive up to $120,000 over three years, while reservists may receive up to $50,000 over the same period.
F. Edward Hebert Armed Forces Health Professions Scholarship Program (HPSP)
Certain students may qualify for the Health Professions Scholarship Programto receive full tuition for an accredited veterinary degree program. There is also a monthly stipend paid of at least $2,000 to help cover ancillary expenses. Students do have an active duty service requirement of one year for each year the scholarship is received.
Faculty Loan Repayment Program
Under this program, veterinary graduates who agree to teach at an accredited health professions college or university may be eligible for up to $40,000 of veterinary debt repayment. Borrowers qualify if they come from a disadvantaged background and have earned an eligible degree.
Veterinary Student Loan Repayment Programs Offered by State
There are several state-focused repayment programs offered to veterinary graduates based on resident status, the college or university attended, and the location of their job after graduation. The amounts and qualification requirements vary greatly across state-specific programs.
Additional Options for Repaying Veterinary Student Loan Debt
In addition to the special programs listed above, veterinary students with debt may pursue other options for repayment that ease the financial burden over time. These options include public service loan forgiveness and income-driven repayment plans.
Public Service Loan Forgiveness (PSLF)
The federal government offers the Public Service Loan Forgiveness program to eligible students who have made 120 qualifying payments under a qualifying repayment plan. To be eligible for PSLF, borrowers must work for a qualifying employer, which includes a government organization on any level, a not-for-profit organization that is tax-exempt, or other not-for-profit organizations that are not tax-exempt but offer public services. Once loans are forgiven, no additional repayment is needed.
Income-Driven Repayment Plans
Veterinary student loan borrowers with federal student loan debt may also qualify for an income-driven repayment plan. Eligible loan payments are adjusted after applying for an income-driven repayment plan, calculated based on the borrower’s income and family size. These repayment plans can increase the total amount of repayment over time, but borrowers may also be eligible for forgiveness of a remaining balance after several years of on-time, qualifying payments.
Finally, veterinary student loan debt may be restructured through student loan refinancing with a private lender. Through the refinancing process, vet students who qualify based on credit history and income requirements can secure a new, single loan through a private lender to pay off other private loans or federal student loans.
The benefits of refinancing include the possibility of a lower interest rate, shorter or extended repayment terms, and easier management of loan repayment with a single obligation each month.
Although refinancing may be a viable option for some with veterinary debt, there are caveats to consider. Refinancing with a private lender takes away often valuable benefits of federal student loans, including the possibility for student loan forgiveness, income-driven repayment plans, and forbearance and deferment protections.
Additionally, students with veterinary loan debt may not qualify for a new private loan alone, meaning a co-signer is required for approval. Each of these considerations should be thought through carefully before deciding whether refinancing of veterinary debt is the best choice.
Paying for Veterinary School
Students planning to attend veterinary school need to take the time to evaluate their potential expenses for earning this degree well before they enter a program.
This starts with research about the cost of veterinary school from different colleges and universities. Each school should provide an estimate of the cost of completing a veterinary program either online or through direct contact with the financial aid office.
Information gathered from this process is most valuable when it includes all relevant expenses, including tuition (and the difference between in-state and out-of-state costs), room and board, books, and other costs required to earn a degree. If you’re having trouble determining the total cost of attendance, the veterinary school cost comparison tool offered through the Association of American Veterinary Medical Colleges can be an invaluable resource.
Once this information has been collected from a handful of prospective schools, students still interested in earning a veterinary degree need to determine what strategies are available for reducing the total cost of attendance. This may sound daunting, but here are a few easy ways to tackle this challenge:
Apply for Scholarships
Prospective veterinary students may have the opportunity to significantly reduce their out-of-pocket expenses for earning a vet degree with the help of scholarship dollars. A scholarship, unlike a student loan, has no requirement of repayment, and there are several award opportunities available for vet students from private and public sources. Scholarship research takes time and patience and some can be highly competitive. For these reasons, it is suggested that potential veterinary students find and apply for several scholarships to help offset the total cost of their degree.
Become an In-State Resident
In conducting research about the total cost of earning a vet degree, many students quickly recognize the difference between in-state and out-of-state tuition rates, with out-of-state costs being far higher. To combat this difference in cost, prospective students may consider their ability to become an in-state resident prior to starting their veterinary degree program. Some schools also offer the option to obtain residency status while attending school, which can reduce tuition costs over time. In either scenario, out-of-state students may be able to reduce their veterinary debt by $30,000 over the course of their degree program.
Student Loan Options for Veterinary Students
When becoming an in-state resident or finding scholarship funds is not enough to reduce the total cost of attending veterinary school, many students turn to student loan debt to make up the difference. Student loans for veterinary students come in many forms, so it is necessary to understand the ins and outs of each type before accepting loan funds for school. Here is a brief breakdown of the loan types for vet students:
Federal Direct Loans
Federal Direct Loans, like Stafford loans, are guaranteed loan funds available to any veterinary student, regardless of financial need. This type of loan is available for up to $20,500 per year for graduate-level students, with a total of $138,500 over the course of a degree program. These loans are funded through the Department of Education and applied for through the Free Application for Federal Student Aid (FAFSA).
Federal Direct Grad PLUS Loans
Another Department of Education loan option for vet students is the Grad PLUS loan. These loans are available to students, even with bad credit, so long as they do not have significant negative marks on their credit report. Grad PLUS loans are available up to the total cost of attendance, less any other financial aid received.
Health Professional Loans
Some students may be eligible for health professional loans through the specific school they attend. These loans are need-based and highly competitive, and they may have more favorable loan repayment terms and interest rates for students who plan to work in an underserved area after graduation.
Private Student Loans
When federal loans are not enough to cover the full cost of attendance, veterinary students may also apply for private student loans. These loans are offered by private lenders like banks, credit unions, and online lenders, and qualification is based on the credit strength of the borrower among other factors.
Author: Melissa Horton
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