Repay Wiser: 2019 New Veterinary Graduate Student Loan Playbook
Graduate, Consolidate, Get Started in Income-Driven Repayment
Congratulations, new veterinary doctors! It’s time to celebrate graduation! It’s also time to log in to NSLDS.ED.GOV, download your NSLDS file, use the VIN Foundation My Student Loans tool and Student Loan Repayment Simulator, and start a Federal Direct Consolidation Loan as soon as you can to save you time and money.
On Wednesday, May 29, 2019, VIN & VIN Foundation hosted a live webinar with Tony Bartels, DVM, MBA, to discuss why starting your student loan repayment plan ASAP is so beneficial and how to do it. If you were unable to attend, no worries — we have the information for you to review right here!
Utilize a Federal Direct Consolidation Loan
For those of you facing a student debt-to-income ratio greater than one (aka your total student debt balance exceeds your income), you’ll want to get started in income-driven repayment right away. However, there’s a small problem: you can’t get into income-driven repayment until your grace period expires. To solve this problem, start a Federal Direct Consolidation loan, waive your remaining grace period, choose your loan servicer, and apply for income-driven repayment. You can start the Federal Direct Consolidation Loan process at studentloans.gov.
Why should I waive my grace period?
For your veterinary school loans, the majority of your balance is accruing interest. You continue to accrue interest during the grace period too. When the grace period ends, your accrued interest will get added to your principal. This is called capitalization. You’ll then accumulate interest on that higher principal balance going forward. Shortening your grace period saves you money. You force capitalization to happen sooner which lowers your starting repayment balance and reduces your repayment costs.
Consolidating before you start your first job, internship, or residency can also help you obtain a $0/month minimum payment for the first 12 months of an income-driven repayment plan. Income-driven repayment uses a discretionary income formula to determine your minimum monthly payment. Taxable income is the primary input for discretionary income. If you do not have any taxable income when you complete the consolidation and income-driven repayment application, you won’t have a payment due for the first year of repayment. As an added benefit, you will start the clock ticking towards loan forgiveness as well as buy some time and flexibility as you get familiar with your post-graduation budget. This can help you get started in your new location, learn how to be a great veterinarian, start your personal financial wellness plan, and start working on a long-term loan repayment plan.
Still Not Sure?
The My Student Loans resource will help you make sense of your federal student loan portfolio. After you upload your NSLDS file, review your loan types, balances, weighted average interest rate, and income-driven repayment plan eligibility. Then you can send a summary of that information to the Student Loan Repayment Simulator where you can project your repayment costs based on your income and family inputs.
We’re here to help!
Please feel free to reach out with any questions: firstname.lastname@example.org. VIN Foundation is here to help with understanding your student loans and repayment options now or in the future!