Apply Smarter & Borrow Better:
What you need to know about paying for veterinary school after July 1, 2026
Private Loans will be a critical component
Students starting veterinary school (or any professional program) after July 1, 2026, will be the first to experience new federal student loan borrowing constraints.
Veterinary school is expensive, often costing more than medical school and resulting in a total student loan balance greater than the average U.S. home mortgage. Yet, starting salaries for new veterinarians are significantly lower than many student loan balances at graduation.
Learn the New Federal Student Loan Borrowing Limits
If you begin your professional program after July 1, 2026, the amount of federal Direct Unsubsidized student loans you can borrow will be capped:
- Annual Limit (Professional School, i.e., veterinary school): $50,000
- Program Limit (Veterinary Degree): $200,000
- Lifetime Limit (All Federal Loans): $257,500
The Gap and the Risk: Many veterinary schools, particularly those charging non-resident (out-of-state) or private tuition rates, have a Cost of Attendance (COA) that exceeds the $50,000 annual limit based on tuition and fees alone.
Any costs beyond the new federal limits must be financed using additional funding sources, such as scholarships or grants, family or personal funds, or private student loans.
Caution: Direct Grad PLUS loans will no longer be available after July 1, 2026 for new borrowers. If your costs exceed the annual federal limits each year of school, then you will need to secure additional funds beyond the federal student loan limits each year.
Since federal loans are generally easier to obtain and more flexible during repayment, targeting schools with the lowest annual and total costs is the best way to minimize the need for private student loans.
Private Student Loan Basics
Private student loans are funds offered by banks, credit unions, or online lenders. Unlike federal loans, private loans are more difficult to obtain and manage during school and in repayment.
| Feature | Federal Direct Unsubsidized Loans for professional school | Private Student Loans |
|---|---|---|
| Credit Requirement | N/A: Credit history is not required for Direct Unsubsidized Loans | Your credit history and credit score determine your eligibility, interest rates, and terms. |
| Required Credit Score | N/A: Credit scores are not required for Direct Unsubsidized Loans | Minimum credit score typically between 640 – 660. |
| Co-signer | N/A: Direct Unsubsidized loans do not require a co-signer. Only the borrower is responsible for federal student loan repayment. | Often required if the student lacks a robust credit history. May also be required to obtain a better offer. Any co-signer can be responsible for repayment if the borrower is unable to pay. |
| Interest Rate | Fixed rate for the duration of the loan (e.g., 7.94% for the 2025-2026 academic year). | Likely higher than federal rates, even with a co-signer. Rates can be fixed or variable and may differ during school vs. after school. |
| Flexibility | High flexibility; no payments due during school; unpaid interest is not capitalized; eligible for Income-Driven Repayment (IDR), Public Service Loan Forgiveness (PSLF), beneficial deferment/forbearance during repayment; discharge provisions on death/disability. | Low to moderate flexibility; may require payments during school; interest may be capitalized during or after school; not eligible for federal IDR or PSLF. Typically have limited deferment/forbearance or death/disability provisions. |
Need more information on borrowing and repayment changes?
- Future Veterinary Student Loan Changes
- Changes to federal student loans come into focus now
- Recent Apply Smarter Webinar:
Steps for New Veterinary Students Who Need Private Student Loans
- Know Your Credit: If you anticipate needing private loans, you must know your credit score and history. Start by checking AnnualCreditReport.com to see your credit history. If you lack a credit history, you need to start building one, which can take at least six months. The Consumer Financial Protection Bureau also has some good background information on credit history and credit scores. Numerous paid and free services allow you to check your credit score. You may start with your bank or credit card provider to see if they offer a way to see your credit score.
- Prepare to have a co-signer: If your credit score is marginal or non-existent, a co-signer (a credit-worthy adult) will likely be necessary. This person becomes legally responsible for the private debt if you cannot make the required payments. You may consider having a backup co-signer available if your primary co-signer is unavailable or unable to help you obtain additional private student loan funding for additional veterinary school years.
- Shop Around: Because private loan terms differ among lenders, compare offers from multiple banks, credit unions, or online lenders before signing. You may need to shop around each year, depending on your needs and the school you attend. Start your comparison shopping early (as soon as you receive your acceptance notice) because you will have a short window between acceptance and your first tuition bill.
Critical Questions to Ask Your Private Lender
You must read the fine print carefully before signing any private loan offer, as the terms and conditions (aka promissory note) can be very different from lender to lender.
A. Private Loan Amount, Interest Rate, Fees, and Cost
| Question Category | Critical Questions | Details to Understand |
|---|---|---|
| Amount | Are there any guaranteed funding options for the duration of school, or do I need to reapply each year? Will your lender make it easy for you to get subsequent amounts? Will you still have the option to shop around between school years for better terms? | If you need private student loans each year, be sure you can easily obtain the required future amounts to complete your veterinary school program. |
| Timing | How much will you receive and when? | Typically, funds are distributed each semester. Will your private loan follow the same disbursement schedule as your federal student loans? |
| Interest | What is my interest rate? Is this a fixed or variable interest rate loan? | Private loan interest rates are likely to be higher than federal loan interest rates. Fixed rates remain unchanged for the life of the loan. A variable rate can change based on macroeconomic shifts, increasing your loan and payment risk. |
| Fees | Are there any origination, application, late payment, or pre-payment fees? | Be wary of origination fees or prepayment penalties, which can restrict your ability to pay the loan off early or cost you extra. |
B. Private Loan In-School Repayment and Interest Accumulation
Interest commonly begins accruing on student loans immediately. Understanding how interest is managed while you are a full-time student is vital, as interest accrual adds to your total balance and total repayment costs.
| Question Category | Critical Questions | Details to Understand |
|---|---|---|
| Repayment During School | What are my repayment options while I’m in school? | Options may include full monthly payments, interest-only payments, or deferment. |
| Interest Capitalization | What happens to my interest during school, and what is the frequency of interest capitalization? | Capitalization means the accrued interest is periodically added to the principal balance, increasing the size of your loan when repayment begins. The more frequently the capitalization occurs, the more costly your loan. |
| Total Balance | What is my expected balance when repayment begins? | This figure should account for all in-school interest accrual and any capitalized interest. |
C. Post-Graduation and Repayment
Private loan payments are typically calculated based on the amount borrowed, the interest rate, and the repayment term — they do not consider your income, even during an internship or residency.
| Question Category | Critical Questions | Details to Understand |
|---|---|---|
| Repayment Term | What is the loan term (duration of repayment after school)? | Shorter terms (e.g., 5 or 10 years) lead to higher monthly payments but less interest paid overall; longer terms (e.g., 15 or 20 years) have lower monthly payments but an increase in the total interest paid. |
| Grace Period | Is there a grace period after I graduate before I have to start making full payments? | Understand the length of this period and how interest is handled before your first payment is due. |
| Monthly Payment | What is my expected monthly minimum payment? When is my first payment due? | Your federal student loans will enter repayment 6 months after graduation. Make certain you know when your first private loan payment is due. |
| Advanced Training | Are there any deferment options for internships or residencies? | Since internships and residencies pay significantly lower wages than a typical starting salary, regular payments on private loans can be extremely difficult. |
| Co-signer Release | When am I eligible to release my co-signer from my loan(s), and what are the details for making this happen? | Some private lenders will allow you an option to release your co-signer after graduation. You’ll want to know how soon you can do that and the process, including details like potential interest rate or payment term changes. |
| Difficulty Repaying | What happens if I have trouble making payments? Are there any forbearance or deferment options? | Private loans are inconsistent. You need to know if the lender offers options to ease payments during periods of financial stress: changing jobs, maternity or paternity leave, etc. |
| Missed or late payments | What happens if I make a late payment or miss a payment? How much is a late fee? How long before they consider you to be delinquent or in default? | Federal student loans have a 10 to 15-day period after the due date when you can make a payment before penalties are assessed. Understand the consequences of late or missed payment on your private loan(s). |
Lost? Confused? We're Here to Help!
If you’re confused (it’s hard not to be right now), ask questions early and often. Waiting until your receive your tution statement will not be a good strategy.
Veterinary Students: You can ask questions on the Student Debt message board with your FREE VIN access.
Pre-veterinary Students who haven’t accepted a veterinary school seat: You can ask questions on the Apply Smarter message board with your FREE VIN Foundation access.
Posting on the message boards helps you to get answers to your questions and lets your colleagues learn from the exchange as well: Win-Win!
We look forward to helping in any way that we can!
If you have questions, reach out to [email protected].
Dr. Tony Bartels graduated in 2012 from the Colorado State University combined MBA/DVM program and is an employee of the Veterinary Information Network (VIN) and a VIN Foundation Board member. He and his wife have more than $400,000 in veterinary-school debt that they manage using federal income-driven repayment plans. By necessity (and now obsession), his professional activities include researching and speaking on veterinary-student debt, providing guidance to colleagues on loan-repayment strategies and contributing to VIN Foundation initiatives.