Calling all associate veterinarians
- Determine your IDR plan eligibility using the VIN Foundation My Student Loans tool
- Compare your minimum payment due using an IDR to what you’re paying now
- Run loan simulations at the VIN Foundation Student Loan Repayment Simulator
- Minimize your loan repayment costs, Maximize your monthly cash flow
- Negotiate the best compensation benefits for your situation
Calling all veterinary employers
- Get knowledgeable about federal student loans and IDR at the VIN Foundation Student Debt Center
- Will a direct student loan contribution reduce your associates total repayment costs?
- Consider the tax implications and logistics of a direct student loan contribution
- Are there other compensation benefits that will result in a larger value to you and your associate than a student loan contribution?
- Cater a plan that matches both your and your associates’ financial goals
- Employer payments applied directly to student loan accounts increase the borrower’s taxable income.
- Higher taxable income increases the minimum payment due under IDR plans. The more paid per month, the more the borrower pays in total.
- Payments made above the minimum payment due under IDR, unless they can be applied to principal or count as part of the minimum monthly payment due, result in more money paid in total than required under IDR.
- Additional payments made on student loans that go only toward unpaid interest will reduce the amount forgiven. However, for a borrower using an IDR plan known as REPAYE, the additional monthly contribution may negate some or all of a monthly unpaid interest subsidy available under the plan, thereby reducing the value of the contribution.
- Under IDR, loans are forgiven after 20 to 25 years of payments. The amount forgiven is taxable. If the goal of an employer contribution is to reduce the employee’s tax liability, then the benefit from a $150 monthly contribution is $45 ( assuming a tax rate of 30 percent on loan forgiveness). Over 20 years, $36,000 of employer-paid student loan payments translates to a reduction of $10,800 in total repayment costs for a borrower who reaches forgiveness — not a very good return on those funds.
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.