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Veterinary student debt

VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | Aspiring Veterinarians Apply Smarter

For the Aspiring Veterinarian – Apply Smarter!

Veterinary medicine is experiencing a student debt crisis. Yes, many higher education graduates experience loan repayment hardship; however the magnitude affecting recent veterinary graduates is unique.  Every day I counsel pending and recent graduates through the Veterinary Information Network (VIN) and via VIN Foundation who report student debt balances in excess of $200,000, $300,000 and $400,000 with incomes between $70,000 and $90,000 depending on where they choose to live and what type of veterinary medicine they are pursuing.  

 

While we can help veterinarians navigate these repayment challenges, the old adage “an ounce of prevention is worth a pound of cure” is a significant part of the solution.  A key driver of the crisis is the decreasing availability of discounted tuition seats for veterinary school; those seats that allow you to pay an in-state or otherwise discounted tuition rate.

 

We’re knocking on the door of another veterinary school application cycle.  The Veterinary Medical College Application Service (VMCAS) for the veterinary class starting in Fall 2020 is now open.  As you apply for veterinary school this year or beyond, Apply Smarter!

Did you miss the recent Apply Smarter?

 

Visit the Apply Smarter page on the VIN Foundation Vet School Bound website for the webinar recording and additional Apply Smarter resources.

What is “Apply Smarter”?

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VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | You Want to be a veterinarian? Apply Smarter!

Apply Smarter Webinar in Collaboration with SDN and APVMA

VIN Foundation announces pre-veterinary school webinar in collaboration with Student Doctor Network and the American Pre-Veterinary Medical Association

 

Free webinar helps hopeful pre-veterinary students apply smarter to veterinary school, improve their chances and save thousands in student debt

 

Davis, CA: The VIN Foundation, a 501(c)(3) nonprofit providing tools and resources to support veterinary students and veterinarians throughout their careers, is excited to announce an educational webinar on strategies for applying to veterinary school and minimizing student debt for pre-veterinary students. In collaboration with the Student Doctor Network (SDN) and the American Pre-Veterinary Medical Association (APVMA), the webinar will be held Wednesday, August 7, 2019, 5pm PT / 8pm ET. Interested attendees can register using the Apply Smarter registration link.

 

A veterinary degree can cost as much as or more than a medical school degree and more than the average U.S. home mortgage. However, starting veterinary salaries are about ½ to ⅓ of what a new physician can earn.

 

In an effort to save future veterinarians years of heartache and financial stress, the Apply Smarter webinar will help pre-veterinary students narrow their target list of schools to those where they have the best odds of acceptance and also save them hundreds of thousands of dollars in student loan debt.

 

“Educating pre-veterinary students on the wide range of veterinary school costs and student loan impacts prior to applications is vital to helping them make educated decisions and reducing the financial stress we see with many new graduate veterinarians,” said student debt educator and VIN Foundation board member Tony Bartels, DMV, MBA. “By collaborating with SDN and APVMA we are bringing together organizations on the forefront of educating pre-veterinary students and the future of the veterinary profession.”

 

“Student Doctor Network is excited to partner with VIN Foundation and the APVMA,” said Student Doctor Executive Director, Laura Turner. “We share their passion for helping pre-veterinary students with free resources to aid in their application process.”

 

“APVMA is excited to partner with the VIN Foundation and Student Doctor Network,” stated APVMA Vice President Ian Brown. “We’re looking forward to informing future veterinary students on smart ways on applying to veterinary school and how to save an extra penny in the process!”

 

Those who register for the Apply Smarter Webinar will be kept up to date on student debt and application information for veterinary school. They will also receive a recording of the webinar and the ability to ask further veterinary school application and student debt questions.

 

 

About the VIN Foundation

The VIN Foundation was created by members of the Veterinary Information Network (VIN) in 2005. VIN is an online community of veterinarians and veterinary students with over 70,000 members worldwide. Learn more about the VIN Foundation and its resources at https://VINFoundation.org. The VIN Foundation, a platinum level nonprofit, is made possible through generous gifts by individual donors and grants; all gifts made to the VIN Foundation are tax deductible.

 

About Student Doctor Network

Student Doctor Network (SDN) brings together thousands of current and future healthcare students and professionals into one community where they can share information, offer guidance, and provide encouragement to their peers and those coming up behind them. Whether considering a gap year, struggling with the intensity of their classes, or navigating the Match, members can find someone who understands what they’re facing.

 

About American Pre-Veterinary Medical Association

The American Pre-Veterinary Medical Association (APVMA) is a national organization of students. Our goal is to promote and stimulate interest in the field of veterinary medicine, provide open communication between pre-veterinary clubs and organizations nationally, provide resources to students on pursuing the field of veterinary medicine, and hold the annual national APVMA symposium.

VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | How Income-Driven Repayment Works: The Rules

How Income-Driven Repayment Works: The Rules

“I was looking at the income-driven repayment plans, and the Pay As You Earn (PAYE) option seems like it will cost me the least amount of money. However, everything I read online says that the income-driven repayment plans cost you more money because although they lower your monthly payment, you ultimately pay more interest in the long run. I was wondering if you could break this down for me? I don’t understand how it will cost me the least amount of money if I never hit the principal balance and pay more interest?”

 

This question, asked by a 2019 veterinary graduate who attended the recent new graduate webinar we presented on student debt,  is one of the most confounding aspects of income-driven repayment (IDR). Unfortunately, this confusion often prevents veterinarians from accepting the student loan repayment relief and other benefits provided by an income-driven repayment strategy.  

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VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | How Income-Driven Repayment Works: The Math

How Income-Driven Repayment Works: The Math

“I was looking at the income-driven repayment plans, and the Pay As You Earn (PAYE) option seems like it will cost me the least amount of money. However, everything I read online says that the income-driven repayment plans cost you more money because although they lower your monthly payment, you ultimately pay more interest in the long run. I was wondering if you could break this down for me? I don’t understand how it will cost me the least amount of money if I never hit the principal balance and pay more interest?”

 

This question, asked by a 2019 veterinary graduate who attended the recent new graduate webinar we presented on student debt,  is one of the most confounding aspects of income-driven repayment (IDR). Unfortunately, this confusion often prevents veterinarians from accepting the student loan repayment relief and other benefits provided by an income-driven repayment strategy.  

 

We covered how income-driven repayment (IDR) works and broke down the conceptual aspect of this question in How Income-Driven Repayment Works post.  Now we’re going to put those concepts into practice.

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New Grad Student Loan Questions and Answers: Income-Driven Repayment (PAYE, REPAYE, IBR)

Here are some questions about Income-Driven Repayment (IDR) that we tackled live during the 2019 New Veterinary Graduate Student Loan Repayment Webinar.

“Do we have to select a repayment plan every year or will we stay in the first one by default?”

 

If you do not select any repayment plan you will be placed in the standard 10-year repayment plan by default after your grace period expires. Your monthly payment will be calculated based on your starting repayment principal, interest rate, and the amount needed to pay each loan to zero in 120 months (10 years).

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New Grad Student Loan Questions and Answers: Consolidation

Here are some questions about consolidation using a Federal Direct Consolidation Loan that we tackled live during the 2019 New Veterinary Graduate Student Loan Repayment Webinar.

“How do we know if our student loans are able to be consolidated?”

 

To receive a Direct Consolidation Loan, you must include at least one Direct or Federal Family Education Loans (FFEL) program loan in the consolidation*.

 

Your Direct and/or FFEL program loans need only be in their grace period, deferment, or repayment in order to include them in a Federal Direct Consolidation Loan.

 

Your Direct Unsubsidized veterinary school loans should enter their grace period shortly after your last semester ends or after graduation. I wish I knew the rhyme or reason for each school’s timing on the loan status switch, but it’s highly variable. Some schools switch over quickly and some even a few days before graduation.  Others can take a few weeks or even a month to reflect your graduation status.

 

The NSLDS is usually updated at least monthly, so you might see your status update with the change of the month following your graduation. You might even call your school financial aid office after graduation to see when they might report your graduation status to the Department of Education.  Sometimes that request can nudge your school into updating your status or reporting your status change earlier.

 

*Special Note: If you were to only have Perkins, Health Professions Student Loans, or Loans for Disadvantaged Students, you would be able to utilize a Direct Consolidation Loan.  I regularly meet a handful of veterinary students who fall into this category — the good news is that your loan balances in those cases are relatively low and have not been costing you interest during school so you’re in great shape to pay those back without having to consolidate.

“Can you consolidate after the grace period?”

 

Yes.  But, the timing of your Federal Direct Consolidation is important.

 

Your Direct Loans and/or Federal Family Education Loans (FFEL) need only be in their grace period, deferment, or repayment in order to include them in a Federal Direct Consolidation Loan.  

 

There are a couple of issues with waiting until your veterinary school loan grace period expires to start the Direct Consolidation Loan:

 

1. You continue to accrue interest on all of your unsubsidized loans during the grace period.  Thus, when you do enter repayment or consolidate later, the increased unpaid interest balance will be added to your principal resulting in a higher starting repayment balance.  You are charged interest on your principal — the higher your principal, the more you’ll pay during repayment.

 

2. The Direct Consolidation Loan takes 30-60 days to process.  Once processed your first payment will be due 30 days after that. If you wait until after your grace period, there is nearly 9 months of time that you are not in repayment, thus not making qualifying payments towards forgiveness.  Better to get the clock ticking, especially if you anticipate having a balance forgiven under an income-driven repayment plan.

“Can you consolidate and waive your grace period if you’re planning to do Public Service Loan Forgiveness (PSLF)?”

 

You can and you should, especially if you’re starting a PSLF qualifying employment soon after graduation.

 

In order to make qualifying PSLF payments, you have to be 1) in repayment using an income-driven repayment plan, 2) paying federal Direct Loans on-time, and 3) employed full-time (average of 30 hours per week) with a qualifying employer. 

 

The sooner you can get most or all of your federal student loans consolidated into a Direct Consolidation Loan, the sooner you can officially start making payments using an income-driven repayment plan, which are 2 of the 3 primary requirements for working towards PSLF.  And if you can get the $0/mo payment due for the first 12 months of repayment, you’ll have more of your loans forgiven when you reach PSLF.

 

Per the PSLF Employment Certification Form, “A qualifying employer includes the government, a not-for-profit organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code, or a private not-for-profit organization that provides certain public services. Serving in an AmeriCorps or Peace Corps position is also qualifying employment.”

 

I would recommend bringing a PSLF Employment Certification Form to your employer after you’ve started working with them and made a few monthly payments towards your student loans.  Repeat that process each year so you have 9 or 10 of those certification forms to submit with your actual application for PSLF.

 

After you’ve made 120 of those qualifying PSLF payments, you should have an easier time (in theory) having your remaining student loan balance forgiven tax-free if you have all of your employment certification forms documenting your progress along the way.

“My Perkins Loans, Health Professions Student Loan, and Loans for Disadvantaged Students aren’t listed as eligible under income-driven repayment. Can I consolidate them in order to pay them using PAYE, REPAYE or IBR?”

 

Yes, you can consolidate those non-Direct loan types as long as you are including one Direct or FFEL program loan in the consolidation. That is one of the primary reasons to utilize a federal Direct Consolidation Loan — to include non-Direct federal student loan types that do not qualify for income-driven repayment (IDR) on their own, but will once you consolidate them.

 

The most beneficial income-driven repayment plans (PAYE, REPAYE, IBR) and Public Service Loan Forgiveness (PSLF) can only be used with Federal Direct Loans. The only way to make federal non-Direct Loan types qualify for IDR and PSLF is through a Direct Consolidation Loan and the best time to consolidate your loans is as soon as you can after you graduate veterinary school.

“Can you do Federal Direct Consolidation once you have started payments on an income-driven repayment plan?”

 

You can.  However, if you are already in repayment, you should be extremely careful using a Direct Consolidation Loan.  This is why the timing of your Federal Direct Consolidation Loan is so important.

 

When you consolidate, you receive a new loan(s) that pays off all of the loans included in the consolidation.  If you have made qualifying income-driven payments or PSLF payments to loans that you consolidate, you will lose credit for those qualifying payments.  Essentially, you reset your forgiveness clock on any loan you consolidate. That is another reason to start the Direct Consolidation Loan process as early as possible, ideally right after you graduate veterinary school.

“Should I consolidate my spouse’s federal student loans with mine?”

 

You can no longer combine federal student loans with your spouse as part of a federal consolidation loan.  That is likely a good thing because it is a mess to deal with in the event of separation/divorce.

 

You could probably still do a consolidation with your spouse using a private loan, but for many other reasons in addition to the fact it would still be a mess in the event of separation/divorce, I would highly discourage consolidating your student loans with your spouse’s student loans.

Have more questions? Post a comment below or email studentdebt@VINFoundation.org.

VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | 2019 New Veterinary Graduate Student Loan Playbook

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!

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VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | Veterinary School Student loan Interest Rates for 2019-20 Academic Year Decreasing

Lower Student Loan Interest Rates for 2019

Rarely do we get good news when it comes to student debt. But interest rates for the federal student loans you borrow for the 2019-20 veterinary school academic will be lower than last year.

Interest rates are updated each year using the high yield of the May U.S. 10-year treasury note.  The high yield plus a factor for your Direct loan and school type sets the fixed rate you pay for the life of those loans received between this July 1st and next June 30th. As a veterinary student, the graduate/professional school Direct Unsubsidized loan interest rate will be 6.08%, down from 6.6% this past year. The Direct Graduate Plus loan rate will be 7.08%, down from 7.6% this past year.

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VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | Student Loan Forgiveness: Taxable or Tax-Free? Either way, It’s a Blessing

Student Loan Forgiveness: Taxable or Tax-Free?

Paying back a veterinary school student debt load can be extremely stressful and confusing.  Analyzing the various federal repayment options and programs and choosing the best for your situation is challenging.  Spending nearly the last ten years helping to educate veterinary students, veterinarians, and those who work with them navigate their student loans and repayment options, I’ve seen student loan forgiveness cause significant confusion.

 

Public Service Loan Forgiveness:

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VIN Foundation | Supporting veterinarians to cultivate a healthy animal community | Blog | Top 5 Mistakes Made by Veterinarians Using Income-driven Repayment

Top 5 Mistakes Made by Veterinarians Using Income-driven Repayment

The below piece was originally published as a guest post on Financial Wellness DVM

 


 

Repaying student loans is stressful and complicated.  For recent graduate veterinarians, high student loan balances coupled with starting salaries lower than their student debt total are the norm.  Depending on the school you attended or the practice type and region where you’re working, your student debt to income ratio is often two or greater.  Once your student debt to income ratio gets above one, traditional repayment plans and strategies are financially risky, inflexible, and often more costly.

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