Listen in as Executive Director Jordan benShea chats with student debt expert and VIN Foundation Board Member Dr. Tony Bartels about the latest big news. Tony covers what we know now about the student debt relief program, and what questions we still need answered. Tony also discusses what you should do now before the payment pause extension expires after December 31, 2022, and shares his thoughts on the new income-driven repayment plan. As always, we want to hear from YOU. Please share your thoughts by sending an email or joining the conversation.
GUEST BIO:
Dr. Tony Bartels
Tony Bartels, DVM, MBA graduated in 2012 from the Colorado State University combined MBA/DVM program and is a VIN Foundation Board Member and Student Debt Expert, and an employee of the Veterinary Information Network (VIN). He and his wife, a small-animal internal medicine specialist practicing in Denver, 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 resources. Beyond debt, his professional interests include small- and exotic-animal practice. When he’s not staring holes into his colleagues’ student-loan data, Tony enjoys fly fishing, ice hockey, camping and exploring Colorado with his wife, Audra, daughter, Lucy and their two rescued canines, Addi and Maggie.
LINKS AND INFORMATION:
- Department of Education press release
- StudentAid.gov
- VIN Foundation Blog post
- VIN Foundation Student Debt Center
- Check your current student loan details — VIN Foundation My Student Loans tool
- Get student loan help
- VIN Foundation WikiDebt
- VIN Foundation Webinars
- Student Aid Data File, Consolidation
- Student Loan Repayment Restart webinar recording
Stay up to date with VIN Foundation updates: https://vinfoundation.org/updates/
Email VIN Foundation: [email protected]
Get updates to stay tuned for the VIN Foundation webinars on student debt. You may learn more about the VIN Foundation, on the website, or join the conversation on Facebook, Instagram, or Twitter. If you like this podcast, we would appreciate it if you follow and share. As always, we welcome feedback. If you have an idea for a podcast episode, we’d love to hear it!
TRANSCRIPT
Intro
Tony Bartels, DVM, MBA: Not everybody just automatically gets this. I mean, one of the biggest things that we all have been introduced to since the pandemic forbearance benefits were put in place in 2020 is this concept of federally held student loans. And we’ve all been just rudely reminded how confusing the student loan system has been since its inception. And, you know, you think you have federal student loans, but they might not be the right type of federal student loans, or you’ve got a mixture of federal student loans and private student loans. I mean, just in the counseling that we’ve provided to veterinarians and veterinary students over the last 10 years, I mean it’s amazing how complex people’s student loan portfolios can be.
Welcome to the Veterinary Pulse Podcast
Jordan Benshea: That is student debt expert and VIN Foundation board member, Dr. Tony Bartels, and this is the VIN Foundation’s Veterinary Pulse podcast, Special Student Debt series. I’m Jordan Benshea, Executive Director of the VIN foundation. Join me as I talk with veterinary colleagues about critical topics and share stories. Stories that connect us as humans, as animals, as a veterinary community. This podcast is made possible by individuals like you who donate to the VIN Foundation. Thank you. Please check the Episode Notes for bios, links, and information mentioned.
Latest Student Loan Updates
Jordan Benshea: All right, we are back again with another episode of our Student Debt series. And we are here with VIN Foundation board member and student debt expert, Dr. Tony Bartels to talk about the latest in student loans. Welcome, Tony.
Tony Bartels, DVM, MBA: Yeah, I mean, this is becoming every four months, three months. I mean, it seems like we get a dump of new information that we have to distill for everyone. So, it’s that time again.
Jordan Benshea: Yeah, and this, you know, this is probably the biggest news yet since the beginning of COVID when they announced a pause, right? I mean, this one has been threatened for quite a while now. So let’s dive right in.
Details on Biden’s Student Debt Announcement
Jordan Benshea: And two days ago on Wednesday, President Biden made a huge student debt announcement. And really one that he’s been talking about for a while, everyone’s been asking about, but will you share with our audience the announcement?
Tony Bartels, DVM, MBA: Sure, you know it was this one and in addition to the announcement that was made earlier this year in April, are probably the two most consequential. And of course, this one got some huge headlines, because we all learned that pretty much anyone with federally held student loans would be eligible for up to $20,000 of cancellation. Now, there’s some limits on that, right? And because the cancellation is targeted mostly towards lower income, middle income families, there are some income limits on there.
Eligibility and Impact of Loan Cancellation
Tony Bartels, DVM, MBA: Individuals that are earning less than 125,000 or households that are earning under 250,000 would be eligible for up to $20,000 of loan cancellation.
Jordan Benshea: Right. And this is, I mean, we’ve been hearing about people wanting President Biden to cancel debt, cancel debt, cancel debt. Is this what we thought it was going to be? Did we, you know, do you think that people are, it seems like, what we’re hearing is that some people are not happy, because it’s not enough and other people feel like it’s too much, right? You can never win.
Tony Bartels, DVM, MBA: Of course and I guess that means that you’ve done a pretty good job. If you piss off people on both sides, you’re probably doing the right thing. It’s the amounts. When it comes to veterinarians, the amount of whether it’s $10,000 or $20,000 that you’re eligible for to be canceled are not necessarily appreciable right now. You know, for folks that have been in repayment for 20, 30 years, I mean, they’re going to have a bigger impact here. Because they generally have less student loan remaining. This will help to accelerate, you know, the elimination of that student debt. But for our recent grads, anybody that’s graduated in the last 10 years or so, this is really not appreciably going to reduce student loans for most veterinarians. But at the same time, you know, if you can get $10,000 or $20,000 of your balance knocked off, you know, what’s the old saying, don’t look a gift horse in the mouth.
Jordan Benshea: Right. It’s still $20,000.
Tony Bartels, DVM, MBA: That’s really the most important part that I want to talk about is making sure that you’re in a position to take advantage of it. Because not everybody just automatically gets this.
Understanding Your Student Loans
Tony Bartels, DVM, MBA: I mean, one of the biggest things that we all have been introduced to since the pandemic forbearance benefits were put in place in 2020 is this concept of federally held student loans. And we’ve all been just rudely reminded how confusing the student loan system has been since its inception. And, you know, you think you have federal student loans, but they might not be the right type of federal student loans, or you’ve got a mixture of federal student loans and private student loans. I mean, just in the counseling that we’ve provided to veterinarians and veterinary students over the last 10 years, I mean it’s amazing how complex people’s student loan portfolios can be. And the announcements really hinge on you being able to know whether or not you have the right types of student loans that will benefit from all of these goodies that have been available for federally held student loan borrowers since the pandemic forbearance benefits were put in place March 13, of 2020. So that’s probably what we need to talk about next. Most people who have graduated from veterinary school 10, 15, 20, 30 years ago, just assume that none of these things apply to them. That they don’t have the right student loans or all the benefits are for new grads, or students that are in school, or just graduated recently. And that couldn’t be further from the truth. Most of these most recent benefits are aimed at people who have been carrying student loans for a long time. Now that also intersects with the messiness around this federally held student loan concept. The people that have been in school, particularly before July of 2010, probably have some loan types that wouldn’t be eligible for these particular benefits. But you have the opportunity between now and the end of the year in most cases, to consolidate those loans. So you can benefit from these announcements. That’s the thing that I really want people to know first. Just know what loan types you have. And if you don’t have federally held student loans right now, you’re going to need to consolidate them before the end of the year into a direct consolidation loan in order to receive the $10,000 or $20,000 cancellation if you’re eligible. So that’s the first step.
Steps to Consolidate Your Loans
Jordan Benshea: I’m guessing that people’s first question is going to be “Where do I go to find out what types of loans I have”?
Tony Bartels, DVM, MBA: Yeah, so the easiest way to do this and there’s multiple ways to do it, is for you to recreate or login to your StudentAid.gov account. Anyone who has ever received a federal student loan from the Department of Education, or either from the Federal Family Education Loan Program, which was available prior to 2010 will have information in there. This is the newer version of what FAFSA is. Everybody probably remembers FAFSA and their pin and applying for Federal Student Aid way back in the Dark Ages. But now it all goes through StudentAid.gov. You either have to resurrect the account that you have, if you ever had that electronic version. Or if you pre-date when the electronic version started you can create an account with student aid.gov. You provide them an email and your social security number and you’re going to find any student debt balances that you have on file there. And then you can download your federal student aid data file. We’ve got a tutorial for how you can find your federal student aid data file once you’re logged into the StudentAid.gov website. That file is going to have all of the ugly historical details of your federal student loan borrowing career. Those details you can then use to determine not only if you have the types of loans that would be required to consolidate in order to benefit, but also if you receive a Pell Grant. One of the thresholds for whether or not you receive $10,000 or $20,000 of cancellation is whether or not you ever received a Pell Grant. And for some of you that may have been so long ago that you may not remember if it was a Pell Grant or some other kind of grant or some other kind of scholarship, but you’re going to want to know whether or not you received a Pell grant. So you can receive that $20,000 of cancellation if you deserve it. That’s one of the criteria that the Department of Education is going to use to provide that additional amount of student loan cancellation.
Jordan Benshea: We’ll put a link to that tutorial and those links in the Episode Notes as always, I’m guessing the second question our listeners are now wondering is “How do I begin to consolidate”?
Tony Bartels, DVM, MBA: Once you have that student aid data file, then I would encourage you to go over to VINFoundation.org and go to the Student Debt Center. Go to the My Student Loans tool. It’s also the same place that we have the tutorial on how you can find your student aid data file. You’re going to upload that student aid data file, an ugly dot txt file, you got to upload that file into the My Student Loan tool. We have alerts set up that will tell you if you have the loan types that require you to consolidate. Once you work through that, or you know whether or not you have the loan types that require consolidation, then you can head back over to StudentAid.gov and start the direct consolidation loan process. The direct consolidation loans can also be done through StudentAid.gov portal.
Jordan Benshea: And so we’ll be putting the links to that as well in the Episode Notes. What else do listeners need to know about this targeted debt relief?
Tony Bartels, DVM, MBA: It’s time limited. That’s part of the other piece of the announcement which extended the pandemic forbearance benefits through the end of the year. But ideally, they’re going to automatically cancel what they can between now and the end of the year. And in the meantime, they’re also going to produce some kind of application. So if you don’t automatically receive the cancellation, you can apply for it. But again, you have to consolidate your loans. If you’re in that group of folks who need to consolidate before the end of the year, in order to receive any cancellation that you may be due if you fall under the income limits or have received a Pell Grant.
Final Payment Pause Extension
Jordan Benshea: Okay, and then let’s talk about the second part of this announcement, which came on Wednesday. Which was sort of, oh, by the way, additionally, what they are calling the final payment pause extension through December 31, 2022. Do we really think this is the final?
Tony Bartels, DVM, MBA: They’ve definitely used the word final and one last time. They’ve been a little bit more, I guess, strict about it this time. Who knows, right? It’s been extended so many times now. They’ve said final before. Really, it probably depends on how the execution of what they’ve proposed goes. They don’t have a lot of time here. We’re bearing down on just about three months left in the year. They’ve promised to do a lot. I think, depending on how that goes, will determine whether or not they actually extended beyond the end of this year. The estimates I saw, they believe that 20 million people should receive this student loan cancellation. They think they can automatically do it for 8 million people. That leaves 12 million people. If they don’t see kind of the expected applications for 12 million people that they then are going to process by the end of the year? Well, then they may have to extend it beyond that. We’ll see. I mean, I don’t know. I certainly don’t get to make those decisions, but from the outside look to me probably has the most to do with whether or not they would consider extending it further. Whether or not they left themselves enough time here to actually execute on all of these promises that were in the recent announcements.
Jordan Benshea: Okay. Then we heard about something else.
New Income-Driven Repayment Plan
Jordan Benshea: This is a mention of a new income driven repayment plan. And, wow, were there a lot of questions around this. What do we know now?
Tony Bartels, DVM, MBA: They dangled this new plan out there. A new income driven plan that would lower the percentage of your discretionary income that you pay towards your student loans. Limited information here. It seems like it’s targeted mostly to those folks that only have undergraduate loans. All veterinarians have graduate, professional school student loans. It remains to be seen how much veterinarians might be able to benefit from any new income driven plan that might be available. Chances are that’s not going to be available for anyone until at least sometime next year. But I’m waiting to see the details that are going to be announced and published for comment. Hopefully, in the not-so-distant future. We can see if there would be any ability for veterinarians to benefit from that new income driven payment plan.
Jordan Benshea: Okay.
Preparing for Debt Relief and Repayment Plans
Jordan Benshea: And if for some reason people have been living under a rock for the last two and a half years, what should they be doing now to prepare for either this new income driven repayment plan or debt relief or this final pause extension?
Tony Bartels, DVM, MBA: I would highly encourage you to do what we call a physical exam of your student loans. Obtain a recent version of your Student Aid data file from StudentAid.gov, upload that file into the VINFoundation My Student Loans tool. We’ve gotten a lot of algorithms built in there to help identify a lot of these benefits and things that we see in your file that would require you to act. Because it’s just very difficult to know. A lot of these loans look the same. The loan servicers are generally pretty terrible at helping you understand what types of loans you have and what you might need to do.
Understanding Your Student Loans
Tony Bartels, DVM, MBA: Really understand what repayment plan you’re enrolled in now and how much your minimum monthly payment is. They did make some changes this summer to the Student Aid data file where they put the interest rate data back into the file. We can show you what your weighted average interest rate is before it was all zeros and we had to make a lot of guesses or manually calculate that. It’s a lot easier to see what your weighted average interest rate is or the various interest rates across all of your loans now. That’s really helpful information in making decisions for switching repayment plans. Particularly if you’ve been using a time driven plan like a standard 10-year or 30-year plan or an extended or graduated repayment plan. And then weighing whether or not it makes sense for you to either consolidate your loans, switch repayment plans, and see if there’s an income driven plan that might benefit you going forward.
Consolidation and Forgiveness Opportunities
Tony Bartels, DVM, MBA: Because now we’ve had this new announcement this week. The announcement we had from April provided some significant incentives for particularly older borrowers to consolidate their loans. We’ve removed all of the traditional penalties that were associated with consolidating your loans. One of the big reasons why folks who graduated a while back might not want to consolidate their loans is because if they were using a plan like IBR, they would lose that forgiveness time that they’ve logged. But between now and the end of the year, under the previous announcement, in April, you still retain all of that forgiveness time. In fact, they’re going to give anyone and everyone with federally held student loans, forgiveness consideration, regardless of the repayment plan that you’ve been using. And this is another game changing announcement that’s kind of now been swept under the rug. We’re going to cancel $10,000 or $20,000 of student loans. Most people that still have student loans from the 90s, the early 2000s, the early 2010s, had been in repayment for a long time and forgiveness can trigger after 25 years of repayment time. If you’ve been using an extended or graduated repayment plan for 22 years, now you have the opportunity to have that 22 years count towards forgiveness. Which means you only have maybe three years left of repayment before you hit forgiveness and you’re done with your student loans. All of that depends on you identifying the loan types you have and making sure you have those federally held student loans. And if you don’t, consolidating them before the end of this year so you can receive that special forgiveness count that would make you eligible for all of that repayment time that you’ve already logged. There’s so many things going on now. I know it’s probably the time that you really want to understand. Because every time they announce something new my head starts to spin. But every announcement has made forgiveness and cancellation and the importance of income driven repayment and knowing your options that are available. Because now, so many more people can benefit from this and have in the past. And I really encourage you to see the folks that we’ve done message board posts with and done those physical exams and reviewed their treatment options. And you can see how we do that or how you can get that assistance on the Student Debt Help page on VINFoundation.org. I have been amazed at how much relief is available for folks who have graduated in the 90s. There’s a ton of benefits here. It’s just picking through all of the nitty gritty to see what is your pathway forward in order to benefit.
Jordan Benshea: Okay, great. It’s helpful that we’re at least providing some information, obviously, we would love to have more information, right? I mean, we hate being in the dark about some of these things. Especially because we want the information we’re providing, we want to make sure it’s correct and right. And we’re trying to do the best job we can. But there’s still a lot more information that we need right?
Tony Bartels, DVM, MBA: No doubt. And hopefully, we’re going to see that. And hopefully, we’re going to see some of these things that have been announced this year start to take effect. I’m going to be really encouraged once we start to see the forgiveness qualifying time that we’ve all logged start to show up in our Student Aid data file. So we know how close we are to forgiveness. It’s essential to planning to go forward.
Maximizing Pandemic Forbearance Benefits
Tony Bartels, DVM, MBA: In terms of the pandemic forbearance benefits, again, take advantage of them. You have no payment, no interest, you’re still earning forgiveness time through the end of this year. Use that time to boost other areas of your financial wellness. Make sure you have a robust emergency fund, boost your retirement savings, save for the down payment on a home or building a family or buying or starting a practice. All of these things that generally people would like to do but find their student loans are kind of in the way of allowing them to do. Use this flexibility that you have to jumpstart all of those other areas of your financial wellness. After we see how much forgiveness time we all have available, you may be closer to having your loans gone than you ever thought. There’s really no good reason financially to make payments towards your student loans right now. While there’s no payment due, there’s no interest accruing, and there’s a good chance that you may end up having them forgiven. If anything, take advantage of the opportunity the pandemic forbearance benefits provided to request a refund. You still have an additional three months and a few days here to request a refund of any payments that have been made to federally held student loans. I still I find a lot of folks, particularly students, very recent grads who have paid a bunch of payments towards their student loans. That’s a really volatile time in your earnings career to be making payments towards something that is really, really, really low on the risk spectrum of things in your financial planning. Take advantage of these opportunities, request a refund if you’re due for one. Use that money to pay off other less flexible debt, build that emergency fund, jumpstart those other financial bonus items that we were talking about.
Jordan Benshea: Great advice, Tony. Is there anything else we want our listeners to know about this news?
Tony Bartels, DVM, MBA: Yeah, stay tuned for more.
Staying Informed and Seeking Help
Tony Bartels, DVM, MBA: There’s going to have to be more detailed provided. Again, get into that Student Aid account, find that Student Aid data file, upload into the VIN Foundation My Student Loans tool. Jump on the VIN Foundation Student Debt message board areas so you can see how other colleagues are approaching this. You can see the questions that they’re asking. Some of us don’t even know what questions to ask. That really helps with educating you enough to know what questions you should be asking about your student loans. And then you can participate in those discussions as well. So that’s how we provide that personalized student debt assistance and it’s available to any veterinary student and veterinarian.
Jordan Benshea: That’s great. Thank you so much, Tony, for all of your information and for really just as always diving in headfirst and helping colleagues. We’re very, very grateful.
Outro
Jordan Benshea: And for any listeners out there, please let us know if you start to see those changes in your student debt file. Let us know so that we can let others know. Absolutely jump on the message boards. It’s a huge resource of colleagues out there that can weigh in and share information and it’s a great resource. As always, reach out if you have questions and we will have a lot of links and information in the Episode Notes. Thanks again, Tony, for being here. We really appreciate it.
Tony Bartels, DVM, MBA: Yeah, thank you. And good luck, everyone. And please reach out for help. And yes, lots and lots of questions.
Jordan Benshea: Thanks, everyone. Thank you for joining us for this episode of the Veterinary Pulse. Please check the Episode Notes for additional information referenced in the podcast. If you enjoyed this podcast, please follow, subscribe, and share a review. We welcome feedback and hope you will tune in again. You can find out more about the VIN Foundation through our website, VINFoundation.org, and our social media channels. Thank you for being here. Be well.