Listen in with student debt experts and Board Member Drs. Tony Bartels and Rebecca Mears in this next installment of our Student Debt Series covering the One Big Beautiful Bill impact on student loans.
In this episode we have seven major topics we’re addressing:
- SAVE forbearance zero-interest ending
- Updates for current veterinary students those starting and returning to vet school
- Pre-veterinary students applying for 2026/2027 year
- 2025 veterinary graduates whose grace period is ending
- RAP (Repayment Assistance Program)
- Phase out of existing programs
- Where things stand with PSLF (Public Service Loan Forgiveness)
As always, we want to hear from YOU. Please share your thoughts by sending an email or joining the conversation.
GUEST BIOS:
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.
Dr. Rebecca Mears
Rebecca Mears, DVM is from Lexington, KY, and a graduate of University of Georgia’s College of Veterinary Medicine. Rebecca started her career as an equine general practitioner and is an active AAEP member, currently serving as a member of the AAEP DEI Committee. Her interest in student debt education began with keeping her own education costs lower and grew from there. This was supported by her involvement in the Veterinary Business Management Association (VBMA), which she now gives back to as a National Advisor. In her time away from veterinary medicine, she can be found obsessing over plants and hosting impromptu dance parties. She is passionate about giving back to the profession and improving the lives of veterinarians, pre-vet and vet students.
LINKS AND INFORMATION:
VIN Foundation GIVE page to support these programs & tools
Vet School Bound Future Veterinary Student Loan Changes
VIN Foundation Blog, Related Student Debt Blog posts:
- Changes to federal student loans come into focus
- Student Loan Repayment: Trying to leave the SAVE forbearance? Choose PAYE
- Student Loans in SAVE Plan Will Start Accruing Interest August 1st
- Application for Federal Income-Driven Repayment Plans Reactivated
Personalized student loan Help from VIN and VIN Foundation
Income-Driven Repayment Plan Discretionary income calculations, WikiDebt
Federal Student Aid Data, Consolidation, and Repayment Applications
One-time Forgiveness Count Adjustment
Federal Student Loan Servicers
Public Service Loan Forgiveness (PSLF)
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TRANSCRIPT
Intro
Tony Bartels, DVM, MBA: Of course we had the One Big Beautiful Bill that was passed into law and actually signed by the president on July 4th. So everything that relates to student loans as outlined in that new law will necessitate some borrowing and repayment changes. But then about a week after that, it was announced that loans that are in the SAVE forbearance, which had previously not been accruing interest and no payments were due, will start to accrue interest, and that’s going to happen on August 1st. So some pretty huge changes to the student loan repayment system.
Jordan Benshea: That is student debt expert and VIN Foundation Board Member Dr. Tony Bartels with Dr. Rebecca Mears, 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. Welcome everyone.
Overview of Student Loan Changes
Jordan Benshea: We are back here again with our VIN Foundation student debt education team, doctors Tony Bartels and Rebecca Mears, and we are here to talk about, shockingly, student loan news. And we’re here to talk about student loans, student debt, and how that landscape has been impacted by the recent bill that was passed. Welcome, Tony and Becca.
Tony Bartels, DVM, MBA: Hello.
Tony Bartels, DVM, MBA: Thanks, Jordan. Here in student debt land we are always keeping things interesting and spicy.
Jordan Benshea: Very, very wild, wild west of us. As we all know, there have been many changes in the student loan landscape with a recent bill that was passed. We have a lot of colleagues who are reaching out for support, and in this episode what we’re going to be covering are seven major topics. One, SAVE and the forbearance 0% interest ending. Two, updates for current veterinary students, those starting and returning to veterinary school. Three, pre-veterinary students applying for the 2026-2027 year. Four, 2025 new veterinary graduates whose grace period is ending. Five, RAP, the repayment assistance program. Number six, the phase out of existing programs. And number seven, where things stand with Public Service Loan Forgiveness. There’s plenty to cover. Let’s dive right in.
SAVE Forbearance and Repayment Options
Jordan Benshea: Where do we stand and what’s the latest on SAVE and the forbearance 0% interest ending?
Tony Bartels, DVM, MBA: Yeah, I mean, it’s definitely a lot to cover. There’s certainly a lot changing. Just to kind of back up a bit, I think the reason that we chose that outline is because that’s what’s going to be happening first. Of course we had the One Big Beautiful Bill that was passed into law and actually signed by the president on July 4th. So everything that relates to student loans as outlined in that new law will necessitate some borrowing and repayment changes. But then about a week after that, it was announced that loans that are in the SAVE forbearance, which had previously not been accruing interest and no payments were due, will start to accrue interest, and that’s going to happen on August 1st. So some pretty huge changes to the student loan repayment system from the recently passed law, and then right on top of that a pretty big announcement on the SAVE forbearance, which had kind of been lingering in the background. We’ve been waiting for some more formal handling of the SAVE plan as a result of some court rulings, and I guess we got it. I mean, at least we got the next step in it, which is the ending of that interest subsidy that the SAVE loans that are in the SAVE forbearance had been experiencing and rightfully so. That’s a lot of change very quickly, and people that had been kind of in a pause with their student loans for a long time are now scrambling, so particularly those folks that are in the SAVE plan, and that’s myself. Becca, I believe you’re in the SAVE plan as well, is that?
Rebecca Mears, DVM: Right there with you.
Tony Bartels, DVM, MBA: Yeah, so we’re all kind of looking at, well, what do we do next? That’s probably the most common question that’s been popping up on VIN in the Student Debt Message Board area lately is, what do I do about this SAVE interest benefit now ending? Do I switch plans and what do I switch to? That’s where we start to then spill over into, well, what was in the new bill, because everybody’s like, well, do I change to this new Repayment Assistance Program, or RAP, the new plan that’s in the new law? Unfortunately not. Not yet anyway, because it doesn’t become available until July 1st, 2026. Maybe they’ll get it out sooner than that, but the law says that it won’t be available until July 1st, 2026. So that kind of leaves a lot of people that are in that SAVE forbearance with maybe few options. You can still switch to an income-based repayment plan, whichever version you’re eligible for, whether that’s the new version of IBR or I call it IBR 2014, or the old version, which is IBR 2009, or you can switch to Pay As You Earn if you are eligible for that. Just recently posted a blog on that topic on VINFoundation.org. If you’re eligible for PAYE, PAYE is probably the next best place for you. So if you have access to that plan, you can still use it. That touches on some of the phase outs. You could still use some of the existing plans for a number of years yet, and those will help to serve as a bridge during this transition to help get you to potentially that new RAP plan or something more permanent based on which is going to be the best one for you, but you could also stay. You can keep your loans in the SAVE forbearance. They’ll accrue interest and that’s really going to be hard to watch since we’ve been living in an interest free student loan world for quite a while, but it may not be the worst decision to leave your loans in the SAVE forbearance, even with the interest accruing until something like maybe RAP is available. So, that’s really going to depend on your specific circumstances, whether you’re likely to hit forgiveness, how much forgiveness credit do you have, what your debt to income ratio is. All of these sorts of things that will play into that equation on whether or not you should leave your loans in SAVE, or as long as they let you keep your loans in that forbearance even though it’s accruing interest or if you should switch to another option that you’re eligible to use.
Rebecca Mears, DVM: I was really glad to have you touch on that, Tony, because I think that is one of the most common misconceptions that I’m seeing out there right now, is that SAVE and the SAVE forbearance are done, when in actuality the SAVE forbearance is still continuing. It’s just that we are no longer going to see the benefit of that 0% interest.
Tony Bartels, DVM, MBA: We also don’t know how long that will last. But to my knowledge, they’re just ending the interest portion of it, so they’ll start accruing interest. They’re really trying to get you to change out of SAVE, so I don’t know how long you’ll be able to keep your loans in the SAVE forbearance, even with the interest accruing, but I’m not in a huge rush to change. So coming back to my loans, were in SAVE and we’re kind of looking at that now to see does it make sense for us to switch. Maybe not and just kind of wait and see a little bit, I’d prefer. One of the reasons that I am a little hesitant to switch out of SAVE is because I am only eligible for the older version of IBR, so IBR 2009. If I switch to IBR 2009 and I now have a payment due, it’s going to be significantly higher than it would’ve been under SAVE and higher than it will be under the Repayment Assistance Program. Once that RAP plan becomes available next year, if I then switch from IBR into RAP, I’m going to have my unpaid interest capitalized, which means it’ll get added to my principal. The higher my principal, the higher the amount of interest accrues. Going forward I may end up paying more because of that unpaid interest capitalization. One of the things that blunts that impact is that RAP does have a 100% unpaid interest subsidy. So kind of like SAVE had, where if your payment was less than the monthly interest accrual, you won’t be charged additional interest. So if you stay with RAP long term you will not experience as much interest accruing on your student loans.
Rebecca Mears, DVM: Yeah, that’s one of those important things, that capitalization of unpaid interest, especially where we had started off talking about the IBR 2014 versus PAYE. I’ve been seeing a lot other places in the wonderful interwebs that are really pushing that IBR 2014, but PAYE doesn’t have that capitalization event if you were to switch from that program to RAP when it becomes available. So I think that is an important thing to note.
Tony Bartels, DVM, MBA: Yeah, and one of the big kickers with the RAP plan, and we’ll come back to this a little bit later, is that the time to reach forgiveness is 30 years total. So some people may not want to be in repayment longer, and it may end up increasing your total repayment costs. So there’s going to have to be some significant analysis done before we settle on a plan like RAP long term, so I kind of want to limit the amount of capitalization that might happen. If you have that stepping stone, like Becca mentioned, to use PAYE in the interim here, then when you switch out of PAYE for another plan, maybe like IBR 2014 or the Repayment Assistance Program, your unpaid interest will not get capitalized.
Jordan Benshea: Yeah, we’ve definitely had a lot of questions about the increase of time for repayment plans and concern.
Tony Bartels, DVM, MBA: Yeah, that’s going to be one of the huge factors that is going to cause even more stress around, what do I do next, because I can tell you that nobody has ever said, “ooh, I wish I could be in repayment longer.” So while the Repayment Assistance Program has some nice features in it, that 30 years to forgiveness is kind of a kick in the pants.
Jordan Benshea: Yeah.
Updates for Current and Future Veterinary Students
Jordan Benshea: Okay, what about updates for current veterinary students, those starting fall 2025 and those returning?
Tony Bartels, DVM, MBA: Yeah, so we wanted to cover that because that’s going to be one of the next big events coming up, is most of the veterinary school programs are going to start later this summer. They’re rightfully so worried that the law is going to change what borrowing looks like for their education, and thankfully it will not. So there is some grandfathering, if you will, for students that are currently enrolled or starting programs this fall. They will still be covered under the current borrowing rules, so they’ll still have access to all of the same loans and all of the same limits that previous veterinarians have had as they’ve worked their way through veterinary school. They will experience a change to repayment when they get out, but we’ll talk about that more later. We’ve got more time before that becomes an issue for those future veterinary school graduates.
Rebecca Mears, DVM: For those that, obviously the students that have been in school, Tony and I try our best to collaborate with schools and student groups and things like that to get that knowledge out there. But for those that are headed to school this fall to start, check out the VIN Foundation Borrow Better resources. Those are a great place for you to learn about the current borrowing system that you’re going to be a part of and what that means for you as you’re starting vet school.
Jordan Benshea: Let’s talk about pre-veterinary students, those that right now are in VMCAS and are applying for 2026-2027. I’ve heard a lot of concern from pre-veterinary students, so what information can we help with them because you usually hear pre-vet students say, “oh no, no, it’s fine, I’ll just deal with it, I just really want to go to veterinary school,” and I feel like this is the first year as we get ready to open our scholarship in the next few weeks that I’m hearing, oh my gosh, like, what is happening? Yeah.
Rebecca Mears, DVM: There’s a lot of breaks squealing in the background.
Jordan Benshea: There are, yeah.
Tony Bartels, DVM, MBA: That’s the reason why we’re going to talk about that now, is because that VMCAS, the Veterinary Medical College Application Service run by the AAVMC, that application cycle closes this September. September 15th, I believe it is. That’s two months away, and that’s for the students who are going to start the following fall, so the fall of 2026 for most veterinary school programs. That’s when all of the changes for borrowing are going to take effect. So the students that are starting their veterinary school programs that following fall, the fall of 2026, are going to be the first cohort that will experience all of the new changes to borrowing for something like professional school, like veterinary school. So that’s something we’re going to have to really pay close attention to and we really want those veterinary school applicants to be very aware of. So we have a initiative through VIN Foundation called Apply Smarter, where we really encourage you to apply to those schools that are going to keep your costs as low as possible, whether that’s your in-state school or one of the really beneficial programs that allow you to change your residency status while you’re attending school. Those are really the programs you want to focus on if you are going to be using student loans to cover your costs, which we know 80% or so of veterinary students use federal student loans to cover their educational costs because it’s going to be extremely important for you to keep that total annual and total overall cost as low as possible because there’s going to be some new limits on borrowing that can cause some significant issues once you hit them. So right now there’s going to be a $50,000 cap, annual cap for those students that are starting something like veterinary school the fall of 2026. So if you need more than $50,000 to cover your costs, you’re only going to be able to give $50,000 in direct unsubsidized loans, so those are the federal student loans. Then the remainder of that you would need to obtain from a private lender. So you’re going to have to apply for a private loan to cover any of the costs above that. So your goal should you choose to accept it, is to minimize your reliance on those private student loans to the extent possible, or maybe eliminate them all together. Maybe you can not use them at all if possible because that’ll certainly make repayment easier. Those federal student loans are still the most flexible, even though they’re very confusing. Compared to private loans, private loans are very limiting, very costly, and they’re going to have higher monthly student loan payments as you’re getting started in your veterinary career. It’s going to be a tough lift, but we’re going to try to get as many veterinary student hopefuls as possible to avoid those higher cost seats so you can stay out of those private student loans. I mean, it’s going to be pretty imperative.
Jordan Benshea: Yeah.
Rebecca Mears, DVM: Well, and I think too the annual cap of that $50,000 a year is something that has been missed a lot in this messaging and is incredibly important. It’s not just that you get to run up to that $200,000 and then you worry about private loans, it can start impacting as soon as your first year.
Tony Bartels, DVM, MBA: Exactly, and the higher the cost, so if you attend an out of state school or a private school and some of their costs of attendances are approaching $100,000 a year. So if you have to borrow to cover all of those costs, the first $50,000 will come in federal student loans, but the other $50,000 is going to have to come in private loans, and that’s going to be very difficult to get. I mean, most private loans are going to require you to have some kind of assets or demonstrate some credit score or history, and if you don’t have much, which a lot of veterinary school applicants don’t, they’re going to rely on a co-signer. So maybe somebody in your family or a significant other or somebody else might be on the hook for your student loans to cover those additional costs that you need beyond those federal student loans. In some cases you may not even get them. I mean, certainly not unreasonable to consider a scenario where you can get the federal student loan funding but you can’t get the private student loan funding. That would be horrible to get admitted to veterinary school and then find out that you can’t pay for the additional cost to cover any additional tuition and fees that you might have to pay beyond those federal student loans.
Jordan Benshea: So there’s a lot of, obviously, schools that are outside of that $200K range.
Tony Bartels, DVM, MBA: Yeah.
Jordan Benshea: Have we heard any response or has there been any? I haven’t seen anything, but maybe I’m just looking at the wrong places. I’d be curious to hear if any of those veterinary schools are rumbling.
Tony Bartels, DVM, MBA: Well, they’re rumbling.
Jordan Benshea: Oh, they’re rumbling.
Tony Bartels, DVM, MBA: Yeah, I mean, at least the folks that I’m talking to at some of those institutions. And what is this going to do to our applicant pool and…
Jordan Benshea: Right.
Tony Bartels, DVM, MBA: What are they going to do?
Jordan Benshea: Especially with all the new schools opening.
Tony Bartels, DVM, MBA: Well, yeah.
Rebecca Mears, DVM: The question is, what are you going to do?
Tony Bartels, DVM, MBA: A lot of them are expanding their sizes and rely on a lot of those out of state students to pay for those out of state seats. Up till now, they really haven’t had a hard time getting federal student loan funds to cover those, but now that’s going to be more difficult.
Jordan Benshea: Yeah.
Tony Bartels, DVM, MBA: Yeah, so unless you’re paying for this out of pocket or you have some significant personal or outside funding to help cover those additional costs, I would highly encourage you to leave those more expensive schools off your list entirely because it can really put you in a precarious position.
Jordan Benshea: So, let’s talk about the 2025 veterinary graduates whose grace period is ending. So the ones that have just graduated, they’re starting their jobs and oh, here are these changes for you to also focus on. Yeah, what’s up for them?
Tony Bartels, DVM, MBA: Yeah, so wanted to make a special mention for those because this year was, probably when we did the new grad playbook, which is a webinar resource and supporting materials that we do around each graduating timeframe, that’s available on the VIN Foundation website if you missed that, this was one of the first years that we told people maybe you don’t want to consolidate your loans in a lot of cases. When you don’t consolidate, that means your grace period is running its course, and most veterinary programs finish April, May, June-ish, so that means 6 months later you’re grace period is ending and you are going to have to choose a repayment plan or maybe even a couple of months before that grace period officially ends. So what does that look like? Thankfully, again, we have this even with all of the new legislation and changes that are in there. There’s this transition phase where you still have access to the existing Income Driven Repayment plans that you can apply for before we get to the new Repayment Assistance Program and some of the repayment changes that are taking effect next year and then after July of 2028. So we do have this on-ramp, if you will, where you’re able to choose the existing repayment plans to help get you to some of those more permanent repayment options as they start to phase in. So at this point, kind of like we were talking about earlier for those folks that are in the SAVE forbearance that might want to switch plans, you really want to focus on Pay As You Earn. Most new graduates should be eligible for Pay As You Earn. If you want to check, I would encourage you to go log into studentaid.gov, download a recent student aid data file, and upload it into the VIN Foundation My Student Loans tool. In that tool you’ll see an IDR eligibility, so Income Driven Repayment eligibility tab, and that will show you which options you have available to you. So if you’re in IDR profile 1 or IDR profile 2, which most 2025 graduates should be in, then you’re able to choose Pay As You Earn and that’s going to be the best plan to help you get started through this transition phase. Still will keep your payment relatively low or even $0 if you filed a tax return before you graduated, and it’ll help you avoid that unpaid interest capitalization when you have to move away from PAYE to a more permanent place as Pay As You Earn gets phased out on July 1st, 2028.
Repayment Assistance Program (RAP) Explained
Jordan Benshea: Okay, so now let’s round back to RAP, the Repayment Assistance Program, and let’s break this down for our listeners.
Tony Bartels, DVM, MBA: So the Repayment Assistance Program is a new option that will become available per the law July 1st, 2026, so next summer. The Repayment Assistance Program will calculate a payment based on a percentage of your adjusted gross income. So the adjusted gross income is a measure from your tax return. If you don’t have a recently filed tax return, they will allow you to use what’s called alternative documentation of income, so something like a pay stub, to tell them, well, what’s your annual income. So we can take that number and apply a particular percentage to it, and the percentage will range anywhere from 1% to 10% depending on where your income lands on that range. So any income over $100,000 will be subject to that 10% of that amount divided by 12 to get you to a monthly payment that will be your baseline minimum monthly payment under the Repayment Assistance Program. For folks who have dependents claimed on their tax returns, those dependents will result in a $50 per month credit or subtraction against your baseline Repayment Assistance Program monthly payment. So they calculate that baseline based on your annual income and apply the appropriate percentage based on where you fall in that table. If you have dependence on your tax return, then you can subtract off $50 from that minimum monthly baseline payment to get to your actual monthly payment on your student loans.
Rebecca Mears, DVM: Which is a pretty significant change from how dependents had been factored into those payment calculations with the other Income Driven Repayment plans.
Tony Bartels, DVM, MBA: Yeah, and that’s what’s going to cause a lot of the confusion too, is now we have the Repayment Assistance Program that actually takes the dependences from your tax return, which in some ways is a little cleaner. The existing income driven plans have their own “family size definition” that is separate from your tax return, but that still exists. So we have the Repayment Assistance Program, so it has its own set of rules, and then there’ll also be the income based repayment options that are still available, as well as Pay As You Earn and ICR, at least until July 1st, 2028 before those get phased out. They have different family size definitions, so those are going to be things that we’ll have to compare when we’re choosing a repayment plan and even when we’re filing our taxes each year. You still are a able, so kind of like the existing Income Driven Repayment plans, the Repayment Assistance Program will allow you to separate your income from your spouse if you’re married, as long as you filed your recent tax return separately from your spouse. However the big difference between how they treat the dependents now will matter. When you file your taxes separately, one spouse gets the dependents and the other one often doesn’t. Or you might find a reason to split them up if you have multiple dependents, but whichever set or number of dependents end up on your version of the separate tax return will determine that amount of dependent credit in the Repayment Assistance Program calculation. So, that’s the part that’s going to be different from the previous income driven plans, because you were able to file your taxes separately, but still count those same dependents no matter where they lined up on your separate tax returns. So those will be some of the challenges we’ll face when we’re trying to compare something like Repayment Assistance Program against the IBR programs or income based repayment programs that will exist alongside the Repayment Assistance Program, at least for folks that are currently in repayment.
Rebecca Mears, DVM: I can already sense heads spinning trying to wrap around that and what that means for borrowers, especially those with dependents and things. So, as of recording this, we don’t yet have RAP as part of the Student Loan Repayment Simulator, but that is something that is coming. So we will work on getting that added. The awesome team behind that tool is hard at work at it. Then we’ll also be ready to answer questions about it all.
Tony Bartels, DVM, MBA: Yeah, so we definitely, I mean, I’m sure you can sense from all the different variations that it’s going to be challenging to get that into the simulator and make sure that it’s calculating all of the math correctly. One of the things we haven’t talked about yet, but it kind of gives us a good springboard into that is, you’re going to have Repayment Assistance Program and IBR plans available for those folks who are currently in repayment. But then those folks that are starting borrowing after next fall, so that group that we talked about that’s applying for veterinary school right now and are starting fall of 2026, once you receive a loan after 2026, so even those of you that are in veterinary school, once you take a loan after the fall of 2026, you’re no longer going to have the income based repayment options available to you. You’ll only have the Repayment Assistance Program, as well as some standard repayment options available to you. So, that’s going to look different once you get to repayment. But again, once we have that in the simulator and we know when you graduated or when you borrowed, based on the information that you upload into the My Student Loans tool, we’ll be able to show you the appropriate repayment options for your profile, for your borrowing profile.
Jordan Benshea: So we don’t quite have the wrap on RAP, but…
Rebecca Mears, DVM: How long have you been holding onto that one, Jordan?
Jordan Benshea: I mean, I let you guys say a few things before I came out with it, but when you said it, I just thought it’s too good. Okay, one of the things that we are hearing a lot is, what are going to happen to all these plans that we’ve been recommending, suggesting for years? Which we thought were super stable, but as we know in life, the one constant has changed.
Phase Out of Existing Programs
Jordan Benshea: So let’s talk about the phase out of existing programs.
Tony Bartels, DVM, MBA: Yeah, so in the law that was passed on or signed the law on July 1st or 4th, sorry, July 4th, the Pay As You Earn, ICR, and SAVE plan, regardless of what the courts decides to do with it, will be phased out on July 1st, 2028. Nobody, even those folks that are currently using those plans, will be able to continue using those plans or select those plans after July 1st, 2028. So you have the option of selecting another repayment plan before July 1st, 2028, but if you don’t then they will select one for you. So either the Repayment Assistance Program, which everybody will be eligible for, or one of the remaining income based repayment options if you are eligible, depending on which one you’re eligible for there. So I would encourage you to, and we’ve got a lot of time before that, so that’s the other, I guess, blessing and curse of this, is that we have some time. But then again, we have some time and people are really kind of itching to know, well, what do I do now? And it’s like, well, there’s a lot of changes coming, but you don’t have all of the options on the table just yet. So, we kind of have to watch this play out between now and July 1st, 2028 and then make a decision that’s a little bit more long term, if you will, presuming we don’t see any major changes between now and then, even so. Pay As You Earn, which had been kind of one of the best repayment options available, still remains so and will remain one of the best options for you to get to July 1st, 2028 so we have a better idea what that long term looks like. So if you’re eligible for that one, that’s a great place to be. If you can get into Pay As You Earn, that’s a great option to select, and then before July 1st, 2028, we hope to have a better picture on how you can compare your remaining repayment options. It’ll be well before then, but so by the time you get there you’ll be able to have a little bit more confidence in which repayment option you should be selecting.
Public Service Loan Forgiveness (PSLF) Updates
Jordan Benshea: Another thing that we are hearing a lot about is, there are many colleagues who are in PSLF. What are the concerns around PSLF and how can we help educate colleagues on where that is now?
Tony Bartels, DVM, MBA: Yeah, so Public Service Loan Forgiveness didn’t get changed in the law at all, so that was a huge benefit.
Rebecca Mears, DVM: Absolutely.
Tony Bartels, DVM, MBA: So Public Service Loan Forgiveness, the program where as long as you are making payments on direct loans using an eligible repayment plan, like an Income Driven Repayment plan, while working for an eligible organization, a state, federal, local government entity or otherwise, maybe a 501c3 nonprofit, those payments are still considered to be eligible for Public Service Loan Forgiveness. After you hit 120 eligible monthly payments for Public Service Loan Forgiveness, you can apply to have your loans forgiven, and those loans will still be forgiven tax free. So the law didn’t change anything, and in fact they specified explicitly that payments made under the new Repayment Assistance Program or RAP will be eligible for Public Service Loan Forgiveness as well. So they kind of affirmed that Public Service Loan Forgiveness is not going anywhere. What is trying to be changed in the background? So the administration is trying to do some regulatory changes around Public Service Loan Forgiveness and which organizations might be eligible and which ones might not be eligible. That’s still kind of early in that whole rule making process, and there will be undoubtedly challenges to that. None of those anticipated regulatory changes should affect most veterinarians who are working for a Public Service Loan Forgiveness organization. There are certainly going to be some that may get caught up in that, but we’ll have to kind of wait and see how that plays out. But I certainly wouldn’t avoid Public Service Loan Forgiveness if your career path is kind of having you in one of those employment opportunities or considering one of those employment opportunities.
Rebecca Mears, DVM: And I think seeing that RAP will allow you to continue earning time toward PSLF, I mean, that’s a pretty big win for those that are going towards that. I think that’s just such a huge thing that there had been a lot of worry about what was going to happen with PSLF, and just seeing that really kind of, as Tony was saying, confirmed it’s still around, it’s still there, it still an option.
Final Thoughts and Advice
Jordan Benshea: Okay, so anything else outside of those huge seven topics do we think we want our listeners to know or that you think would be additional helpful information?
Tony Bartels, DVM, MBA: There’s one I have to mention because I’ve seen it now more than a handful of times on the boards and it’s for people that are currently in repayment and are on studentaid.gov and they’re seeing some really odd information. One of the things that is concerning to me is that people are being told, at least on studentaid.gov, that if they consolidate their loans they might be eligible for Pay As You Earn or IBR 2014, AKA the new IBR, even though we know they’re not eligible. So you have to be very, very, very, very careful. I would, again, I mentioned it once earlier, if you grab a student aid data file and upload it into the VIN Foundation My Student Loans tool, it’s a free resource, anybody can use it, upload your student aid file in there and check that IDR eligibility tab. It’s really good. The algorithm in there is pretty strong. It does a really good job of telling you which income driven options you are eligible to use. Consolidation does not change that. The only thing consolidation’s going to do right now is eliminate all of your prior forgiveness credit and capitalize your interest. So I don’t know what’s going on exactly in the studentaid.gov system. It’s kind of hard. There’s just, again, so many changes happening so quickly. The most charitable explanation is that it’s a bug, but you have to be very careful it tells you that you need to consolidate to use a particular plan, because it may not be accurate. So double check that before you do that consolidation. Consolidation right now is really not a great idea unfortunately. It’s been really, really helpful over the years and if you go back on VIN Foundation and read the message boards and any of the other webinars we’ve done, we talk about consolidating all of the time and how it was always a great way to get your loans into repayment, and now you have to be very, very careful because it can undo a lot of your progress and make your loan repayment even more costly.
Rebecca Mears, DVM: I think the last thing that I would throw out is, and Tony I would love to hear your answer on this one, is what if I’m just ready to throw up my hands and be done with this federal student loan thing and all of these plans that are changing and the confusion and just, I want to be out of this mess.
Tony Bartels, DVM, MBA: Yeah, totally understandable. I have those moments daily, and my wife does too, and it’s like, should we really keep doing this? The answer is, you still have your student debt and it’s not like there’s some magic wand you can wave and say, “okay, well I’m just going to ignore the income driven options and pay back my student loans.” Well, if it was that easy before then you wouldn’t have been using the income driven plans. So chances are there was a reason you were using them in the first place. The payments that they generate based on your income are manageable, given the amount of debt that you have. You’re welcome to try to pay the balance off fast and forego any of this forgiveness business, but the monthly payments are going to be staggeringly high for maybe an uncomfortable amount of time, and if you’re pulling away from any of your other critical financial wellness goals in order to do that, then…
Rebecca Mears, DVM: Pump the brakes.
Tony Bartels, DVM, MBA: Yeah, you can’t afford it. You can’t afford to let this shake up in the system deter your strategy because it’s going to put yourself and maybe your family in a riskier financial position overall. So I get it. It sucks to see all these changes and an interruption in what you thought you had as a viable repayment strategy, but don’t blow up your entire overall financial wellness strategy just because they’re changing the repayment options. Your federal student loans are still the most flexible debt you’re ever going to have. I think part of the goal here is to kind of shake it up and get you to do things that you probably otherwise wouldn’t have done.
Rebecca Mears, DVM: Yeah.
Tony Bartels, DVM, MBA: But if you go forward and pay those loans back or try to pay those loans back, there’s still a very good chance you’re going to pay way more than you otherwise would have to, even under the changing landscape. So try to gather as much information as you can before you make that decision, and we often provide that comparison in the message board analysis. I mean, if you want to try your, maybe you’ve got 10, 12, 15 years before you hit forgiveness, well, let’s calculate out what it’s going to cost you to pay your loans back in 10, 12, or 15 years.
Rebecca Mears, DVM: Yep.
Tony Bartels, DVM, MBA: In most cases it’s going to be a higher number and an uncomfortably large monthly student loan payment, so I’m happy to do that comparison with you. You’re welcome to choose any strategy you’d like going forward, but I wish it was a magic wand to just say, “well, I’m done with this, I’ll do it another way,” but that other way isn’t all that great either.
Rebecca Mears, DVM: I absolutely agree there. I’ve had quite a few posts on the boards recently where it’s like, should I switch up my strategy, like maybe this planning for forgiveness thing isn’t the right way to go anymore, and it’s like, okay let’s explore that, you’re an adult, you can make your own choices, it’s your budget, it’s your money, this is what that’s going to look like. What does that actually look like for you and your family and your finances, if that’s something that’s doable and you want to make that decision, fantastic. For a lot of us, that’s not something that we’re able to do right now though, and unfortunately, that’s just the reality of the situation.
Tony Bartels, DVM, MBA: Indeed.
Outro
Jordan Benshea: Okay, well thank you guys so much for your time and effort and your endless hard work to help make colleagues aware of this and keep us all updated. We know there’s the blog and there’s this podcast and additional places for colleagues to reach out and learn more. We will put all the links that we’ve mentioned in this episode in the episode notes. Thank you so much, Tony and Becca for your time.
Tony Bartels, DVM, MBA: Thank you, Jordan. And just as a caveat, we’re all still learning how this is all going to play out. I mean, as we’ve repeatedly experienced before, as soon as we do something or say something we may find out next week that it’s a little different.
Rebecca Mears, DVM: Oh, yeah. They love to keep track of when we open our mouths.
Jordan Benshea: Yes.
Tony Bartels, DVM, MBA: Yeah, it seems that way.
Jordan Benshea: Yeah.
Tony Bartels, DVM, MBA: So, yeah. Double check everything, so yes.
Rebecca Mears, DVM: Absolutely.
Jordan Benshea: Double check everything and stay up to date. Make sure you’re signed up for emails. We’ll email latest information that we have, and thanks everyone. We appreciate you being here with us. Thanks, Tony. Thanks, Becca.
Rebecca Mears, DVM: Thank you, Jordan.
Jordan Benshea: 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.
