Veterinarians Are Treated Horribly Under Student Loan Rules

Veterinarians are treated horribly under student loan rules

If you’re a veterinarian, want to be one, are training to be one, or love someone who is, you should know about the extreme unfairness towards the profession that exists today. Veterinarians are treated horribly under student loan rules. Students graduate with huge balances, are not eligible for the best forgiveness options, and don’t earn high enough incomes to pay back their debts. To top it off, their peers in human medicine have access to a massive loophole in the student loan rules that veterinarians do not. This will result in veterinarians paying hundreds of thousands of dollars more on their student loans than human doctors making five times their salaries. This piece should serve as a call to action for the veterinary profession.

Veterinarians Have Among the Highest Student Loan Balances of Any Profession

I’ve worked with three veterinarians so far in my student loan consulting practice. Their average debt is $376,000. From what they’ve told me, most of their friends have debt loads that are a similar size. This is so wrong for a bunch of reasons.

First, the average med school grad I’ve spoken with has a lower balance. Regardless of what schools tell you, it has to be more expensive to educate a med student than a vet student. Why then does Vet school result in so much higher balances? I believe there is price gouging going on.

Veterinarians Are Treated Horribly Under Student Loan Rules

There’s not many accredited Vet schools to choose from. Because of the limited access, getting into Vet school is harder now than getting into medical school. Since so many college students want to be veterinarians, schools have the ability to raise prices. Furthermore, the federal government does not impose any caps for practical purposes on how much student debt you can borrow. In the absence of any market imposed restraint on the cost of tuition, it grows steadily higher each year.

Hence, veterinarians start off with a crushing debt load. Unfortunately, I have far more serious evidence that veterinarians are treated horribly under student loan rules.

Veterinary student loans are some of the most unfair to borrowers in the entire country

Veterinarians Have No Eligibility for the Best Forgiveness Option, PSLF

Assume that you are a vet student who graduates with $300,000 in student debt and receives an offer for $80,000 a year at a private vet hospital. Your loan payments will never touch the high balance unless you dedicate 50% of your income to your debt. That’s not a realistic proposition.

In the legal profession, a student could graduate with a similar debt load and work for the government for 10 years. After this period, the lawyer’s entire student loan balance is wiped away tax free.

Veterinarians have almost no in-field not-for-profit jobs available to them. Sure, there are scattered opportunities here and there, but nothing widespread like prosecutor or public defender jobs as in the legal profession. For that reason, virtually all veterinarians graduate and take a job in the private sector. Because of the lack of not for profit jobs, almost no veterinarians qualify for the Public Service Loan Forgiveness program, which is by far the most generous benefit available to students today. Some states offer vet school debt programs. Unfortunately, the federal PSLF program makes them look irrelevant by comparison.

Pay is High Enough to Owe a Lot Each Month, but Not High Enough to Make a Dent in Your Student Loans

Veterinarians certainly make more money than the average American household. That said, of course they should. They have four years of freaking graduate level education! Unfortunately, vet salaries are far below those of human doctors.

No matter how much a family loves their dog, there just isn’t the same financial desire to pay thousands of dollars for a surgery to save its life. Most families who face a huge vet bill to save their pet will instead decide to put the pet down. It’s very sad, and I’ve spoken with many veterinarian friends who want to save the lives of their patients but are not allowed to because of financial constraints.

Even so, veterinary salaries are high enough to require large payments in the income based repayment plans. Paying almost $10,000 per year towards your student loans is no joke.

That said, only paying $10,000 on a $300,000 loan balance does not even cover the interest. The federal student loan rules trap veterinarians. They have to pay big monthly payments when they graduate, but they aren’t able to pay down their debt.

The Human Doctor Loan Forgiveness Loophole Should Make Veterinarians Furious

I’m going to show how bad the problem is for the veterinary profession with a hypothetical example. I’ve made a super powerful, free calculator available here.

Assume Sarah graduated in 2012 and has been paying on her debt every year. She now has a $350,000 balance with an average interest rate on her consolidated loans of 7.25%. Sarah makes $85,000 a year in a private animal hospital. She will never be able to pay off her debt completely making the monthly payments in the income based forgiveness program. However, she will be eligible for taxable loan forgiveness in 2037, and will have to pay income taxes on the forgiven amount that year. Here’s how the cost looks:

veterinarians are treated horribly under student loan rules

So her total cost is $683,000 for her veterinary education over 25+ years.

Now let’s look at one of Sarah’s friends Christine who went to medical school. She graduated in the same year 2012 and has been making payments since this time. Christine is about to start her fifth year of training in her neurosurgery residency. She wants to do a fellowship as well, which will allow her to keep her payments low for the first 10 years of student loan payments. Here’s how much her loans will cost her:

veterinarians are treated horribly under student loan rules

Sarah the veterinarian will pay $683,000 over 25+ years to her student loans, and Christine the neurosurgeon will pay $33,000 over 10 years to her student loans. Sarah the vet will be making payments her entire professional life, and Christine the neurosurgeon will have her $474,000 debt balance completely forgiven tax-free before she starts making over $500,000 per year as a fellowship trained human doctor specialist.

Not only do human doctors make five times as much in salary, they can pay 5% of the amount towards their student loans. After 10 years, the government COMPLETELY FORGIVES THE LOANS TAX-FREE!

Veterinarians Are Treated Horribly Under Student Loan Rules, and It’s the Federal Government’s Fault

How is this you ask? Human doctors work for not for profit institutions during their training. Therefore, they qualify for super low payments during residency and fellowship that count towards the PSLF program. After 10 years of payments, the federal government forgives their debt tax free.

Veterinarians work in the private sector as there are not many not-for-profit vet hospitals. That means the forgiveness vets get comes after 25 years. Furthermore, the government treats that forgiveness as if someone handed them a check for $500,000. The IRS turns around and tells you that you now owe $200,000 in taxes.

I don’t believe Congress ever worried or thought about the horrible impact on the veterinary profession they had by passing new loan rules. If I was a member of the AVMA, I’d be up in arms. I’d write letters to all of my congressmen and congresswomen demanding equitable treatment for animal doctors and human doctors. The federal student loan program does not work correctly. It’s time for the veterinarian profession to rise up. It’s time to put pressure on elected officials. Veterinarians deserve fair treatment under the law.

My business model here at Student Loan Planner, LLC is providing people student loan advice. I only charge a one time fee. I perform a holistic loan analysis to see what your best available repayment options are. If you are facing a six figure debt burden, I urge you to contact me at travis@studentloanplanner.com.



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77 Comments on "Veterinarians Are Treated Horribly Under Student Loan Rules"

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Jackie Tagliaferro
Guest

Thank you for a very well written article. We have a daughter going to Vet school . Your numbers are accurate and reflect our experiences with a student in Vet school.
AMA has always been a strong lobbying force. That is most likely the main reason why human doctors have such an advantage in both salaries and loan policies.
The only reason to go to Vet school is because it is your true passion not because it’s the best financial decision.

Brian
Guest
Jackie, I left veterinary school after two years. It took that long for the curtain to be lifted back far enough to realize the broken system I was working to join. Once I saw the light I had to get out. Please know that the AVMA is in fact an incredible organization, just like you say, but compared to the ADA or the AMA they have next to no influence. It’s a matter of scale, and quite simply the needs of a few veterinarians are easily outweighed by those of doctors and dentists. For the sake of my friends and… Read more »
Jim
Guest
” believe there is price gouging going on.” This isn’t really true. Veterinary Medicine Colleges are the forgotten step child of the health sciences. These colleges have to run hospitals with ever changing equipment needs, secure facilities and animals for practical courses, and of course have to pay Doctorate level faculty. The funding per student for veterinary education is the lowest of all of the health sciences, therefore these colleges are required to self fund through tuition, self operate their clinics through earnings operations and compete with the graduates they are putting out, and through private endowments and donations. If… Read more »
Don Woodman
Guest

If the assertion that price gouging “isn’t really true” as Jim asserts, but are instead due to issues like the cost of maintaining a teaching hospital then one has to ask why have prices continued to rise at schools that use the distributive model and don’t maintain teaching hospitals just as they have risen at more traditional model schools.

Liz
Guest
I am a vet married to a physician. And while they do have some benefits you mentioned there are some aspects you missed. Physicians graduating now are NOT making 500k out of training, if ever in their careers . At least not if they are ethical and practicing in areas that are at all desirable to live in. Also they make far far less than 80k for all of the years of their post graduation training. Which for most specialists is 6+ years, which is why ibr works so much better for them, their payments are small during training and… Read more »
Anonymous
Guest

Good points in the article. Thanks for writing this. I’m very thankful to be a public health veterinarian keeping our food supply safe and also very thankful that I enjoy the job. FSIS is not a bad place to work and employs around 1000 veterinarians. Definitely not everyone’s cup of tea though.

Bobby
Guest

I too am a vet with FSIS. They are the largest employer of veterinarians in the United States…though I think Banfield may be a close 2nd. See website:
http://www.fsis.usda.gov/wps/portal/fsis/topics/careers/opportunities-and-types-of-jobs/veterinary-opportunities/veterinary-opportunities

There are openings everywhere in this agency so I can’t agree with your statement “Veterinarians Have No Eligibility for the Best Forgiveness Option, PSLF”. I am very thankful that we are eligible for PSLF!!!

Tony
Guest
The system definitely needs to change. I don’t know the right answer. Whether it is interest rates and/or limits on money that can be borrowed based on profession. Our first week of vet school at LSU they had several lectures on student debt. The vet schools know it’s a huge problem. I borrowed at total of $150,000 to finish vet school in 2012. I borrowed the money, and I will finish paying the debt by next year. It is taking me 4-5 years, but I have been hustling to make it happen. I don’t expect the government to forgive my… Read more »
Stephanie
Guest
This is all so very true. It’s an appalling example of the towering cost of education in our country. As a human physician married to a veterinarian we have been blown away by the fact his school is harder to get into, equally expensive and the compensation is not nearly equivalent. I strongly feel that it does in fact have to do with the AMA, possibly the most powerful lobby group. I have long thought veterinarians need to unite and become more politically active. They need to demand a solution. We need to educate politicians about the problem and push… Read more »
Rose
Guest
Directly from the AAVMC “There’s a pervasive myth that getting into veterinary medical school is much more difficult than getting into human medical school, but that’s not supported by the data. ” Please check your facts before complaining that vet school is that much harder to get into. Human doctors graduate with upwards of $500,000 easily and then continue on with 3-5 of residency followed by years of fellowships, just to practice. Do some people go into it for the money? Sure, but most do not. Does it suck that my loans outweighs what I will make in many years… Read more »
Anon
Guest
I’m sorry but I think many of my colleagues need a reality check. There’s a ton of people in this industry that have a huge inferiority complex with respect to human medicine, and people need to understand that veterinary medicine and human medicine are two entirely different industries. It amazes me how students will knowingly take on 300k in loans to land an 80k/year job and then be upset at everyone else but themselves when they’re stuck in debt for decades. No one forced you to do this. Just because you’ve dreamed of doing this since you were 4 and… Read more »
Fred
Guest
I am a Human Resource Manager for a State Department of Agriculture and find it very difficult to find Vets. I’m new in this position but understand the problems that a recent graduate faces because my son is a vet and is experiencing the same inequity. He himself said he couldn’t work for us at the salary we offer, support a family, pay a moderate house mortgage and his student loans. What are we thinking !! A vet in this position ensures the safety of the food we eat. You’re not dealing with companion animals here. It’s serious business. I… Read more »
Anon
Guest

You get what you pay for. Honestly this whole debt situation is really a blessing in disguise since vets will finally start demanding to be paid what our services are truly worth (ie walk away from crummy salaries). That or some public health disaster will happen and the government will shape up their act.

Tory
Guest

Oh my gosh, as an undergraduate senior planning on vet school, this is infuriating. I had no idea that this was a problem and I’m so glad a friend of mine shared this article. Thank you for taking to the time to write this!

Callie
Guest
Hi Tory. I recommend taking a year off after graduation (most schools let you defer for a year) and working full time in practice to make sure it’s what you really want and that you can live with the reality. Talk to the vets and do a budget based on the low end of the starting salary range in the area where you want to live. Factor in paying loans, some of your own professional fees (employers vary in how much they cover; and I pay my own liability/ license defense bc I don’t trust my employer’s plan to put… Read more »
Tony Bartels, DVM, MBA Veterinary Information Network
Guest
Tony Bartels, DVM, MBA Veterinary Information Network
Thanks for pointing out some of the differences we see between physicians and veterinarians in regards to student loan repayment. This is an issue the Veterinary Information Network (VIN) and the VIN Foundation has been studying for a number of years as we’ve counseled and educated hundreds and thousands of veterinary students and those in repayment. We’ve built a student loan repayment simulator that is specific for the veterinary repayment situations that you have described here and it is publicly available at http://www.vinfoundation.org/loansim. I would encourage you to run your “Sarah” REPAYE simulation through it because I get a much… Read more »
Kelsey
Guest

Would love to get your thoughts on what happens when the first round of veterinarians qualifying for PSLF gets their debts forgiven this year (2016) and the government realizes how much money they’re losing? Seems to me that the program is in danger of begin retracted really quickly after this year. As a veterinary student who plans to specialize and remain in academia and would like to benefit from the program if possible, the thought is nerve-wracking…

Anonymous
Guest
I think you understand the idea behind the financial aspects very well, but lack the understanding that is associated with the veterinary side of things. A few things that you had mentioned earlier: First, the absolute last thing we need in this profession is more vet schools. The increase in the number of vet schools, first off, has not lowered the bar on tuition costs. In fact, new vet schools tend to come in at higher than average prices, and many of them don’t offer an IS option. Also, if we keep making vet schools that pump out more vet… Read more »
Bryan
Guest

Well, then don’t become a veterinarian…

Jonathan Dohanich, DVM
Guest
Jonathan Dohanich, DVM
Travis, I read your article with great interest. I graduated from veterinary college in 2008 and thought I would be able to utilize the PSLF program. But life situations and demographics did not allow me to do so in the beginning. I did leave private practice and worked for USDA FSIS for two years, but found the work so intellectually non-stimulating and the governmental bureaucratic red tape nauseating that I had to leave. I do believe that there are a number of issues at play here. First, I have made it a priority to educate young prospective veterinary students about… Read more »
Kathy G.
Guest
Wow – your article is so right-on. Our daughter is a vet. Neither my husband nor I went to a 4-yr college so we stressed higher education to our daughters from a very young age. How proud we were when our daughter got into vet school at a young age. Our state, Connecticut, does not offer any vet studies nor does it have a tuition reduced partnership with any states that do have a vet school. We had not choice but to take out loans. Never in our wildest dreams did we realize the magnitude of those loans when compared… Read more »
Femme
Guest

It does suck that federal options aren’t available, but a ton of individual states do offer forgiveness or repayment programs!

K
Guest
Great article. I am a second career student and was pretty well aware of the financial consequences of taking out student loans at my age (let’s just say if I’m lucky and my family history holds out, I will live to the average age of most Americans.) While I still cringe at the amount I will owe upon my soon to be graduation date, there are a few factors that made it a bit easier to make a decision to quit the slog of being a corporate drone (which I did for 15 years) and delve back into school. First,… Read more »
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