The amount of debt that vets graduate with compared to their income is a big divide. Plus, like most other things, veterinarian school debt is just getting bigger.
I spoke with Diana Care, a veterinarian for the federal government, about the veterinarian profession, PSLF, and job opportunities for new vet school graduates.
She has concerns about the amount of student loans borrowers are taking on to pay for vet school. Still, many opportunities exist for graduates to earn a decent income and qualify for forgiveness. Public Service Loan Forgiveness (PSLF) could be an option for vets who find jobs in non-profit and government institutions.
Veterinarian student loan debt is on the rise
The American Veterinary Medical Association (AVMA) does an analysis every year of indebtedness and employment of the graduating class. While the data on the website isn’t up to date, Diana Care sent me the most recent stats for 2018.
What stood out to me is that the report ignores undergraduate debt. The reported balance only considers student loans borrowers take out to pay for vet school. The numbers are on the rise.
“Every year, the mean student loan burden that people accrued during vet school is going up,” said Care.
It also doesn’t paint the whole picture.
AVMA reports a mean of around $180,000 for 2018. In the same year, almost 20% of students graduated with no student loan debt at all.
With such a large portion of students graduating with zero debt, the numbers are skewed. It isn’t an accurate representation of what’s going on with vet school students.
“Reporting these average numbers is really deceitful because what we’re seeing is this widening divide between people who either have rich family members who can pay for their education or second career professionals who are selling a house to go through vet school,” said Care.
Caribbean veterinary schools
I hear from readers who want to pursue vet school in the Caribbean. Going some place like the Ross University School of Veterinary Medicine and ending up with $350,000 of debt isn’t the best choice financially.
Care believes the quality of education at Ross is excellent. She knows several vets who went to Caribbean schools and “they’re awesome vets, and they work so hard.”
But student loan debt can quickly get out of control. “I have one friend who owes $577,000,” she said.
Borrowers with vet school debt can take advantage of student loan forgiveness options. Paying 8% of their income over a 20 to 25-year period can get the remaining balance forgiven.
There is the tax bomb to consider, which can take about 10% of your income on top of your student loan payment. It could work out better financially than having to pay back the entire balance.
Still, you must consider your future financial goals. “When you get out the other side, and you want to save for your children’s college, and you want to buy a house – you have these basic life expenses that you may not be able to meet,” said Care.
If you know all the rules and loopholes, you don’t have to be as stressed. Booking a consultation with one of our student loan consultants can help if you’re struggling with student debt right now.
Opportunities for veterinarians in non-profit and government employment
A job in a not-for-profit or government entity is an excellent option for vets looking for loan forgiveness. It qualifies them for PSLF.
“I’m looking at having $200,000 of loans forgiven,” said Care.
She said that getting $20,000 a year of loan forgiveness over the 10 years required for PSLF “offsets the lower salaries that veterinarians typically make, especially when they first start out in the government.”
There are a lot of opportunities in the USDA. “I would encourage people to reach out – if that’s something they’re interested in, call me,” said Care.
You can find her on LinkedIn.
Employer student loan repayment benefits
It’s common for people in the older generation of workers to be unfamiliar with loan forgiveness. If they went to college, they likely paid for it out of their own pocket.
College tuition is much higher now. Sometimes an income-driven repayment (IDR) plan and loan forgiveness is the only option to make it financially.
Because “a lot of people who are older, who are in the government, who are in vet schools don’t know a lot about PSLF, a lot of programs get designed sort of ignoring PSLF,” said Care.
Stop and consider the impact that employer benefits, like signing bonuses or student loan repayment benefits, would have on PSLF.
Care shared an example of a federal program that, for a long time, gave around $10,000 a year for three years towards student loans.
Like many employer-paid student loan benefits, the company wrote a check as one lump sum to the Department of Education once a year. The payment would count as one qualifying payment towards the 120 you need for PSLF.
The real problem is that $10,000 is reported on your W2 as income. Since PSLF payments are calculated according to your income, “the next year, your income-based repayments are going to be higher than they would have been if you had turned the money down,” said Care.
If you want a vet career at the federal government
If you’re considering a career as a veterinarian, “it pays to do your research, and I think Travis is a great tool you can use to get your student loan situation figured out,” said Care.
A job in federal service, like the one Care has for the federal government, is a big incentive. “There are not that many ways that vets can qualify for PSLF,” she said.
Contact her on LinkedIn if you’re interested in a career as a veterinarian at the federal level.