10 Student Loan Questions Recent Graduates & Aspiring Veterinarians Need Answered
Starting your veterinary career can be expensive. From the insurance that you need, to deciding to purchase a practice out of veterinary school, the costs that go along with helping animals (and their humans) are high.
One of the highest costs is the investment into your education. Most students in veterinary school are taking out student loans. Because the cost of veterinary school is so high, aspiring veterinarians and recent graduates are loaded with student loan debt.
Learning about student loans is the most effective method to manage the debt effectively and become financially healthy. Pursuing your dream of becoming a veterinarian is possible, you’ll just need to be smart about the debt you are taking on.
If you are researching the cost of going into veterinary school, or if you are a resident veterinarian with a large amount of debt, this post is for you. Here are the top ten questions (and answers) on student loan debt.
Feeling overwhelmed with student loan debt as a veterinary resident or aspiring veterinarian surgeon? Loyall Group can connect you with nationally recognized affiliates who can walk you through student loans with expert guidance. Contact Loyall Group today to begin your path forward.
1. What will my potential debt-to-income ratio be when I graduate?
According to this article, there is a rise in debt-to-income ratio for veterinarians. But that shouldn’t deter you from following your dream. After graduation, you can apply for an income based repayment plan with the Federal government or private loan companies.
Find a repayment generator here to gain valuable insights into what your debt-freedom journey might look like, and work with your lenders to make a plan that is affordable. Our team can help you navigate your student loans by connecting you with nationally recognized affiliates.
2. Will my student loans be eligible for forgiveness programs like the Veterinary Medicine Loan Repayment Program?
You’ll need to do some research, or connect with a qualified student loan expert to guide you through the variables. Depending on the type of your loans, the State and area you live and work in, and the type of job you have, you could be eligible for forgiveness. According to the AMVA, there are many forgiveness programs available for veterinarians, each with their own eligibility requirements.
3. What happens if I do get forgiveness for my loans?
Being certain that your loans are eligible for forgiveness is only the first step. Next, you’ll have to research job availability in the area you want to be once you graduate. The Bureau of Labor Statistics projected that veterinary jobs are expected to increase 16% between 2019-2029.
Start building a nest egg of savings for the income tax you’ll need to pay on forgiveness payouts. Because certain forgiveness programs are categorized by the IRS as income and not a gift, you’ll be responsible for paying the taxes on it.
4. How should I use my student loan refund check?
So you received a student loan refund check, a check for an unused portion of a student loan you took out. Before you spend it on your next vacation, consider returning it to your student loan. This will decrease your overall debt. While it feels great to get checks in the mail, this type isn’t free money, it’s borrowed money.
Make sure you are only taking out what you need in loans to get through veterinary school. This will set you up for future income freedom to purchase your dream practice or achieve other goals.
5. Should I put my loans into deferment during residency?
Deferment can keep you from beginning the path to forgiveness through a non-profit or rural program. It can also make your total amount of debt larger because your interest will continue to accrue in deferment. If you are a Veterinary Resident, the default position of your school will be to tell you to defer your loans. Make sure you get expert advice before making this decision.
6. What is the difference between Federal loans and private loans?
Generally, Federal loans have advantages over private loans because they can be eligible for a forgiveness program, have lower interest rates, and may offer a longer grace period. As an aspiring veterinarian, you’ll want to plan to get as many Federal loans as you can before taking out private loans.
For those graduated veterinarians, get to know the loans that you took out. Make a chart with the amount of each loan, the interest rates, whether they are Federal or private, and who they are with. Then, contact a qualified student loan expert who can walk you through the best way to pay back your debt.
7. How can I protect myself and my family from my student loan debt in case I can’t work after school?
For aspiring veterinarians, make sure you are in a place where you can finish school. Because, as this story shows, even if you don’t get a degree, you still have to pay back the loans.
Disabilities can happen to anyone, and most are a result of an unforeseen illness. Even if you can’t work because of a disability, your student loan debt will still have to be repaid. Getting the right disability policy that includes a student loan rider means peace of mind for you and your family.
With some disability insurance carriers, after going through underwriting, you can add either of the following two options:
- Student Loan Rider: For Federal loans that haven’t been refinanced, this rider has a benefit of $2,500 that can reimburse you for up to 15 years.
- Supplemental Disability Rider: Designed to pay up to $2,500 of additional disability benefit for up to 10 years that you can use to pay back student loans or for other purposes during a disability.
These options are extremely inexpensive ways to protect yourself and your family during the point in your career where you have the highest exposure to debt. Ask your insurance professional to show you which disability income carriers have these unique riders.
8. Should I consolidate my loans?
When you consolidate your Federal student loans, you create an easy monthly payment system. It could make your loans easier to pay off, and you will give you more time. And, for Parent PLUS loans, consolidating is the only way to get on an income based repayment plan.
However, you may not save money. More time to pay back your loans means more interest accrued (and paid). And, if you consolidate Federal loans with a private lender, you will lose eligibility for forgiveness programs.
Always investigate where you are currently with your student loans, and where you would be if you consolidated. Putting the pros and cons down on paper will help you see whether consolidating will be the best option.
9. Should I refinance my loans?
Based on your debt-to-income ratio, you may be able to get a lower interest rate when refinancing private student loans. Federal student loans are trickier. Once you refinance Federal loans, you lose all access to the programs they are eligible for. According to the Veterinary Information Network, getting on an income based repayment program could be cheaper than refinancing Federal loans, and with less risk. Contacting a professional is the wisest way to assess your options.
10. How can I achieve my other financial goals after graduating with student loans?
Buying a house, building a savings account, starting a retirement fund … all financial goalposts in life beyond veterinary school. How can you live like a normal person with student loan debt? Learn to be financially fit now.
Whether you have already graduated with $300,000 in student loan debt, or you are an aspiring veterinary surgeon researching paying for school, you can educate yourself and take baby steps towards healthy financial habits. Start at the American Veterinary Medical Association to learn budgeting. Begin building a relationship with a trusted financial advisor to steer you in the right direction.