1. The Maryland Veterinarian • Summer 201514 www.mdvma.org
You followed your pas-
sion, graduated from veterinary
school and are working in the
field you love, literally, “in
the field,” for some of you.
But something is amiss. The
enthusiasm for your work is
being drained by the stress of
your student loan obligations.
The veterinary profession
is one that is driven by passion;
a passion ignited at a very
young age by a love for ani-
mals; a passion strong enough
to carry you through the rigors
of veterinary school despite the
costs - and the costs are high.
According to the Ameri-
can Veterinary Medical As-
sociation, the average amount
of student loan debt for a 2013
veterinary graduate was over
$160,000. Considering the
average starting salary for a
veterinary school was approxi-
mately $68,000 for the same
period, it is understandable
that many veterinarians are
struggling to keep up with their
student loan payments.
A common recommenda-
tion is to limit your student
loan debt to your expected
first year salary upon gradu-
ation. At this amount, your
monthly student loan repay-
ment on the Standard 10 Year
Repayment Plan would fall
within 10 percent to 15 percent
of your salary, which should
be manageable. Once your
payment exceeds 15 percent of
your salary, it starts to impact
your ability to accomplish
other goals in your life, such
as; building an emergency
fund and saving for a home or
your own practice. The more
your debt payment exceeds 15
percent, the more it can affect
your financial security. Not
only will it impact your ability
to reach your financial goals,
but it can easily lead to an
accumulation of credit card or
personal loan debt.
If you are reading this
article, you are probably well
aware of the statistics and
feeling the weight of them
personally. The good news is
– there are federal student loan
repayment options available
that may help you lower your
monthly payment to an afford-
able amount.
In addition, there are a
handful of ways in which your
student loan debt might be
reduced or eliminated. Some
of these options can provide
immediate or near term relief
while the benefits from others
may not be realized for 10 -25
years.
A note on deferment and
forbearance
Deferment and forbear-
ance are the federal options
available for postponing your
student loan payments. You
may be able to defer pay-
ing your loans for up to three
years, but you should be aware
of the consequences of choos-
ing this option. Unless you
are able to defer your student
loan payments without accru-
ing interest costs, your debt
will continue to grow while
your payments are suspended,
making it even more difficult
to pay your loans when the
period of deferment or forbear-
ance ends. Even if your loans
are not accumulating interest,
you will be more likely to
make lifestyle decisions that
don’t factor in your eventual
student loan payments. Once
the period of deferment or for-
bearance runs out, you will be
forced to try and fit this “new”
payment into a budget that
may now include a car or mort-
gage payment and may be less
affordable than it was before.
Don’t ignore your debt or put
off making payments thinking
it will get easier to manage in
the future.
Tip #1 – Make paying
off your student loan debt a
priority. Establish a repay-
ment plan, and then build your
lifestyle around what’s left
after making your student loan
payments. This will help you
keep control of your finances
by forcing you to make choices
that are affordable in the long
run.
Tip #2 – Use deferment
and forbearance for emergency
situations only. They can be
valuable tools for navigating a
temporary financial hardship
but repayment should resume
as soon as possible.
Student Loan Default
A federal student loan is
considered in default once it
has been delinquent for more
than 270 days. There are sev-
eral negative consequences to
having student loans in default,
the worst of which may be the
garnishment of your wages or
legal action initiated by the
Department of Education. You
will also be prevented from
obtaining any new loans if you
want to return to school and
will be ineligible for any of the
income derived payment plans
until your loans are brought
current. If you have loans
in default, you have several
options for returning them to
good standing:
• Pay them in full – If this
were possible they prob-
ably wouldn’t be in default
in the first place.
• Rehabilitation – You
make nine full payments
over a 10-month period at
an amount that is agreed
to by the Department of
Education. You can speak
with a Department of
Education representative
at 1-800-621-3115 to work
out a repayment amount
that is affordable for you.
• Direct Loan Consolida-
tion – With this option,
you consolidate your
defaulted loans with other
federal loans and agree to
repay your loan under the
Income-Based Repayment
Plan, Pay as You Earn Re-
payment Plan or Income-
Contingent Repayment
Plan.
If your loans are in good
standing, you may be able to
take advantage of one of the
following forgiveness plans:
Veterinary Medicine Loan
Repayment Program
This federal program
forgives up to $25,000 of
student loan debt for each year
of service, up to three years,
in a designated veterinarian
shortage situation. Each April,
a new set of shortage situa-
tions are posted on the NIFA
web site, found here http://
S T U D E NT L O A N S
Repayment and Forgiveness Options for Your Student Loans
by Phil Getz, Program Manager, Navicore Solutions.

2. 15The Maryland Veterinarian • Summer 2015www.mdvma.org
nifa.usda.gov/vmlrp-map, with
veterinarian applications for
these positions due in June.
Currently there are no desig-
nated shortage areas in Mary-
land, but there are areas in
the neighboring states, which
might provide an opportunity
for any veterinarians who live
near state borders. Also, new
nominations are made each
year, so there could be op-
portunities within Maryland in
2016.
Public Service Loan
Forgiveness
One of the most generous
loan forgiveness programs is
the Public Service Loan For-
giveness Program. Designed
to encourage individuals to
work in areas of public service,
this program offers loan for-
giveness for those working for
government organizations and
qualifying nonprofits.
After a borrower makes
120 payments, while work-
ing full-time at a qualifying
organization, any remaining
balance on their William D.
Ford Federal Direct Loans
will be forgiven. Thirty hours
per week is considered full-
time, so it’s possible that a
veterinarian could fulfill the
time requirement teaching at
a state college or working at a
nonprofit 501(c)(3) organiza-
tion, and put in some time at a
private practice.
Perkins loans and FFEL
loans do not qualify for the
PSLF program; however, they
could become eligible if con-
solidated on a Direct Consoli-
dation Loan. Only payments
made after the consolidation
is complete count towards the
120 qualifying payments, so
it’s important not to include
any Direct Loans that you’ve
been making payments on that
are already counting towards
the 120 qualifying payments.
If you qualify for Public
Service Loan Forgiveness, you
will want to select one of the
Income Driven Repayment
Plans listed below rather than
the Standard Repayment Plan,
otherwise there will be nothing
left to forgive at the end of 10
years.
Your options for repay-
ment will be determined by
the type of loan you have,
the outstanding balances and
the date when the loans were
originated. Following is a
brief description of each of the
repayment plans:
Standard Repayment
Plan – On this plan, your pay-
ment is calculated to ensure
your student loan is paid off
within 10 years. If you can
afford the payment and you do
not qualify for Public Service
Loan Forgiveness, this may
be a good option, as you will
generally pay the least amount
of interest over the life of the
loan.
Graduated Repayment
Plan – With this repayment
plan, your monthly payment
starts lower than the Standard
Repayment Plan, and then
increases every two years. The
payments are calculated to pay
the loan off in 10 years, but
because the initial payments
are lower, you will pay more
interest on the Graduated Plan
than you will on the Standard
Plan.
Caution: The following
plans are attractive because
they allow you to lower your
monthly payment, however,
the extended repayment pe-
riods, which can be up to 25
years, will result in much more
interest being paid over the life
of the loan.
Extended Repayment
Plan – This plan is for Direct
Loans with balances greater
than $30,000, that were taken
out after October 7, 1998. You
may have a fixed or a gradu-
ated monthly payment with
the loan extended for up to 25
years.
Income Driven Repay-
ment Plans – The monthly
payment for these plans is
calculated as a percentage of
your discretionary income.
Your eligibility for each repay-
ment plan depends on the
type of loan you have and the
dates you took out your loans.
You should choose one of the
income driven repayment plans
if you qualify for Public Ser-
vice Loan Forgiveness, since
any balance remaining after
120 payments will be forgiven.
If you do not qualify for PSLF,
then be aware that your lower
payments may significantly
extend the life of your loan,
causing you to pay much more
in interest than the standard
plan. Following are brief
descriptions of the Income
Driven Repayment Plans:
• Income Based Repayment
(IBR) – There are two
IBR plans; one is for loans
taken out prior to July 1,
2014 and calculates your
payment based on 15 per-
cent of your discretionary
income and the other is for
new borrowers who took
all of their loans out after
July 1, 2014 and calculates
your payment based on 10
percent of your discre-
tionary income. The first
IBR plan has a repayment
period of 25 years and
the second, for new bor-
rowers, has a repayment
period of 20 years.
• Pay As You Earn (PAYE)
– Monthly payment is
calculated as 10 percent of
your discretionary income
with a repayment period
of 20 years.
• Income Contingent Re-
payment (ICR) – Repay-
ment amount is based
on 20 percent of your
discretionary income or
what you would pay on
a 12-year fixed payment
plan, whichever is less.
The repayment period for
this plan is 25 years.
Repayment Periods
– Under the three Income
Driven Repayment plans, any
remaining loan balance at the
end of the repayment period
is forgiven. Please note that
forgiven debt may be subject
to income tax except if you
qualify for Public Service Loan
Forgiveness.
Income Verification – Since
your payment on the Income
Driven Repayment plans is
based on your income, you will
have to provide a copy of your
tax return each year to obtain
your new monthly payment
amount. Your monthly pay-
ment will increase or decrease
based on your discretionary
income, but it will never go
higher than the payment re-
quired on the Standard Repay-
ment Plan.
You can retrieve all of
your federal loan informa-
tion at www.nslds.ed.gov and
obtain detailed descriptions
of the repayment plans at
www.studentaid.ed.gov.
If you would like assis-
tance reviewing your student
loan repayment options, please
contact the Student Loan
Counseling Department of
Navicore Solutions at 866-592-
4557.