The Long & Short of Loan Repayment Programs

By Gina Luke, Assistant Director of the GRD

Shortly before or after achieving their dreams of becoming veterinarians, graduates begin the process of looking for their first professional veterinary position - a position that will, hopefully, meet daily living expenses and help repay their student loans.

Few students, lots of debt
Each year about 2,600 students graduate from veterinary medical colleges across the country. With such a modest number of veterinarians entering the workforce, the competition among employers for the recent grads has become increasingly robust.

The steep competition for the small pool of recent veterinary grads, as a result, makes it difficult for some parts of the country and some types of practice to recruit and retain veterinarians. Data shows that a majority of new graduates continue to enter companion animal medicine, creating a critical workforce shortage in the areas of food animal medicine, food safety and public health. Of the veterinary school graduates from the class of 2007 who choose to begin working in the profession directly upon earning their degrees, just 14 percent choose food supply veterinary medicine, while more than 41 percent choose small animal practice and about 4 percent choose equine practice. About 37 percent of graduates opted to pursue advanced study and incurred more educational debt.

Today's veterinarians graduate with an average of $120,000 in student loan debt. To repay this sum during a standard 10-year repayment term at an interest rate of 6.8 percent, a veterinarian must make monthly payments of $1,381. The monthly payment can be decreased if the borrower chooses to extend the repayment term to 25 or 30 years, but the aggregate amount that they will repay increases.

Because educational debt weighs heavily on the minds of new graduates and can be an obstacle for veterinarians who may otherwise choose certain types of practice, federal and state governments are beginning to use loan repayment as an incentive in recruitment.

National Veterinary Medical Service Act (NVMSA)
One such federal program is the Veterinary Medical Loan Repayment Program (VMLRP), authorized in 2003 by the National Veterinary Medical Service Act (NVMSA) (7 U.S.C. 3151a). Although the program received its first federal appropriation in fiscal year 2006, no awards have been made because the USDA Cooperative State Research, Education and Extension Service (CSREES) had not developed regulations to implement the program. Because AVMA leadership brought this to the attention of Congress, this process is now underway.

The AVMA and the Association of American Veterinary Medical Colleges (AAVMC) submitted testimony to the USDA in September 2008 recommending eligibility and selection criteria for the VMLRP targeted to help veterinarians, particularly large animal veterinarians in rural practice. The AVMA anticipates that VMLRP applications for the inaugural award cycle will be available sometime in spring 2009. AVMA expects that there will be intense competition for a limited number of awards.

FSIS loan repayment program
Since 2007, 28 veterinarians have been awarded loan repayment through another program specifically for veterinarians administered by the USDA Food Safety and Inspection Service (FSIS). The program helps facilitate recruitment of food animal veterinarians for positions designated as hard-to-fill in food safety and supply, especially in rural communities.

For fiscal year 2009, FSIS has budgeted $250,000 for the program and anticipates that they will make about 25 awards to veterinarians. To qualify for the FSIS loan repayment program, a veterinarian must be a newly hired veterinarian. Under this program, an individual with qualifying student loans receives payments of up to $10,000 per year for two years, for a total student loan payment of up to $20,000. The amount, minus any applicable taxes, is applied to the student loan debt directly. Veterinarians participating in the program must be new to the federal government or have had a break of service of at least 90 days. Additionally, veterinarians must sign a three-year service agreement.

FSIS strives to make applying for jobs as simple as possible. Job seekers can use FSIS' online job application system to apply for select jobs. To go to the application, click here. You will be provided step-by-step instructions to complete the application process. There is no deadline to apply for the FSIS loan repayment program, as applications are accepted on a continuous basis. Once a qualified applicant is identified for a position, their application is forwarded to selecting officials in the locations the applicant has expressed interest.

To qualify for the FSIS program, a veterinarian must be a newly hired veterinarian with eligible student loan debt. An eligible student loan is one that has been made, insured or guaranteed under the Higher Education Act of 1965, Title IV Parts B, D, or E or a health education assistance loan made or insured under the Public Health Service Act Title VII Part A or Title VIII Part E.

To find out where these positions are located, visit www.foodsafetyjobs.gov, click on "largest employer of veterinarians" – information is then provided related to recruitment bonuses as well as student loan repayment information. Individuals interested in employment with FSIS should call 1-800-370-3747.

State-offered loan repayment programs
With limited resources available to fund these federal programs, veterinarians and veterinary medical students may wish to investigate state loan repayment programs. Currently, there are thirteen states that offer incentive programs.

Information about these programs is available on the AVMA website. Also, in 2008, the Illinois, Kentucky, New York, South Dakota, Tennessee and Wisconsin legislatures proposed but did not pass legislation to establish veterinary education loan repayment and grant assistance programs, although similar bills are expected to be introduced in 2009 in those states. The measures would create veterinary loan repayment programs in order to increase the number of veterinarians practicing in large animal veterinary medicine in underserved areas. We need your help on this. These state legislators need to be reminded how critical this is to their state's economies by you, their constituents!

For more information, contact Gina Luke at gluke@avma.org.