Scholarships and Grants
Unlike student loans, scholarships and grants do not need to be repaid. For more information about the scholarships and grants that may be available, consult your school's financial assistance office.
The American Veterinary Medical Foundation (AVMF) offers several scholarships. View the complete listing on the AVMF's Student Enhancement initiative page. Be sure to check out all the previous year winners and applications for this year by visiting the AVMF Veterinary Scholarship Program page.
If you don't/didn't need to take out loans to finance your educational debt, consider yourself very fortunate, enjoy your situation, and find something better to do with your time than read about educational debt. If you've avoided the need for loans because of sound financial planning throughout your younger years, that's very admirable. However, you're in the minority – 89.9% of year-2010 graduates had accrued educational debt.1
How much money do you need to borrow? Here's a hint: as little as possible! It's easy to sign that piece of paper for thousands of dollars to finance your education at a seemingly low interest rate, but keep in mind that if you repay your loan over an extended time period (which you will likely have to do), the interest you pay could total more than the actual amount of the loan. For example, a loan in the amount of $133,873 will generate $144,877 in interest alone over a period of 25 years – therefore, you will end up paying a total of $278,750 for your loan. FinAid.org provides resources for calculating the interest on a loan (hint: a 10-year, $10,000 loan at 10% interest does not accrue $1,000 or $10,000 in interest).
Don't be afraid to ask for help. Your school's financial assistance office can provide you with counseling and options.
According to FinAid.org, "A good rule of thumb is to borrow about 125% of the difference between your net college costs and the amount of income and savings you can devote to paying those costs, rounded up to the nearest $1,000." FinAid offers a calculator to help you determine the amount you need to borrow.
What kinds of loans are available to veterinary students?
Federal vs. Private LoansFederal loans are funded by the federal government and the maximum interest and fees are determined by the federal government.
The interest rate and fees of private student loans are based on your credit score and may vary depending on the school you attend. FinAid.org provides a list of major private education loans.
Stafford LoansStafford Loans are the most common federal loans. "Direct" Stafford loans are administered by schools and are provided by the U.S. government as part of the Federal Direct Student Loan Program (FDSLP). Private lenders (banks, credit unions, savings and loan associations, etc.) provide Stafford Loans as part of the Federal Family Education Loan Program (FFELP).
Stafford Loans can be subsidized or unsubsidized. The federal government pays the interest on subsidized loans while you're in school, whereas you are responsible for the interest payments on an unsubsidized loan while you're in school; you can, however, defer the interest payments until after graduation. All students, regardless of financial need, are eligible for unsubsidized Stafford Loans, but you must demonstrate financial need to receive a subsidized Stafford Loan.
Subsidized Stafford Loans are less expensive than nonsubsidized loans in the long term, and both are less expensive than PLUS Loans but more expensive than Perkins Loans.
The maximum interest rates and fees for Stafford Loans are set by the federal government. Stafford Loans with a first disbursement after July 1, 2006 have a fixed interest rate of 6.8%. The first payment is due 6 months after graduation. The standard repayment term is 10 years, but you can extend the repayment period by consolidating the loans.
To apply for a Stafford Loan, you must submit the Free Application for Federal Student Aid (FAFSA).
Perkins LoansPerkins Loans are federal loans awarded to applicants with exceptional financial need. Although the pool of Perkins Loan funds is provided by the federal government, the loans are disbursed by the schools. For graduate students, the limit for Perkins Loan disbursements is $8,000 per year. There is a cumulative limit of $60,000 for the combination of undergraduate and graduate Perkins Loans.
Perkins Loans are subsidized loans with a fixed interest rate of 5%, no origination or default fees, and a 10-year repayment period. The first payment is due 9 months after graduation. These loans are the least expensive of the student loans.
To apply for a Perkins Loan, you must submit the Free Application for Federal Student Aid (FAFSA).
Health Professions Student Loans (HPSL)Similar to Perkins Loans, the money for these loans is provided by the federal government. Among other eligibility requirements, students must be enrolled in a school of allopathic medicine, osteopathic medicine, dentistry, pharmacy, podiatric medicine, optometry or veterinary medicine.
As of November 13, 1998, these loans cannot exceed the cost of attendance, including tuition, other reasonable educational expenses, and reasonable living expenses. The interest rate on these loans is 5%. There is a one-year grace period during which interest does not accrue.
To apply for a Health Professions Student Loan, ask for an application form from your school's financial assistance office.
Grad PLUS LoansAlthough "PLUS" is an acronym for "Parent Loan for Undergraduate Students," the PLUS Loan options available to professional students are not for parents.
As of July 1, 2006, professional and graduate students are eligible for Graduate and Professional Student PLUS ("Grad PLUS") Loans. Like Stafford Loans, Grad PLUS loans are funded by the federal government and disbursed through the Direct Loan Program. These loans are not based on financial needs; eligibility is based on your debt-to-income ratio and FICO score, and an adverse credit history could adversely affect your eligibility. As with the Stafford and Perkins Loans, the maximum interest rates and fees are set by the federal government. The interest rate of Grad PLUS Loans is 8.5%. These loans are generally less expensive than private student loans.
The PLUS loan is limited to cost of attendance minus financial aid already received.
Grad PLUS Loans are supplements to federal Stafford Loans - you must max out your Stafford Loan before you will be eligible for a Grad PLUS Loan. To apply for a Grad PLUS loan, you must submit the Free Application for Federal Student Aid (FAFSA).
Consolidation LoansFederal consolidation loans are new loans with new discounts, fees and interest rates, similar to refinancing a car or house. There is often a minimum amount that can be consolidated, but the minimum is often only $5,000-7,500. You can consolidate one loan, but you cannot re-consolidate a consolidation loan unless you are combining it with another loan. You cannot consolidate private student loans in the federal consolidation plan (but you can consolidate private loans), and you cannot consolidate loans prior to graduation. Consolidating loans will not affect your credit rating. FinAid.org provides a list of consolidation loan lenders. Consolidating a Federal Perkins Loan will cause you to lose the subsidized interest benefit.
Contrary to popular belief, you do not need to consolidate your loan(s) to get extended repayment. There is a provision in the Higher Education Act of 1965 [section 428(b)(9)(A)(iv)] that allows extended or graduated repayment period of up to 25 years without consolidation as long as you have accumulated more than $30,000 in federal education debt since 1998.
To determine if consolidation is the correct choice for you, use FinAid.org's Loan Consolidation Calculator.
For more information about consolidation, see FinAid.orgs Frequently Asked Questions about Consolidation, Private Student Loan Consolidation, and Stafford vs. PLUS Loan Comparison Chart.
Where can you borrow money?Your college may be able to provide you with a preferred lender list, based on a number of factors including available counseling, quality of customer service and the speed of problem resolution.
FinAid.org maintains a list of education lenders who offer student loans.
How can you decide where to borrow the money from?
Some relevant information and tips from FinAid.org for choosing a lender and loan:
Tips and information relevant to private student loans:
According to FinAid.org, your best loan application "trio" is as follows:
Regarding private student loans, FinAid.org recommends limiting your loan applications to the following:
For more information, read FinAid.org's "Tips on Choosing a Lender" on its Preferred Lender Lists page and "Choosing a Lender."
Keeping track of your loan(s)Once you've signed the papers and the loan wheels are set in motion, keep track of your loans. You can use FinAid's Student Loan Checklist as a quick-reference for important loan information.
1. Shepherd AJ and Majchrzak S. Employment, starting salaries and educational indebtedness of year-2010 graduates of U.S. veterinary medical colleges. J Amer Vet Med Assoc 2010; 237: 795-798. Available at http://avmajournals.avma.org/doi/pdfplus/10.2460/javma.237.7.795