Legislators seek to end tax on veterinary student loan program

Published on April 12, 2017
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A bipartisan effort to repeal the tax on a Department of Agriculture program that pays off student loan debt for veterinarians working in underserved areas of the country was introduced in Congress this March.

The Veterinary Medicine Loan Repayment Program makes practice in underserved rural areas more financially feasible for recent graduates by providing up to $75,000 in loan repayments in exchange for at least three years of service in designated veterinary shortage areas.

The Internal Revenue Service takes 39 cents of every dollar Congress appropriates to the VMLRP, however. If Congress were to repeal the withholding tax as it did for the program’s human medicine counterpart in 2004, the AVMA estimates roughly one additional veterinarian could participate for every three currently enrolled in the program.

More than 350 veterinarians have been placed in 45 states, Puerto Rico, and U.S. federal lands since the VMLRP’s implementation in 2010.

“The VMLRP is a win-win for veterinarians and rural economies because it provides loan relief while also helping alleviate veterinary shortages in areas that lack adequate access to veterinary services for livestock animals,” said AVMA President Tom Meyer. “Unfortunately, the heavy tax applied to VMLRP awards decreases the number of awards that can be made and the number of rural communities that can benefit from increased services.”

On March 1, Republican Mike Crapo of Idaho and Democrat Debbie Stabenow of Michigan introduced S 487, the Veterinary Medicine Loan Repayment Program Enhancement Act, which would end the tax on the program. Companion legislation, HR 1268, was introduced in the House by Republican Adrian Smith of Nebraska and Democrat Ron Kind of Wisconsin the same day.

“Access to animal care is critical to Idaho’s agricultural economy,” Crapo said. “But too often, ranchers and farmers can’t access the care they need because they live in areas where demand for veterinary services exceeds availability. This legislation will increase the number of veterinarians able to serve in the areas where they are needed most, which will help strengthen rural economies and protect the safety of our food supply.”

Kind said large animal veterinarians provide critical services to communities in western and central Wisconsin and are essential to ensuring food safety and the health and welfare of livestock. “However, there are a number of areas across western and central Wisconsin where there is a shortage of veterinarians. This legislation would help our communities attract and retain quality veterinarians in the places of highest need,” Kind said.

The legislation has broad support from more than 160 veterinary, commodity, and agriculture-related organizations.

Learn more about the bill, read stories from program participants, and view infographics and other resources at jav.ma/studentloantax.