Making PSLF work for you

Student debt is something nearly every veterinarian faces, no matter what your line of work or area of focus. In 2020, 83% of U.S. veterinary college graduates accumulated debt. The mean debt for veterinary graduates who borrowed was $188,853. For veterinarians in the public and nonprofit sectors, there is a government program that can help you pay off debt: the Public Service Loan Forgiveness program (PSLF).

PSLF, administered by the U.S. government, forgives the remaining debt on eligible loans for borrowers who have worked at least 10 years in public service or the nonprofit sector.

It's a critical resource for professionals who otherwise would be financially unable to pursue—or continue working in—a career in public health or public service. PSLF is a viable option for many veterinary professionals, but there are strict rules about who qualifies. If you're wondering whether the program can work for you, here's what you need to know.

Eligibility

Getting started

Help preserve PSLF

Eligibility

PSLF eligibility is based on three criteria:

Employment

Qualifying for PSLF isn't about the specific job you do, but who you do it for. Essentially, it's intended for government employees and people who work for a 501c3 nonprofit organization. There also are other nonprofits that can qualify for PSLF—if their "primary purpose is to provide certain types of qualifying public services."

Other employment-related details also may affect your eligibility—for example, whether you are working full or part time, and if you are employed as a contractor. This is especially important for veterinarians working in academia or other sectors where our positions may be funded in such a way that we aren’t technically classified as full-time employees.

Check that you meet PSLF employment criteria by filling out an Employment Certification Form. It's a good idea for anyone interested in PSLF to file this form annually because it's the only paper trail you'll have on file with the government during the 10-year timeframe you're working toward forgiveness.

Loan type

Only direct loans from the government can be forgiven through PSLF. Private loans do not qualify. This means that decisions around consolidation and refinancing should be made carefully. For example, direct loans that have been consolidated into private loans no longer qualify for forgiveness through the PSLF program. On the other hand, consolidating a non-qualifying loan, such as a Perkins loan, into a direct government loan, will allow you to start counting payments toward PSLF from the time of consolidation.

You can access a list of your current federal student loans through the National Student Loan Data System.

Payment

The final requirement for PSLF eligibility is that you have made 120 on-time payments in a qualifying repayment plan. In general, this means an income-driven repayment plan (IDR) – a plan based on your income and family size, not your loan balance. Income-driven repayment plans are especially useful for high-debt, low-income borrowers who are looking to make lower monthly payments than they would with a standard 10-year plan. If your debt isn't repaid at the end of the plan term – either 20 or 25 years – the IDR will forgive the remaining balance, which will be taxed as income in the year it is forgiven.

An important note is that the required 120 payments don't need to be made consecutively. They do, however, need to be scheduled. That means you can't accelerate payments, and overpaying won't help you reach forgiveness faster. In fact, extra payments will only decrease the future amount to be forgiven.

Getting started

You can only apply for PSLF after you've made 120 qualifying payments. But if you're considering the program, there are things you should be doing now:

  • File an Employment Certification Form annually. This form will help you (and the government) confirm that you meet PSLF employment criteria and track your payments. Download the form here.
  • Recertify your IDR annually. Document every conversation you have with your loan servicer, including reference numbers or employee IDs for each call. Double-check any information or recommendations provided to you, and keep a spreadsheet of all your payments with dates and confirmation numbers.
  • Be informed and prepared. It's wise to have a back-up plan in case PSLF doesn't work for you. An income-driven repayment plan—which you may already be enrolled in—can be a good option. But it’s important to understand what your back-up plan may look like if you need to use it. For example, an IDR will affect your finances for a longer period and will require saving for the added taxes that come with debt forgiveness. Explore various loan repayment strategies on MyVeterinaryLife.com, which offers a series of learning modules that help you make informed decisions about managing student loans.
Comparing PSLF and IDR

 

Help preserve PSLF

PSLF has come under scrutiny at ties, and concerns about its potential cost continue to be discussed by Congress. There’s also a low approval rate—just over 1 percent—on applications processed since 2017. According to the U.S. Department of Education’s March 2019 report, 53% of denials were due to applicants not having made enough qualifying payments, 25% because of missing information on the application, and 16% because the loans weren’t eligible for the program. However, an overhaul of the PSLF program was announced in late 2021 to improve the process and provide immediate debt forgiveness for qualified borrowers.

If you were denied forgiveness under PSLF because you weren’t in the correct repayment plan, you may be eligible to receive funds under a Temporary Expanded Public Service Loan Forgiveness program.

For people counting on PSLF, questions about its status can be stressful. Among the questions AVMA is asked are whether PSLF will be guaranteed for existing borrowers and whether forgiveness amounts will be capped. These answers aren’t known, but the AVMA is working to get them. Stay informed by following the AVMA@Work blog and signing up for the AVMA Advocate newsletter.

Meanwhile, we are working with lawmakers and federal officials to better understand the issues and improve the program for veterinarians who rely on it. The AVMA opposes any proposal to cap forgiveness amounts, and continues to advocate for the preservation and improvement of PSLF. In July 2021, AVMA submitted comments urging the U.S. Department of Education to be responsive to the needs of graduate veterinarians and veterinary student borrowers.  

You can amplify these efforts by sharing your own story about the PSLF program. Whether you’re a veterinarian currently working in the nonprofit sector or a student relying on PSLF to follow your dreams, we want to know how PSLF—and any potential cuts to it—would impact you. These stories make a real difference in educating Congress and the public about how important this program is. Share your story by submitting this form  on the AVMA Congressional Advocacy Network website.

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