Author Topic: Undergraduate, veterinary school loans - IBR?  (Read 7229 times)

lanith

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Undergraduate, veterinary school loans - IBR?
« on: June 12, 2015, 09:50:54 AM »
I start veterinary school this fall, and I am planning on using IBR to pay back my veterinary school loans (~200k+) over 20 years.

I also have about $7000 in debt from my undergraduate loans. I just graduated so now the interest is starting to accumulate.

Should I (or is it even possible) to use IBR for both my undergraduate and veterinary school loans? Or should I just fully pay off my undergraduate loan right now? I have just about $7000 in my bank account from working a part time job.

Thanks for the help
« Last Edit: June 12, 2015, 10:00:55 AM by lanith »

ShoulderThingThatGoesUp

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #1 on: June 12, 2015, 09:52:19 AM »
1. Do you have a job now? What do you make?
2. What other debts do you have?
3. What are the interest rates on all of your debt?

lanith

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #2 on: June 12, 2015, 09:59:42 AM »
1. Unemployed, and likely will be for the next 4 years due to veterinary school. I may make about $1k this summer before starting vet school.
2. No other debts.
3. $5k at 6.8%. $2k at 3.86%.
« Last Edit: June 12, 2015, 10:01:40 AM by lanith »

Sibley

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #3 on: June 12, 2015, 10:36:34 AM »
Depending on the type of loans, you may be able to defer them with no interest accrual. That would be best probably for the undergrad if it's an option.

ShoulderThingThatGoesUp

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #4 on: June 12, 2015, 10:44:58 AM »
My gut reaction would be to zero out the $5k at 6.8% and leave the <4% one alone.

ReadySetMillionaire

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #5 on: June 12, 2015, 10:51:24 AM »
I start veterinary school this fall, and I am planning on using IBR to pay back my veterinary school loans (~200k+) over 20 years.

I also have about $7000 in debt from my undergraduate loans. I just graduated so now the interest is starting to accumulate.

Should I (or is it even possible) to use IBR for both my undergraduate and veterinary school loans? Or should I just fully pay off my undergraduate loan right now? I have just about $7000 in my bank account from working a part time job.

Thanks for the help

Stringing out your loans via IBR is not a wise long-term financial strategy if you intend to make significant income in the future, which means that you will pay off your loans anyway (which I imagine you will). I am an attorney that graduated with $150,000 in student loans and weighed the IBR/pay-them-off debate for eight months before I realized IBR/PAYE would cost significantly more money than just paying them off. So here's a (slightly edited) post I wrote several months ago involving math concerning $150,000 in student loans:

First realize that you will be taxed on any amount forgiven when you are done after 20 years. So if you are forgiven $250,000 (which is possible if you make minimum payments), 38% of that is $95,000 in tax liability.

Second, while you are enrolled in PAYE/IBR, the government will only reimburse you for interest on your Subsidized Stafford loans. For me, these are only about 10% of my loans. More importantly, the rest of unpaid interest after three years capitalizes up to 110% of the loan (see here: http://www.ibrinfo.org/what.vp.html). Thus, by not being aggressive early on (and only paying $221 per month), my loan would balloon to over $160,000 easily, despite the forgiveness on my Subsidized Stafford Loans.

Side note: right now, I am enrolled in IBR even though I'm making huge payments. This means for the next three years, I'm barely putting anything towards my Stafford Loans, covering about $10 more than the monthly interest on all other loans (so they don't capitalize), and putting everything else towards my highest interest loans.

Third, PAYE estimates my monthly payment to be $221, meaning there would be almost $600 in interest being added each month. What happens if I get a job paying $100,000 per year in the near future? Now my payment shoots up to $604 and I'm still not gaining ground on the interest. I'll get to the math later on why this is bad.

Fourth, investing instead of paying off debt makes sense only when you can get returns in the market that exceed the interest rates on your loans. I'm a believer in passive investing, which returns 7-8% over the long haul...but what if the economy takes a hit in year 20 when your tax liability is due? Even worse, do you really want to have to guess and switch all your investments to bond index funds a couple years before your tax liability is due and perhaps miss out on huge returns in a bull market? This makes PAYE/IBR a HUGE gamble to me.

And this leads me to my fifth and most important point: I can't risk this plan with the hope that the government will amend the tax bill. This is for two reasons. First, the entire program becomes insolvent if you remove the tax burden. This would lead to even more increased tuition and outcries from a younger generation. Second, and more importantly, the present tax code accounts for people who really can't afford the tax liability. The IRS fact sheet on forgiven debt (http://www.irs.gov/pub/irs-pdf/p4681.pdf) provides, basically, that you are only accountable for forgiven debt to the extent that it exceeds your assets. So say the average Joe is on PAYE and paid for 20 years, thus allowing his loan to balloon to $250,000. Fortunately, because he's an average Joe and not a mustachian, all he has is a $150,000 house and $100,000 in his 401k. That means that his assets are equal to his forgiven debts and he therefore has no tax liability.

Of course, there are a lot of variations to this. But the point is that (1) the tax code already accounts for people who can't pay the tax liability and (2) the "tax bomb" problem people say will happen in 20 years isn't as bad as people think.

In Mustachian terms, however, this tax break wouldn't apply to you because you've been socking away money in a traditional brokerage account for 20 years (i.e., your assets would significantly exceed your forgiven debt). Thus, you would probably be the exception in having to actually pay the full tax liability.

Which leads me to the math.

The government estimates a 5% raise, which I think is fair. They estimate I'll pay $102,000 principal over the life of loan and have $249,000 forgiven.

Since I'll be stocking away money, my assets will dramatically exceed my liabilities, so I'll have to pay the full tax liability. Assuming a 38% tax bracket (which is certain given that the forgiven debt alone is $249,000), that comes to $94,620. So all in all, I'll have paid $196,620 towards the loan, or around the same amount if I just paid this off in 8 years.

But let's go even further. Let's look at everything else.

First, deductions lost because you had to file separately (this isn't negotiable for me...my GF makes substantially more than I do, and if I eventually made $100,000 per year, our incomes together would put me at a $1104 payment, or enough to pay the loan before it's forgiven).

Student loan interest deduction = $2500. Assuming 20 years of this and 25% tax bracket, you've missed out on either a deduction to your tax liability every paycheck or a $625 refund check from the feds every year.

Dependent care credit = $3000 per year per kid. Assume two kids (my plan) so $6,000 per year. Now you've missed out a $6,000 deduction on your taxable income or a $1,500 refund every year.

Married credit = $14,200 per year (compared to $6,200, which only one of you or your spouse can claim if you file separately). That's an $8,000 difference in taxable income per year, or $2,000 in cash.

There are more than these three, but these are the three biggest ones. And putting your spouse in the equation (since he or she is filing separately as well), you're looking at $25,000 in lost deductions per year for 20 years ($500,000!!!). Again, assume a 25% tax bracket, and we're talking $125,000 in income taken out of your paychecks or tax refunds.

So now we're at your $196,020 in paying towards the loan plus $125,000 in lost deductions.

I feel like Billy Mays here--BUT WAIT, THERE'S MORE. Let's go back to the tax liability. Assume you've been throwing what would have been your student loans into an investment account, and now you need to cover your tax liability. Now you actually need to withdraw 16% more than your tax liability to cover capital gains, meaning you'd actually need to withdraw $111,383 to cover the tax liability.

Now we are at $102,000 principal payments + $125,000 in lost deductions + $111,383 to cover tax liability. Total cost is $338,383.

And by this 20th year, you've just substantially depleted your investment account when you are 47. You also haven't been able to contribute to a Roth IRA (since you can't when filing separately).

And I'll end on this: no matter what you guys are saying, IBR and PAYE will make you a slave to your loans more than paying would. Every financial decision you make will revolve around your payment and your tax liability for TWENTY YEARS. You also have no idea what will happen in terms of income--what if you've let interest balloon for ten years, but then you become a member of an incredibly lucrative LLC that nets you $500,000 income per year? Now you might not have a financial hardship and your loan would capitalize. Sure, you can pay off your loans with that much income, but my word, that will be WAY MORE than if you had just taken care of it.

Put most simply, IBR and PAYE are huge gambles due to the unknown tax liability, having to file separately, lost deductions, inability to forecast income, and having to pay capital gains when you pay the tax liability. In the meantime, you CAN start making dents on your loans NOW if you put your mind to it and take control of the situation. If I pay my loans off in 8 years and maintain my lifestyle afterwards, using MMM's chart, I'll be about 7-10 years away from retirement. And that's way more optimal to me than risking everything on IBR/PAYE.


Now, with all of that said, here's my advice...

I had a blast in undergrad and law school, but damn do I regret living off my loans like the party would never end. Please don't make the same mistake as me.

Live as frugally as you possibly can. Work part time as much as you can. Limit the amount of loans you take out. Do everything you can to earn scholarships. Get the best possible grades you can.

And when you graduate, obliterate your loans.
« Last Edit: June 12, 2015, 01:03:20 PM by ReadySetMillionaire »

TrulyStashin

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #6 on: June 12, 2015, 11:11:17 AM »
^^^^  Exactly.  RSM, you're a good egg for putting so much time into that post. 

marcela

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #7 on: June 12, 2015, 11:30:54 AM »
Others have covered the financial part of this pretty thoroughly, so my only advice to you is to ignore what some people will tell you and only take out the minimum you can in loans. You are on this forum so I'm guessing your expenses will be lower than the average student and there is no reason for you to be paying interest on money you won't even need. Also see if your school has already set up a facebook page where you can connect with other incoming first years and even some upperclassmen. This will help you decide what is worth spending money on and what not to. Often upperclassmen will be willing to sell/give you some of the "required" items or can point you in the direction of a cheaper alternative. Do't worry about not showing up to your first day with all your books and lab equipment etc purchased.
Lastly, good luck!! Vet school is tough and there will be times when you will want to pull your hair out, but it's worth it in the end.   

charis

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #8 on: June 12, 2015, 11:41:08 AM »
I totally agree about not stringing your student loan debt on the IBR out over 20 years.  I am also confused as to why you would go $200K into debt for job that you expect to pay so little that the IBR would be beneficial to you.   That makes no sense to me.

I am currently on the IBR, so I don't have an issue with the plan itself.  But the debt is less than half of yours and qualifies for PSLF forgiveness (my only interest is public service/govt).   Also, we file jointly, live on one income, and are/will be investing the other income in tax deductible retirement accounts.   We are able to itemize our deductions, keep our AGI low, and max our retirement investing with money we could be using to pay the loans aggressively.  So it can be done, but only if exact circumstances line up.




lanith

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #9 on: June 12, 2015, 01:31:21 PM »
I totally agree about not stringing your student loan debt on the IBR out over 20 years.  I am also confused as to why you would go $200K into debt for job that you expect to pay so little that the IBR would be beneficial to you.   That makes no sense to me.

I am currently on the IBR, so I don't have an issue with the plan itself.  But the debt is less than half of yours and qualifies for PSLF forgiveness (my only interest is public service/govt).   Also, we file jointly, live on one income, and are/will be investing the other income in tax deductible retirement accounts.   We are able to itemize our deductions, keep our AGI low, and max our retirement investing with money we could be using to pay the loans aggressively.  So it can be done, but only if exact circumstances line up.

Thanks everyone for the great responses. I seriously appreciate it.

I am considering IBR because a veterinarian's salary is only about $50-60k starting, and the average salary is about $80k. With this salary I just don't consider it realistic being able to ever pay off $200k in loans.

Again, thanks everyone.
« Last Edit: June 14, 2015, 01:01:56 AM by lanith »

ShoulderThingThatGoesUp

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #10 on: June 12, 2015, 01:33:03 PM »
Why are you becoming a veterinarian?

lanith

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #11 on: June 12, 2015, 01:36:30 PM »
Why are you becoming a veterinarian?

Not for the money, as I'm sure you've guessed by now. It's something I really find rewarding, I've worked in an animal hospital for 5 years and want to make it my career.

ReadySetMillionaire

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #12 on: June 12, 2015, 01:44:35 PM »
I totally agree about not stringing your student loan debt on the IBR out over 20 years.  I am also confused as to why you would go $200K into debt for job that you expect to pay so little that the IBR would be beneficial to you.   That makes no sense to me.

I am currently on the IBR, so I don't have an issue with the plan itself.  But the debt is less than half of yours and qualifies for PSLF forgiveness (my only interest is public service/govt).   Also, we file jointly, live on one income, and are/will be investing the other income in tax deductible retirement accounts.   We are able to itemize our deductions, keep our AGI low, and max our retirement investing with money we could be using to pay the loans aggressively.  So it can be done, but only if exact circumstances line up.

Thanks everyone for the great responses. I seriously appreciate it.

I am considering PBL because a veterinarian's salary is only about $50-60k starting, and the average salary is about $80k. With this salary I just don't consider it realistic being able to ever pay off $200k in loans.

Again, thanks everyone.

Wrong attitude.

(1) You don't have to take out $200k in loans. Do everything in your power to take out less (work part time, scholarships, go to a local and perhaps lesser ranked school*, etc).

*Side note: you might want to consider taking a year off between undergrad and vet school. It will allow you to build up some cash and, more importantly, might allow you to take the entrance exams again and get better test scores. I know, seems like a drag to do the application process all over again, but isn't a few weeks of studying worth potentially tens (and even hundreds) of thousands of dollars?

(2) I make $47,500 per year and am paying off $150,000 in loans. You can do it.

marcela

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #13 on: June 12, 2015, 02:02:13 PM »
I totally agree about not stringing your student loan debt on the IBR out over 20 years.  I am also confused as to why you would go $200K into debt for job that you expect to pay so little that the IBR would be beneficial to you.   That makes no sense to me.

I am currently on the IBR, so I don't have an issue with the plan itself.  But the debt is less than half of yours and qualifies for PSLF forgiveness (my only interest is public service/govt).   Also, we file jointly, live on one income, and are/will be investing the other income in tax deductible retirement accounts.   We are able to itemize our deductions, keep our AGI low, and max our retirement investing with money we could be using to pay the loans aggressively.  So it can be done, but only if exact circumstances line up.

Thanks everyone for the great responses. I seriously appreciate it.

I am considering PBL because a veterinarian's salary is only about $50-60k starting, and the average salary is about $80k. With this salary I just don't consider it realistic being able to ever pay off $200k in loans.

Again, thanks everyone.

Wrong attitude.

(1) You don't have to take out $200k in loans. Do everything in your power to take out less (work part time, scholarships, go to a local and perhaps lesser ranked school*, etc).

*Side note: you might want to consider taking a year off between undergrad and vet school. It will allow you to build up some cash and, more importantly, might allow you to take the entrance exams again and get better test scores. I know, seems like a drag to do the application process all over again, but isn't a few weeks of studying worth potentially tens (and even hundreds) of thousands of dollars?

(2) I make $47,500 per year and am paying off $150,000 in loans. You can do it.

It sounds like OP has already gotten into vet school since s/he mentions that they will be starting in the fall so advice to take a gap year/ choose a cheaper school aren't really applicable in this situation.

Scholarships are less likely in vet school, but there are some out there. Don't fall into the trap I see often where you don't apply for a scholarship because at $500-$1000 it would only be a drop in the bucket for your overall cost of education. Every dollar counts, especially since it sounds like you might be going to an out of state school. On the other hand, I would advise you to NOT seek out much work during the school year. I know this sounds super counter-mustachian, but we've seen people have to repeat a year because they had part time jobs and weren't able to keep up the with classes. Trying to earn a couple thousand is not worth having to pay another year's worth of tuition and graduate even later.

lanith

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #14 on: June 12, 2015, 02:06:59 PM »
I totally agree about not stringing your student loan debt on the IBR out over 20 years.  I am also confused as to why you would go $200K into debt for job that you expect to pay so little that the IBR would be beneficial to you.   That makes no sense to me.

I am currently on the IBR, so I don't have an issue with the plan itself.  But the debt is less than half of yours and qualifies for PSLF forgiveness (my only interest is public service/govt).   Also, we file jointly, live on one income, and are/will be investing the other income in tax deductible retirement accounts.   We are able to itemize our deductions, keep our AGI low, and max our retirement investing with money we could be using to pay the loans aggressively.  So it can be done, but only if exact circumstances line up.

Thanks everyone for the great responses. I seriously appreciate it.

I am considering PBL because a veterinarian's salary is only about $50-60k starting, and the average salary is about $80k. With this salary I just don't consider it realistic being able to ever pay off $200k in loans.

Again, thanks everyone.

Wrong attitude.

(1) You don't have to take out $200k in loans. Do everything in your power to take out less (work part time, scholarships, go to a local and perhaps lesser ranked school*, etc).

*Side note: you might want to consider taking a year off between undergrad and vet school. It will allow you to build up some cash and, more importantly, might allow you to take the entrance exams again and get better test scores. I know, seems like a drag to do the application process all over again, but isn't a few weeks of studying worth potentially tens (and even hundreds) of thousands of dollars?

(2) I make $47,500 per year and am paying off $150,000 in loans. You can do it.

Well I just recalculated how much I theoretically will be taking out in loans. It's actually $189k, so that's a little better. I didn't mention earlier, but this figure includes all expenses, not just tuition (room and board, fuel, supplies). I definitely will be applying for scholarships and I'll consider working part-time if I can get a handle on the workload. Shockingly this school is one of the cheapest option available to me in the US. My in-state school (California) actually ends up being roughly $50k more in total to attend when considering cost of living. The state of veterinary education in the US is currently pretty bad due to the income to debt ratio.

I'm going to speak with my dad and see if I can have him partially contribute to the cost of my education. I hadn't really considered this before because I was dead-set on IBR.

Thanks.

charis

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #15 on: June 13, 2015, 01:52:34 PM »
Keep your cost of living expenses as low as possible so you aren't borrowing for this as much.  Living in a cheap neighborhood with several roommates will help.  Consider waiting tables or bar tending fri and/or sat nights while you are in school - that shouldn't cut too much into study time and you can pick up extra shifts during breaks.  Also do this even after you graduate and have a job.  You can pay those loans down much quicker with a second income source.  You should working as much as you can this summer to pay off that undergrad loan. 

chasesfish

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #16 on: June 13, 2015, 05:58:43 PM »
So...I hate to chime in here, but I'm married to a veterinarian who's enjoying early retirement after 7 years of living hell in the profession.

Veterinarians have a very high suicide rate because of what you said:  High student loan debt + low salaries.   You should really think about if you really need to take out 50k/year (are you going to a private vet school) and have a plan to pay this back.  Emergency care pays more, food animal medicine pays more, and start learning how to own/run a business.  1 out of 10 vets are decent business owners and actually make real money in this profession.

chasesfish

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #17 on: June 13, 2015, 05:59:51 PM »
and regarding working during school, you have two summers and three years without rotations and can hold down some part time work.  You can't in year 4

Civex

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #18 on: June 13, 2015, 09:54:46 PM »
My (probably unwanted) opinion. I don't think you should enter into a contractual agreement with the intent/plan to not fulfill it. I understand it is a business arrangement, it just sits very wrongly with me. It is smart of you to consider all your options, but I advocate for the responsible use of credit.***

As a professional degree holder, my advice would be to attend your state's school; if you don't have a state school, many states have agreements to give residents from other states a very close to state resident cost. I would also practice the advice/ethos of this site, and live a financially efficient life to minimize loans, so that upon graduating you can pay them back over a 10 year period. There are also places in the country where the average DVM salary is higher than your projections; if you take out large loans, consider practicing in a higher paying area for a few years, or as other posters have mentioned, invest in the business end.

I'm a little surprised with the other responses in this thread- if a poster were to say they were planning on taking out $100k in loans for [insert degree that pays a starting wage of $25k], I think the advice would be much different.

I do believe veterinarians are extremely underpaid for their knowledge and skill set- I hold any person in high regard that can understand, diagnose, and treat  on a daily basis the huge variety of patients they see and we need excellent DVMs. Whatever you choose to do, I wish you the best of luck.

***At the orientation for my position, they brought in a financial planner who went over the advantages and disadvantages of IBR. Honestly, it was disheartening to hear well paid professionals planning on not repaying their debts.
« Last Edit: June 13, 2015, 10:01:31 PM by Civex »

Mirwen

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #19 on: June 13, 2015, 10:33:39 PM »
A close friend's sister is finishing Vet school.  Congrats on getting in, it is very competitive.

This acquaintance got some sort of deal where they pay a significant portion of her schooling in exchange for agreeing to work in Nevada for 5 years after finishing school.  Nevada pays much higher than average wage, so it works out.  I have no idea who "they" are or the details of the arrangement, but there must be some programs like this out there.  Do some research and find out for yourself. 

Long term, if you want to make any money as a vet, you need to run your own business.  Is that what you want to do?  How good is your business acumen and management skills?  Is that something you want to develop? 

I majored in biology and I knew a lot of people who wanted to be a vet, but all decided against it because it didn't make financial sense.  You are sacrificing a lot by choosing this path,  make sure it's the right one for you.

lanith

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #20 on: June 14, 2015, 01:25:16 AM »
My (probably unwanted) opinion. I don't think you should enter into a contractual agreement with the intent/plan to not fulfill it. I understand it is a business arrangement, it just sits very wrongly with me. It is smart of you to consider all your options, but I advocate for the responsible use of credit.***

As a professional degree holder, my advice would be to attend your state's school; if you don't have a state school, many states have agreements to give residents from other states a very close to state resident cost. I would also practice the advice/ethos of this site, and live a financially efficient life to minimize loans, so that upon graduating you can pay them back over a 10 year period. There are also places in the country where the average DVM salary is higher than your projections; if you take out large loans, consider practicing in a higher paying area for a few years, or as other posters have mentioned, invest in the business end.

I'm a little surprised with the other responses in this thread- if a poster were to say they were planning on taking out $100k in loans for [insert degree that pays a starting wage of $25k], I think the advice would be much different.

I do believe veterinarians are extremely underpaid for their knowledge and skill set- I hold any person in high regard that can understand, diagnose, and treat  on a daily basis the huge variety of patients they see and we need excellent DVMs. Whatever you choose to do, I wish you the best of luck.

***At the orientation for my position, they brought in a financial planner who went over the advantages and disadvantages of IBR. Honestly, it was disheartening to hear well paid professionals planning on not repaying their debts.

This is my cheapest option, actually. Even cheaper than my state school (California, go figure). I'm going to one of the least expensive veterinary schools in the US.


So...I hate to chime in here, but I'm married to a veterinarian who's enjoying early retirement after 7 years of living hell in the profession.

Veterinarians have a very high suicide rate because of what you said:  High student loan debt + low salaries.   You should really think about if you really need to take out 50k/year (are you going to a private vet school) and have a plan to pay this back.  Emergency care pays more, food animal medicine pays more, and start learning how to own/run a business.  1 out of 10 vets are decent business owners and actually make real money in this profession.


I'm definitely going to keep my options open in veterinary school and consider areas other than small animal medicine. I do hope to work during summers and am considering part-time work much to the chagrin of my academic advisors. I am not considering owning my own practice right now. I plan on working as an associate veterinarian for a (likely corporate-owned) small animal hospital (starting salary: 69k, average salary: 95k).

The whole reason I made this post is because I really was wondering if I should just accept my grim fate and not pay off even of my undergrad loans right now, as they can be put on IBR too along with my veterinary loans. You guys have convinced me that I should at least pay the undergrad loans off ASAP.

With some slight financial assistance from my parents, I'm going to try and wiggle my amount borrowed down considerably. The $189k figure is a worst-case scenario. If hypothetically I were able to get it down to $150k, is it realistic to pay that off without IBR on a 95k salary at 6.8% interest?
« Last Edit: June 14, 2015, 01:27:25 AM by lanith »

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #21 on: June 14, 2015, 04:53:29 AM »
If you are planning to take out loans for living expenses, it might not make sense to pay off all of your undergrad loan right now, particularly the lower interest one. Instead, you could take out less money in new loans and use your savings for living expenses. This depends on interest rate, subsidized vs unsubsidized etc.

chasesfish

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #22 on: June 14, 2015, 06:41:06 AM »
Of course you're able to pay off $150k in 30 year debt if you make the right income and expense choices.

I think going into private practice/small animal is the lowest paying of the bunch.  You'll really want to consider grinding out emergency medicine for a couple of years.  If you're going into this profession to help animals, as most vets would say, that's where "real" medicine happens.  Its more exciting than expressing anal glands and arguing with clients who think Dr. Google is their veterinarian.

justajane

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #23 on: June 14, 2015, 07:01:34 AM »
If hypothetically I were able to get it down to $150k, is it realistic to pay that off without IBR on a 95k salary at 6.8% interest?

Absolutely. ReadySetMillionaire has already mentioned that he or she is paying off that amount on half that income. How much time have you spent on here? My perception is what you think is possible or not has not really been influenced by the MMM philosophy but by mainstream and consumerist culture. If you actually implement the advice on here, you will be surprised how fast that debt disappears. But you have to be willing to sacrifice in the short term.

IMO 25 years of that kind of debt hanging over my head  sounds terrible both psychologically and financially. There are many, many people on here who have talked about how IBR is a lose, lose proposition for most people. Not only are you at the mercy of all kind of changes to the program and the tax law, you might unconsciously pass up higher income so that you can stay in the program and contribute less to your loans. It sounds like slavery to me, but I recognize some people view it differently.

Dee18

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #24 on: June 14, 2015, 12:35:17 PM »
I teach grad students and I am amazed at how many borrow for room, board, and Starbucks.  I urge you to only borrow tuition.  Live in a group house, live with an elderly person, care for pets/dog walk in exchange for cheap rent.....there are many, many ways to live economically.  Work part time.  I know you will have to study a ton and will have long labs, so look for a job waiting tables at nights and on weekends where you can make good tips.  This will be a break from studying...and no one studies all the time.  Or look for tutoring jobs for all the kids dreaming of being a vet.

Best advice I ever got was "borrow only tuition."  I'm so glad I listened as I was able to okay off my loans and take the job I loved....and proceed to build my stache.

startingsmall

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #25 on: June 14, 2015, 08:51:39 PM »
So...I hate to chime in here, but I'm married to a veterinarian who's enjoying early retirement after 7 years of living hell in the profession.

Veterinarians have a very high suicide rate because of what you said:  High student loan debt + low salaries.   You should really think about if you really need to take out 50k/year (are you going to a private vet school) and have a plan to pay this back.  Emergency care pays more, food animal medicine pays more, and start learning how to own/run a business.  1 out of 10 vets are decent business owners and actually make real money in this profession.

I hate to be a killjoy, but count me as another extremely disgruntled veterinarian.  Currently 9 years into the profession and desperately seeking a way out.  It sounds like you've already made up your mind and therefore it's probably too late for us to talk you out of it.... but if there's any voice in the back of your mind that's giving you pause, LISTEN TO IT.  If I knew how much I'd dislike going in to work every day, I'd have found a more lucrative profession.  As my dad says, "they call it WORK for a reason."   Being a vet isn't always terrible, but most days are unpleasant and something to be endured.... just like every job.  At least those desk jobs that always struck me as so boring at least give you the flexibility to call in sick when needed, take vacation time, etc!  At this point, I really am just punching a clock and 'in it for the money'....  and we all know the money in vet med isn't that great.  It's not the worst job out there, but it's not pleasant enough to make up for the pay.  I'd rather either be making less money in an enjoyable/rewarding job, or making more money in a similarly sucktastic job. 

Have you taken a look at the VIN Student Loan Repayment stuff? 
 http://www.vinfoundation.org/AppUtil/document/default.aspx?pid=0&catid=&objectid=24357&objecttypeid=10&redirectFromMiscDefault=1

Also, not sure if you're already on Student Doctor Network, but you may find some of the discussions over there to be helpful.
http://forums.studentdoctor.net/forums/veterinary.164/

Regarding part-time work during vet school, I taught GRE/SAT prep classes for The Princeton Review.  Except for the semesters that we were on clinics, I was typically able to work 5-10 hrs/wk pretty easily and the job paid well ($19/hr, and that was 9 years ago).  Flexible scheduling, too.... course schedules were posted at the beginning of the semester and you could sign up to teach as many or as few as you felt that you could handle.  Hands down, the BEST job that I've ever had!  (Maybe that should have been a hint that vetmed was a mistake, but I had this vision that I'd be doing a lot of educating in my role as a veterinarian.  Damn you, Dr. Google for taking that away from me and making all of my clients 'experts' who refuse to listen to a word I say.) Anyway, The Princeton Review, Kaplan, etc is definitely worth looking into.
« Last Edit: June 14, 2015, 09:04:58 PM by startingsmall »

startingsmall

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #26 on: June 14, 2015, 09:16:51 PM »
A close friend's sister is finishing Vet school.  Congrats on getting in, it is very competitive.

Interestingly, getting into veterinary school is not all that competitive anymore.  Current applicant:seat ratio is about 1.6:1, according to the latest AVMA stats.  People are starting to wise up to the financial situation in vet med.
https://www.avma.org/News/JAVMANews/Pages/150501o.aspx

chasesfish

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #27 on: June 15, 2015, 06:10:12 AM »
Applications are still flat to rising, they've just increased capacity by 60%.  This is only perpetuating the problem of low salaries and heavily indebted students.

marcela

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #28 on: June 15, 2015, 08:08:04 AM »
A close friend's sister is finishing Vet school.  Congrats on getting in, it is very competitive.

Interestingly, getting into veterinary school is not all that competitive anymore.  Current applicant:seat ratio is about 1.6:1, according to the latest AVMA stats.  People are starting to wise up to the financial situation in vet med.
https://www.avma.org/News/JAVMANews/Pages/150501o.aspx

The ratio has dropped due to more institutions being counted. The new number includes international vet schools that have artificially inflated the number of seats open. Most students are not looking to go abroad for school and so it isn't fair to count those spots when talking about how competitive it is to get into a US school. When you only look at the US schools you are still looking at approximately half the applicants not getting into any US school.

Some US applicant statistics pulled from the institutions own websites
For the incoming class of 2019, UF had 848 applicants and only 111 seats, leading to a 7.6% chance of getting in. Last year UGA had 976 applicants for 114 spots, 8.56% chance. LSU 809 applicants, 86 spots, 9.4% chance. NCSU 905 applicants, 100 spots, 9.05% chance.

The numbers are even worse if you come from a state that does not have it's own school and are forced to complete for extremely limited out of state or contract spots.

So all in all, good job Lanith on getting in!

startingsmall

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Re: Undergraduate, veterinary school loans - IBR?
« Reply #29 on: June 15, 2015, 11:08:45 AM »
There are definitely still competitive programs out there,  but 'getting into vet school' in general is no longer all that difficult.  Looking at individual school acceptance rates fails to take into account the fact that most people apply to several schools.  And while there hasn't yet been a massive decline in annual applications,  I consider the leveling off to be an indication that things are likely changing. I know very few veterinarians who pursue others to pursue the profession at this time. Maybe that's just my area, but seems to be pretty typical of my other c/o 2006 classmates in other part if the country as well.
« Last Edit: June 15, 2015, 11:11:50 AM by startingsmall »