How to Manage Veterinary Debt: A Comprehensive Guide
It can be hard to know how to manage veterinary debt.
In the US, veterinary students borrow an average of $183,000 – which, including interest, can accumulate to $246,974 worth of veterinary debt.
Whereas, in the UK, veterinary students borrow an average of £70,000 (this goes up substantially for international students studying in the UK).
Although you could mistake these sums for two down payments on a house – don’t panic, we’re here to help.
In this article, we give you a comprehensive guide on how to manage veterinary debt in 2021- empowering you to take your finances into your own hands*.
Is veterinary debt impacting your mental health? Click here.
An Overview of Veterinary Debt in the UK and US
Obviously, not all veterinary debt is made the same.
In the UK, home students can expect to pay a standard tuition fee of £9,250 a year. Although, this does vary depending on personal circumstance.
Most students take out a tuition and maintenance loan to cover their fees and living expenses, which they’re expected to pay off after university (more on that later).
Since veterinary degrees extend beyond the typical 3-years of undergraduate study (averaging between 5-6 years), UK veterinary students tend to accumulate more debt than the average person.
However, don’t let this perturb you.
Not only do veterinary students have some fantastic career prospects, but in terms of repayment, veterinary students pay off their debt like any other student.
Depending on whether you are on the student loan plan one or two (see below to check) you’ll have a set amount of money that you’ll need to repay every month.
But don’t worry, you don’t need to start repaying until you reach the earnings threshold (which is dependent on whether you’re on plan one or two), and even then, if you have any remaining debt after 25-30 years it’ll be written off!
In the UK, student debt isn’t like other debts, as even though you will have to pay 9% of your earnings back to the government (if you are earning above the threshold), this is automatically deducted from your paychecks every month and has no impact on your credit score.
Unfortunately for our friends across the pond, veterinary debt is a different beast entirely.
Whilst going to veterinary school can be substantially cheaper than studying something like medicine since overall earnings tend to be lower in veterinary care (compared to other medical fields) debts can be proportionally higher.
To become a vet, students must first complete a Bachelor’s degree. After completing their Bachelors, students can then apply to veterinary schools. This is partly why becoming a vet can be so costly, as students essentially have to undertake two degrees before they graduate as a fully functioning veterinarian.
In the US, students can take out two types of loans (federal or private). The vast majority of students take out federal loans, as they tend to have income-related repayment options and borrower protections (read more here).
Private loans on the other hand can be more expensive, as costs are dependent on credit scores and school types. Private loans often do not have the same repayment options or protections as federal loans, making them less desirable for students (see the types of private loans here).
Additionally, to loan types veterinary debts can vary in the US depending on where students go to school. Attending an in-state school can be substantially cheaper for students, and a good way to reduce overall costs.
Something to keep in mind is that whilst starting salaries are above average for veterinarians in both the US and UK, many practitioners find that over time, wages can stagnate. This is an important factor to consider when paying off veterinarian debt, and something you can listen more about here.
How to Manage Veterinary Debt
Collate and Document What You Owe
This may seem obvious, but the first step you need to take to get in control of your finances is having a clear understanding of your outstanding debts.
Understanding what you owe, and what the conditions of your loans are will help you create a plan of action.
If you studied in the UK, go check out what loan plan you’re on (see above), as this will give you an indication of how much money you need to repay.
If you studied in the US, you can look up any federal loans you owe on the National Student Loan Data System or contact your private lenders directly.
Once you know what you owe, write down the conditions of your loan so you know exactly what you need to pay and when. Looking into your repayment options will further help you consolidate the right plan for you.
Work and Study
Whether you’re from the US or UK, one important way you can manage your student debt is by taking a proactive approach whilst studying.
Whilst most student debt is somewhat unavoidable (you can only earn and save what’s within your means) having a part-time job during term-time or during the holidays can be a great way to stay on top of your finances (and out of your overdraft).
Seeing how intensive veterinary courses can be, it’s preferable to find a job that is flexible.
Don’t underestimate how much of a commodity you are. If you are studying veterinary care, odds are that you are an exceptionally gifted student with something that others will pay for- knowledge. Veterinary care is a notoriously hard field to get into, and people will pay for your tutorship (find opportunities in the UK and US here).
Relief vet work can also be especially lucrative for graduate vets with a little bit more experience, and is definitely something to consider in the future.
Not sure how to manage veterinary debt in school? Listen here to get expert advice.
Whilst budgeting can seem like a bit of a drag, having a good financial plan can substantially decrease anxiety and stress in the long-term.
Thankfully with smartphones, financial management has become relatively simple.
Money Dashboard and Bean are especially useful apps that can track your outgoings and ingoings.
It’s also important to note that if you are thinking about taking a big financial investment right now (perhaps getting a car or something along those lines) it might be good to hold off a while. Whilst the added financial burden might seem workable now, it might not be in the future- so think carefully.
In short, to quote money expert and advisor to the veterinary profession Fritz Wood CPA:
‘If you can’t afford it, don’t buy it!’
Financial Tips for US Students
Additionally, some businesses offer assistance with student loan payments as part of the ‘work-perks’, so this is definitely something to keep in mind when looking for your next job.
Some areas will further provide student loan assistance as an incentive for relocation. This is to encourage young professionals to move to areas, such as Detroit, Niagara Falls, N.Y. etc. However, often these schemes have some form of terms and conditions, so it’s good to thoroughly look into them before moving.
Refinancing your loans can be a good way to decrease the amount of interest you pay. Refinancing is when a private lender pays off your existing loans and gives you a new loan with new terms.This is potentially a good option for students who haven’t received federal aid and have a good-income-to-debt ratio.
To find out whether refinancing is an option for you, try using this tool to calculate any savings you could make.
If you’re at the beginning of your veterinary journey, it’s worth looking into scholarships and grants. Check out the American Veterinary Medical Foundation’s (AVMF) scholarship page or the Veterinary Medicine Loan Repayment Program (VMLRP) for potential opportunities.
For more advice on how to manage veterinary debt in the US, listen to this podcast here.
It features Dr Meredith Jones and Dr Phil Zeltzman. Meredith managed to pay off her veterinary debt in five years and offers advice to other vets, whereas Phil is a multi-time business owner, investor and board certified travelling surgeon with a plethora of financial experience.
Whilst learning how to manage your veterinary student debt can seem daunting, it is key for your financial health.
Really taking the time to educate yourself, and look into your options will help you evaluate what works for you.
Getting your veterinary degree is a long-term investment. So don’t be intimidated by the figures, and strategically go through your options. Veterinary school should be for everyone (regardless of background), so don’t let others scare you into not pursuing your dreams.
If you’ve just graduated from veterinary school, we suggest you check our Veterinary Career Success Group. We provide exclusive content for our members, as well as share blog posts and other useful tools. If you’re looking to progress in your career – or just get more advice on this topic, check us out today!
What are you waiting for? Check it out here.
*Please always take independent financial advice from a financial professional. VetX has collaborated with such professionals to bring you this advice, but make no representation that it represents the right advice for you. VetX accepts no liability for actions taken without the advice of a suitably qualified financial advisor.