10 Tips For Veterinarians Paying Back Over $100,000 In Student Debt

(Editor’s note: I am excited to introduce my first guest post, Travis Hornsby of Student Loan Planner!  He was inspired to start his business after seeing the difficulties of student loan repayment first-hand with his physician wife.  He has been featured on multiple podcasts and blogs, and it is evident that he has a passion for his job.  If you need a refresher on repayment plans, read this post first. Edited to add- Student Loan Planner is now a recommended resource on my blog! Find out more on my Student Loan Advice page!)

10 Tips for Veterinarians Paying Back over $100,000 in Student Debt

Vet school is expensive enough without having to make a bunch of mistakes paying your student loans back. According to the AVMA, the average debt for 2016 grads without rich parents was $167,534. About one-fifth of veterinarians leave school owing more than $200,000.

These 10 tips will do a lot to help you minimize the cost of education and maximize the return on your veterinary education. I’ve used many of them with the hundreds of veterinarians paying back student debt who have received my counsel. 

1. Increase Your Retirement Savings

The first place I’d like to start with is retirement savings since veterinarians are not saving anywhere near enough to make work optional by their early 60s in most cases. Because many private practices do not offer 401k plans, doctors have to figure out how to open an IRA on their own.

Even if you saved the maximum of $5,500 a year in an IRA, that’s not going to be enough to retire on. That means you need to find a job that gives you access to a 401k, even if it doesn’t provide an employer match.

I differentiate between DVMs who plan on loan forgiveness vs ones who want to pay their debt back as aggressively as possible. The first group should aim for a maximum $18,500 yearly contribution to their 401k plans. 

Doing so will allow you to build significant assets in a sheltered account and worry less about the student loans not going down. 

If you are refinancing and paying off and refinancing vet school loans, then consider saving at least enough to receive your employer match if it’s offered. Other than that, I suggest paying down your debt as aggressively as possible if that’s the plan you’ve decided on. 

2. Don’t Allow the Debt To Make You Feel Trapped In Your Life

Everyone who’s around the veterinary profession knows about the focus on mental health and supporting each other. It’s super common to feel trapped by the debt and to harbor all kinds of doubts and anxiety about your path in life.

Some veterinarians have told me they don’t think they can have children, take time off from work, buy the house they want, or live a normal lifestyle thanks to their huge student loans.

The good news is that if your debt to income ratio is over 2, then you can plan on forgiveness scenarios that save yourself a bunch of money. You’ll also be able to save for your future and live like a normal person. 

If you owe less than two times your income and plan on paying your loans off in the private sector, you’re also in a good place because you’ll eventually be earning almost two times the national median household income while being debt free. 

There are enough challenges in delivering patient care to let the debt make you feel trapped. Don’t let it.

3. Make Sure Your Lifestyle Doesn’t Reflect Your Education Level

In undergrad, you had to take tons of science classes while your friends preparing for corporate America were hanging out at happy hour. Then, you went through four years’ worth of doctoral level education. Some of you even went beyond that with an intern year or a residency. 

It’s not that you don’t deserve a lifestyle full of material comforts. You can actually buy anything you want as long as you’re conservative with your housing and car purchasing decisions. 

Many veterinarians listen to the banker or car salesperson on how much they can afford in these big-ticket item areas of life. Even though you have a DVM, you want to pretend that you’re a teacher. 

It’s human nature to want to reward yourself for years of sacrifice and delayed gratification. I’m saying that’s ok, but do it with a daily Starbucks routine rather than buying a $400,000 house when you could’ve been happy with a $200,000 house.

I suggest new doctors buy a car on Craigslist in cash for under $10,000 instead of taking on a car payment. 

By minimizing your lifestyle in these key areas, you can go out to eat, travel, socialize, and enjoy life as much as you want practically speaking while handling your student debt well.

4. Practice the Kind of Medicine You Want To

Some veterinarians love emergency relief work and some hate it. Others like working with farm animals and others enjoy dog and cats only. 

There’s a misconception out there that student loans require you to practice medicine in such a way as to be very concerned about your income. Luckily with the flexibility of options like loan forgiveness and refinancing, you can choose the kind of veterinary medicine you want to practice, then figure out a loan plan that matches it.

Too many veterinarians are unhappy in their job choice and justifying it because of their student loans that they want to pay off. Don’t be that person.

5. Include Your Spouse in Your Repayment Plan

If you’re married, your spouse is going to need to play a role in your loan repayment for vet school loans even if you don’t want that.

If you file taxes separately to exclude his or her income from the income-driven payment calculation, then you’ll typically pay more in tax penalties. If you file jointly for taxes, you have to include his or her income in the monthly repayment amount.

Finally, if you get divorced, then the assets are distributed equitably while all the debt stays with you in most cases. Hence, your spouse is highly affected by your vet school debt.

If you’re not planning on having a spiritual marriage where you hold the ceremony but don’t turn in the license (yes this is legal), then being on the same page with your plan is critical to success.

The two to one debt to income rule for forgiveness vs refinancing should include your spouse’s debt and income. So plan together and you’ll save a lot of money.

6. Be Aware of the Veterinarian Student Loan Tax Bomb

Unlike their physician counterparts, veterinarians typically work in the private sector and thus must be prepared to pay taxes on their forgiven student loan debt after 20-25 years of payments. 

In most cases, this tax bomb will range between $100,000 to $300,000 all at once. Luckily, you can prepare for this over time by saving in an investment account in index funds at Vanguard or a robo advisor like Betterment or Wealthfront if you don’t want to make the investment decisions yourself.

As long as you prepare for this tax bomb with monthly savings, you have nothing to worry about if you’re on a veterinary student loan forgiveness track. The folks who I’m scared for are the vets who have never thought about the tax consequences and will be caught unaware.

There’s a chance that Congress passes a bill to eliminate the tax bomb, but I sure wouldn’t bet my financial future on it. That’s like taking your house value and betting it all on red at the roulette wheel.

7. Consider If the Public Service Loan Forgiveness Program (PSLF) Could Help You

Most veterinarians will not benefit from the PSLF program as there is a dearth of not for profit and government jobs in the profession compared to law and medicine.

That said, jobs do exist and it isn’t unheard of to receive a full-time position at a zoo or run a well-funded animal shelter in a wealthy area on the coasts.

Jobs at the FSIS with the Dept. of Agriculture are even more common. 

From what I’ve seen, most veterinarians don’t last for the full 10 years in the food safety line of work if they’re not already passionate about it. You shouldn’t pursue a PSLF eligible job solely because of your vet school loans.

However, if you happen to be a vet school professor, or zoo veterinarian, or working in government, you might as well benefit from this amazing tax-free loan forgiveness program that takes 10 years to obtain. 

8. Apply for the VMLRP Benefit

The Department of Agriculture has a Veterinary Medicine Loan Repayment Program. It awards up to $25,000 a year towards your student loans in exchange for working in a high need area. The cycle is closed for 2018, but you can apply next year on the VMLRP site.

Looking at the most recent report available on the program, veterinarians receive about 50 scholarships each year. I’m not sure if a lot of veterinarians want to live and work in these rural areas because they seem to only receive between 120 and 150 applications a year. 

That’s a pretty good acceptance rate. I would only suggest the VMLRP benefit to a veterinarian who has less than $200,000 of student loans as anyone with more than that will likely not take a direct payback approach. You might as well live where you want and utilize loan forgiveness under PAYE or REPAYE if you owe a ton. 

Not many veterinarians seem to receive the benefit in the second year, so you might think of it as a one-year tour of duty to get an assist in knocking down your loan balance.

Interestingly, Kansas State and Iowa State University account for almost one-third of the awards, so if you apply from another school you might have a good shot. Those two universities must have very proactive financial aid folks.

9. Consider Owning Your Own Veterinary Practice 

There is a huge misconception out there that if you had six-figure vet school debt that you can never own your veterinary practice. Nothing could be further from the truth. 

In fact, becoming a practice owner is the best way to ensure the highest return on investment from your education. Not everyone should be an owner and I want to stress that you do not have to become one in order to achieve a high level of financial security.

That said, you will probably make more money owning your own practice than working as an associate for one of the big corporate vet groups. There is good money to be made in veterinary medicine while still providing high levels of patient care.

To go down the road of practice ownership, network with banks like Live Oak that specialize in veterinary practice lending. Connect with your state association and learn from existing owners on how they’ve become successful.

The next step is to take the plunge. Many veterinarians doubt themselves and don’t have the confidence to own their own practice and take out additional debt when they already owe so much from their student loans and sometimes their mortgage too.

Business debt is different because it’s backed by an asset that you can sell. After a couple years of paying down your business loan, you’d probably be able to sell your vet practice without taking a loss. That means it’s a relatively low-risk proposition if you’ve thought through the decision well.

After decades in practice, you’ll have made significantly more income and you’ll also have an asset to sell that can help fund your retirement.

The icing on the cake is as a practice owner, you can control your taxable income much better than if you’re an employee. This can work perfectly in conjunction with a student loan forgiveness strategy, or the income boost from owning the practice can give you extra money to pay down your debt faster.

10. Get Help if You Need It

You had to go to school for four years (and longer if you’re board certified) to learn how to care for dozens of different species while your med school counterparts learned about 1. Plus, you need to care for your patients who can’t even tell you what’s wrong with them.

You’re highly specialized in what you do, but it’s ok if you’re not into money or financial stuff. If that’s you, there are a bunch of resources out there to help veterinarians paying back student debt, some free and some paid.

You’ll find a ton of articles on my site, Student Loan Planner, dealing specifically with overcoming veterinary student debt. The Veterinary Information Network (VIN) also has some neat tools and calculators as well.

If you wanted a one on one customized student loan repayment plan from Student Loan Planner so you don’t have to worry about your student debt anymore, we’ve made plans for close to 200 veterinarians with a cumulative total of $50 million in student loans. We’ll probably catch something you’ll miss that will save you money.

Don’t be like an ostrich with your head in the sand hoping the student debt will go away. That’s how people lose thousands with a suboptimal strategy. Take charge of your finances and you can live the career and life you dreamed of instead of feeling buried by debt.

Do you have over $100,000 in student loan debt?  Have you followed any of the tips mentioned above? Comment below!


  1. xrayvsn on June 18, 2018 at 10:17 am

    Great tips that span across into the medical profession as well. It took me almost 22 years to pay off my debt from when I first started taking loans out (and 17 years from the day I graduated medical school). I made a lot of mistakes handling this huge amount but you can’t give up and keep plugging away. It was definitely freeing when my account balance turned to zero.

    • Financial Wellness DVM on June 18, 2018 at 3:30 pm

      Paying off any debt, especially student loan debt, is incredibly freeing. I know others can leverage their debt quite well, but I like to keep it simple and just cross that expense off of my balance sheet!

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