Vet Success Stories: An ER vet hustling to pay off $118k in student loans

This ER veterinarian, who resides in New England with her 2 cats and a dog, recounts her journey as she is well on her way to paying off $118k in student loans.  A little spoiler: this loan payoff could have been done earlier, and she considers herself debt-free. Read on for more details!

1. Give us a little of your background and how you got started in veterinary medicine.

I’ve wanted to be a veterinarian since before I can even remember.  I did briefly consider becoming an astronaut in 8^th grade….until I realized how much physics was involved.  I grew up on a small farm with goats/sheep/chickens and the occasional pig. I entered vet med around age 16 – started by volunteering my time at a local small animal clinic until they realized I wasn’t leaving and gave me a job as a receptionist.  Then I became an assistant after spending more time learning how to do the job, and eventually I worked as a full technician with that doctor (I followed him when he changed clinics).  I was lucky that the state I grew up in did not require you to be an LVT in order to perform technician duties, so I learned a lot.  I’ve never actually had a paying job outside of the veterinary/animal field.  I moonlighted through wildlife and large animal positions (mostly nonpaying) to “round out” my experience for veterinary school applications.

2. What was your level of financial literacy prior to veterinary school? Were you price sensitive when pursuing veterinary medicine?

I had minimal training in financial literacy going to into veterinary school.  I started learning how to use a credit card at age 18.  I sat down with my parents and their bill and my bill every month.  It was drilled into me from day one that you never charge something to a card you can’t pay for come the end of the month.  Unfortunately, that was about all I knew.  (Editor’s note: that’s still a very valuable lesson to learn! There are so many people that are struggling with credit card debt because they never had this one, simple lesson.)

I did pick the cheapest veterinary school. On my first round, I ended up getting accepted to 2 schools.  I had a meeting with both vets at my clinic who emphasized how much debt would affect my life if I chose poorly.  It left a huge impact on me.  My Dad helped me sit down and figure out what living and tuition expenses would be at both schools. One of the schools was 45 min from my parents’ house, and they offered to let me live with them while I was in school to minimize my living expenses.  Even though tuition-wise it was one of the more expensive schools in the country, with only gas and car maintenance as a living expense, it was the cheaper option for me.  It was 100% the correct decision.

3. Did your veterinary school provide personal finance education? If so, what did you think of the quality? 

No, my school did not provide any financial literacy training or loan management advice.  You had an hour-long meeting in 4^th year to discuss your final loan balance and how much your repayment options would cost you. What makes this even more terrible is that my school was one of the more expensive private schools in the country, and most of my classmates were well over $200k in student loan debt.  I don’t know if this has changed in the 7 years since I graduated.

4. How much debt did you have upon graduating from veterinary school?

My original target was 100k or under.  I graduated with $118k in student loan debt.  The extra $18k was mostly due to tuition hikes, and a rollback of state aid.  This was 3 years of (almost) tuition-only debt from my DVM degree.  I graduated from undergrad in 3 years.  When I was considering whether or not to go back for a “senior year” of undergrad and go abroad, my parents sat me down.  They told me they had planned on paying for 4 years of college, so if I graduated early, they would pay for my first year of veterinary school.  I signed up for early graduation that afternoon.  I also worked as much as possible during school to pay for living expenses – I maxed out my work study hours at school and hustled like crazy during summers off (one summer I worked as a nanny during the week, a dressage groom on weekends, and I was petsitting all over the place in between those jobs).  

I will be honest that my parents’ assistance played a huge part in my decision to attend vet school in the first place.  If I had undergrad school debt, I would not have gone.  I figured if I could keep my debt at a relatively manageable level, I would do okay. 

5. Describe your debt payback strategy and how you decided to use that strategy.

It took me awhile to figure this out.  Initially, I paid off as much interest as I could during the “grace period” to minimize the capitalization of interest.  I decided I would do the 10 year plan. After 1-2 years of treading water, I realized I needed to get more serious about debt payback.  I refinanced the majority of my loans twice with private lenders (SoFi, then DRB) to achieve a final loan interest of 3.9%.  

There was one smaller loan with Sallie Mae that I chose not to refinance.  I went to school during the end of the “golden age” of loans when lenders were allowed to offer benefits to attract you to borrow from them.  While I was in school, the government decided to consolidate borrowing into the direct loan program, and that was the end of perks.  This loan allowed you to waive the last 6 months of payments if 9.5 years of payments were made on time.  By the time I was in a position to refinance or pay off this loan, I realized that financially I would actually pay less if I continued on the schedule and waited for the last 6 months of mostly principal to be forgiven.  I could pay off this loan any day now if I wanted to….but I don’t, because it will cost me less in the end to continue to make small payments (400/mon) on it.  If I paid it off today, the interest I would save is far less than what I will save from principal forgiveness. I have just over 1.5 years left on this loan.

The other loans were finally paid back 6.5 years out of school.  Not only did I refinance them for lower interest, but I got serious about finances.  I started making a budget.  I changed jobs and got a significant raise, which I poured into loans.  I started side-hustling and created a name for myself as a solid relief doctor on days off…and poured that money into loans too.  It was amazing how much more progress I made in years 3 and 4 when I really applied myself to loan payoff. 

6. How long did it take for you to pay off your debt? What was your debt-to-income ratio during this time period? 

It took me 6.5 years to pay off my debt.  Yes, I still have that small loan, but as I could pay it off at any time, I consider myself “student debt-free” at this point.  My starting salary out of school was $60k.  Year two I moved to the northeast and earned a $75k salary.  Year four I was offered a position at an ER clinic for 90k – so I did that.  Now I work full-time ER and will make $103k in salary at my clinic this year, along with about $9,600 from relief work (avg 1-2 shifts a month).  I have cut back my relief work significantly since paying off my loans, but in the past it added anywhere from $10-30k to my overall gross income.  I worked hard to continue to increase my salary and decrease my debt to income ratio (initially was 2:1, by year three was 1:1).

7. If you have a significant other/spouse, what role did they play while paying off debt?

I have been mostly single since I graduated from vet school, and 100% financially independent. I have never used anyone else’s income to pay off my loans.  At one point I did receive a $20k inheritance which I mostly used to pay off my car (which I bought used at a reasonable price), and the rest (about $7k) went directly into student loans. I elected to do this as it eliminated a payment (car payment) that I could start applying to student loans every month instead, and at that point my car was actually higher interest than my student loans (4.2% vs 3.9%).

8. Did you have any challenges while paying back your debt?

I didn’t run into any major challenges when paying back my debt.  There were times when I was spread thin (mostly in the winter when heating oil dug deep into my budget and I was pulling out of savings just to make it to the end of the month) but now that it’s done I feel it was 100% worthwhile.

9. What are some financial mistakes you’ve made? 

I feel like I have made a few mistakes –  namely not getting more serious about debt repayment sooner. I honestly could have been done at least one year earlier.  I also feel that I did not prioritize other things properly when I first got out – I had never had a real salary before, and shouldn’t have bought a TV or Wii, etc.  Just because I could afford it doesn’t mean I should have gotten it.  I should have started a retirement plan and contributed right off the bat.  I am just now starting to realize how affected I am by years of compound interest that I missed out on in retirement contributions.

10. What is your financial advice for other veterinarians?

-Don’t be afraid to change jobs for a better income.  I see so many stories of vets struggling to pay back loans who are making less than $80k a year.  In northern New England (very low cost of living), most start around $70-75k and are making $80k+ after a few years.  It’s worth moving if you can get a huge raise.  If you are small animal, consider part or full time ER work – you’ll be shocked at how much better it pays if you look into it.

-Contribute to retirement early and often.  This is the biggest issue I have with the Dave Ramsey approach to debt.  This year (7 years out from my 2011 graduation) I will finally be fully-funding my 401k, Roth IRA, and HSA accounts.  If you have a retirement through work, you need to contribute up to the match (it is literally free money!). You should have an IRA (Roth preferable if you are younger) and it should be invested in low-cost income funds.  If you have a high-deductible health insurance plan (and most of the USA does), you should have an HSA as well.  I pay all of my health and dental care costs with profits from the investing in my HSA account.  

-If possible, do some relief work on the side to make extra income.  Any time you get a pay raise, it should be put directly into loans or retirement.

-Many vets think they can’t afford to own a house because they can’t come up with the down payment.  I bought my house using the Rural Development program – its much lower cost than FHA and does not require a down payment to be made to buy the home.  You do have to buy a home in a “rural” location – but you’d be surprised at what RD considers rural.  Worth looking into if you know you’re going to stay in an area for 5+ years.

11. Feel free to add any other information that people may find helpful!

-I’ve learned most of my investment info from White Coat Investor (whitecoatinvestor.com) and Bogleheads.org forum.  

-I use mint.com to manage my finances.  I find it invaluable.  I highly recommended using mint or a similar product (Quicken, Personal Capital, etc) to help you learn how to budget and manage finances.  (Editor’s note: I don’t use an app, but I have heard great things about YNAB, an acronym for You Need a Budget).

-Sometimes it’s really helpful to have a fun goal too.  Almost all of my relief money went into student loan repayment – but starting back in 2014, I decided to use a small portion of it to go on one 2-week trip to Europe every year.  During 60-70 hour work-weeks, it gave me something to look forward to, and the push I needed to keep going and earning at that rate.

Closing Thoughts

Learning about finances from her parents was a huge help for this vet. Not only did they teach her how to be a responsible credit card holder, but they also strategized on how to minimize the cost of undergrad and vet school. Conversations with a couple of veterinarians about the burden of debt also influenced her greatly. As a result, she was able to graduate with $118k in student loans while many of her classmates had well over $200k.

Once she started working, it didn’t take long for her to get really serious and start hustling on the income side of the debt payoff equation. Her hard work resulted in additional income, and rather than spend this extra money, she was very intentional about using it to pay off debt. She even had enough to reward herself with a two week European vacation every year, which is a great lesson in self-care. 

So less than 10 years post graduation, she is a homeowner, essentially debt free (minus the one small loan that will be forgiven in 1.5 years), and she is fully maxing out her tax advantaged accounts. Careful planning and taking action by increasing her financial literacy led her to this point. Remember, it’s never too late to start planning and taking action on your own.

To our contributor- thanks for sharing your story! I have no doubt that you will have a very bright financial future ahead of you.

Are you interested in submitting your own Vet Success Story? I’m currently accepting submissions for student loan debt payoff, FIRE, and Entrepreneurs. Contact me at grace@richerlifedvm.com.