How to handle debt?

[flotation_demice]

This cycle has been both exciting and disappointing for me. I am very lucky to have received acceptances from vet schools except for my IS school (waitlisted, but unlikely to get off). My other struggle is that I need to report my parents' salaries based on my age, but I will not be receiving any financial assistance from them. I will be financially completely independent, but my financial aid will be based on their combined salary which will not qualify for financial aid. I already used all my savings to pay off my student loans from undergrad so I will have close to nothing entering veterinary school. All scholarships I have seen are based on need which I understand, but I won't qualify right now because they won't recognize me as paying for my own education.

Why do they assume that parents will help with grad school education? What can I do to ease my financial burdens in the future? I'm very grateful to be in my position, but I'm extremely anxious and feeling hopeless about all the debt I'm about to be in. Any advice would be super helpful.

Also, I hope to specialize in the future. Is it better to work first then specialize or go straight in, suck it up for a few yrs and then pay it off with a higher salary?

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[JaynaAli]

As far as I am aware, students in graduate programs like a DVM are considered independent regardless of age. Are you certain your parents info will be considered? I think vet students are often asked to input parent data to see if you qualify for the health professions student loans which have better interest rates, but I’m fairly certain you’re incorrect and you should be considered independent for federal loans. There aren’t many need based loan options once you hit grad school, they’re just plain direct and grad plus federal loans where they guarantee you’ll be offered the full cost of attendance. Scholarship opportunities for incoming vet students are often very limited so the main option is federal loans.

In general it’s easiest to do school and go straight into internship and residency. It’s easier because you have fresh relationships with specialists who can write you recommendations and it’s easier to find time for experiences as a student than an employee. It’s easier because you’re still mentally in that learning/school mode. Plus it’s easier financially because you aren’t going from student to a full GP salary back down to the minimal internship/residency salary. You don’t have to readjust to living poor after making significantly more. Not that it’s an easy experience but I’d say it is harder when you’ve been away from school. Most people will go on I come based payment plans during training and pay very little or nothing then hammer the loans or work towards forgiveness after getting boarded.

 

[SnowJ]

I was in a similar situation where my mom's income would disqualify me for certain financial aid but I was financially independent. I didn't include parent information on my FAFSA. It meant I could not get the health professions loan but I got plenty of coverage for tuition and living expenses without it.

 

[flotation_demice]

Thanks for the responses! Sorry I shouldve been more clear. I filed as independent on FAFSA but in college I qualified for work study and financial aid from my school and it was still difficult so I was worried about just getting federal loans. I'm glad to hear u got decent coverage and appreciate the insight about specialties.

To ppl who had to go out of state, can I ask how long u estimate/how long it took to pay off debt?

 

[renacuaja]

It’s a good idea to look up the VIN student loan calculator as well as Tony Bartels’ lectures on student loans.

Many do income-based repayment since it allows them to pay the least amount overall and paying the monthly amount for the 10yr standard payoff isn’t realistic for the majority of vets. Each option has its benefits and drawbacks and student loans aren’t a one-size fits all situation.

I’m not sure that including your parents financial aid information would disqualify you from loans considering that graduate students are considered independent. I would use advice from you school’s financial aid office.

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Lastly, to any pre-vets browsing. You need to look into what loan repayment will look like prior to applying to vet school. It’s a good idea to limit the schools you apply to only to the schools that a financially realistic. Use the online student loan resources from VIN.

Your future QOL and choices will be impacted by your loan burden for at least a decade and for most, 20-25 years.

 

[haileylee7]

For graduate studies, does the FAFSA offer only loans, or grants as well?

 

[JaynaAli]

There really aren’t options like Pell grants for grad students. Once you choose to pursue grad studies it’s on you. I am not saying there’s absolutely no grants out there, but they’re rare and I believe they’re usually just for a small amount.

You will be offered direct unsubsidized and grad plus loans, which are not need-based. Between these two federal loan types you will be able to cover whatever your school states is the total cost of attendance. There is a cap on the amount you can take out as a direct unsubsidized (edit: number redacted bc I was wrong/under), but then whatever else you need is offered as a Grad Plus loan.

The vast majority of grad school loans are unsubsidized too, so you start accruing interest from day 1. Again, there may be a few exceptions but these are uncommon and usually only for smaller amounts. I believe the Health Professions Student Loan which is need based and includes parent info is subsidized and has a lower interest rate than direct unsubsidized and grad plus. But for people I know who actually got that, it was only for a few thousand a year and they still needed to “top off” with the standard direct unsubsidized +/- grad plus loans. The interest is no joke…it’s entirely possible that you’ll accrue like 30k in interest even before you graduate, especially at more expensive school. Then when you enter repayment that interest capitalizes and you get to pay interest on your interest.

Edit: Private loans are theoretically an option but not one you should seriously consider. Private loans aren’t going to be eligible for income based repayment programs and forgiveness options. These income based options are only for federal loans. And many, many vets need income based repayment because they’d be unable to repay their loans on a traditional 10-year plan.

 

[eleanor713]

There really aren’t options like Pell grants for grad students. Once you choose to pursue grad studies it’s on you. I am not saying there’s absolutely no grants out there, but they’re rare and I believe they’re usually just for a small amount.

You will be offered direct unsubsidized and grad plus loans, which are not need-based. Between these two federal loan types you will be able to cover whatever your school states is the total cost of attendance. There is a cap on the amount you can take out as a direct unsubsidized (something like 20k/year), but then whatever else you need is offered as a Grad Plus loan.

The vast majority of grad school loans are unsubsidized too, so you start accruing interest from day 1. Again, there may be a few exceptions but these are uncommon and usually only for smaller amounts. I believe the Health Professions Student Loan which is need based and includes parent info is subsidized and has a lower interest rate than direct unsubsidized and grad plus. But for people I know who actually got that, it was only for a few thousand a year and they still needed to “top off” with the standard direct unsubsidized +/- grad plus loans. The interest is no joke…it’s entirely possible that you’ll accrue like 30k in interest even before you graduate, especially at more expensive school. Then when you enter repayment that interest capitalizes and you get to pay interest on your interest.

Edit: Private loans are theoretically an option but not one you should seriously consider. Private loans aren’t going to be eligible for income based repayment programs and forgiveness options. These income based options are only for federal loans. And many, many vets need income based repayment because they’d be unable to repay their loans on a traditional 10-year plan.

Just want to add to this^ federal direct is covers 40,500$ a year split into 2 semesters and grad plus covers anything else up to the COA listed on the schools website. I believe there’s also around 6,000 for the summer semester. Right now federal direct is a 7% interest rate and grad plus is 8%. (Info from Auburns financial aid meeting)

 

[AppyDust]

I’m an independent student based on age but added my parents information last year for the health professions student loan. The financial aid estimates came through as expected family contribution being around $8000. Even though fasfa had that expected student contribution I was still eligible to take out full amount of COA in loans for the school. Don’t know if being younger would make a difference but my experience was personal and parent finances made no impact on loan eligibility.

 

[renacuaja]

Something new I learned is that after your loans get dispersed you have a couple months (120 days iirc) to return any extra money. So, if you’re in a position where you over borrowed instead of putting money towards the loans as a student, you can return the money without the additional fees and interest being applied to it.

 

[battie]

I currently have approximately 113,800 in loans (not consolidated). My interest per month is 550. My loan payment is technically 1075. I pay 1300. The interest rate is so high that paying that extra 125 per month is only saving me a year of payments. I even pay weekly instead of monthly to beat the interest a tiny bit. This is the 10 year standard plan. I'm considering switching, but I need to post my math to the debt free page or VIN

 

[lianguine]

Did any of you guys go into vet school with undergrad loans as well? Were you paying monthly interest in school? I think that's what I'll have to do

 

[JaynaAli]

I did not, but when you begin classes, your undergrad federal loans are switched back to “in school deferment” status. While you may accrue additional interest if the undergrad loans were unsubsidized, I don’t think you’re typically required to make payments on the older loans. Unless they were private loans which can have their own rules.

 

[AppyDust]

Did any of you guys go into vet school with undergrad loans as well? Were you paying monthly interest in school? I think that's what I'll have to do

Yes on undergrad loans. No on any payments while in school. Federal loans and (depending on the terms) private loans will stay or go back into “sleep mode” while you’re enrolled in vet school.

Grad loans are usually higher interest rates than undergrad loans so you’d be better off just borrowing less or paying interest on grad loans rather than paying interest on undergrad loans in most cases.

 

[DVMDream]

Did any of you guys go into vet school with undergrad loans as well? Were you paying monthly interest in school? I think that's what I'll have to do

Yes, I did. No, I made no payments the loans were in forbearance while in vet school. I didn't have the money to pay on them while in vet school.

I have both private and federal loans from undergrad, the private ones will be paid off around 2029. My private student loans are on a variable interest rate so there's a high chance I'm going to make them disappear before 2029.

The federal student loans, well I'll make them a grave next to me for when I die because they'll be with me until then.