Letter: How low NAVLE scores affect student debt, too

Failing the national exam might bring financial pitfalls for veterinarians

November 22, 2023 (published)
From Tony Bartels

I read with interest the VIN News Service article University of Arizona struggles in quest for full accreditation (Nov. 15), which reported that just 72% of the program's first graduating class passed the North American Veterinary Licensing Examination. The article also mentioned a downward trend in NAVLE pass rates nationwide since 2021.

One of the insidious side effects of not passing the NAVLE is delayed action on student loans from veterinary school. After graduation, student loans from veterinary school enter a grace period during which no payments are required. The grace period is six months for Direct loans and can be longer for other federal loan types, like Health Professions Student Loans, Loans for Disadvantaged Students and Perkins Loans.

With the recent end of pandemic forbearance benefits, federal student loan interest began accruing in September on all unsubsidized loans during grace periods. Moreover, no forgiveness credit is earned during this period, even if you make payments. The new Saving on a Valuable Education income-driven repayment option is more helpful than the grace period. Borrowers should take steps right away to tap that option.

As an aside, I personally think the school should bear some responsibility for post-graduation student debt management in such situations. There's nothing like taking on a mountain of debt and not being able to practice your profession for some unknown amount of time. But, since school responsibility for student debt is unlikely to happen anytime soon, graduates must act to protect themselves from costly student loan consequences.

Why is consolidating and/or enrolling in SAVE right away better than staying in the grace period?

SAVE provides a 100% unpaid interest subsidy. That means the U.S. Department of Education will cover all of the interest that your minimum monthly payment does not. SAVE ensures that your loans will not accrue interest (that you'd need to pay later) while you're focused on passing the NAVLE so that you can practice and earn a professional income. SAVE also will produce the lowest monthly payment of any of the available income-driven plans. Your payment can and should remain at zero for at least the first 12 months of using SAVE. You also earn credit toward eventual student loan forgiveness (should you need it), whereas time spent in the grace period is not forgiveness-eligible.

Here are some best practices in the changing federal student loan repayment landscape for minimizing the financial consequences of your student loans while you work to pass the NAVLE:

  • Start a Direct Consolidation Loan as soon as possible if your loans are in the grace period or you have multiple loan types. Include all eligible federal student loans; there is no benefit to excluding any. Start the consolidation application here.
  • In the application, end the grace period early by selecting the "do not delay processing" option. Consolidation is the only way to end a grace period early. For recent UA veterinary graduates, your loans are in their grace period right now. That's not helping you. After choosing to end your grace period early, select the SAVE repayment plan.
  • For recent graduates whose grace period has expired, you may want to consolidate loans only if some or all your federal loans are not eligible for SAVE, or you have loans from before veterinary school that remain in repayment. A one-time forgiveness count adjustment now underway could provide you with extra forgiveness credit if you consolidate older loans with newer loans. Note that you must consolidate by April 30 to potentially benefit from the count adjustment.
  • If you don't have a good reason to consolidate, you may apply for SAVE without consolidating. Everyone with Direct loans is eligible for it.

If you filed a tax return for 2022 before graduating in 2023, or you are not yet working, you can have a $0 monthly minimum payment using SAVE. All veterinary students should file a tax return before graduating, regardless of whether the IRS requires one from you. Having a tax return on file makes applying for income-driven plans much easier and helps to ensure a $0 payment for the first 12 months under a plan like SAVE.

Any veterinarian or veterinary student can get help with student loans free of charge through the Veterinary Information Network, an online community for the profession, and its nonprofit affiliate, the VIN Foundation. Start by visiting the VIN Foundation student debt help page and obtain personalized assistance by submitting a secure Student Debt & Income Signalment Form. Our goal is to help veterinarians at every stage of their careers efficiently manage their educational debt.

To UA or any veterinary school: If, as part of your comprehensive student support, you would like to help your new graduates navigate their student loans, we'd be happy to assist.

Tony Bartels, DVM, MBA, is a 2012 Colorado State University graduate, a student debt consultant at VIN and a member of the VIN Foundation board of directors.

Jan. 5, 2024, editor's note: This letter has been changed to reflect an updated deadline of April 30 for consolidating loans in order to potentially qualify for the U.S. Department of Education's one-time forgiveness count adjustment.

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