Loan payment

Suspension of loan payment provides reprieve

During the federal pause in student loan payments and accrued interest, Dr. Stephanie Willney felt for the first time that she was making progress against her student loan debt.

“It made me feel like the payments I was making for my student loans were actually having an impact,” Dr. Willney said. “We’re getting interest on interest, and it feels like it’s pushing us deeper and deeper into debt.”

Dr. Stephanie Willney said the pause in federal student loan payments and the accumulation of interest has given her and her husband the financial stability needed to make major changes in their lives. (Courtesy of Dr. Willney)

Federal authorities have suspended payments on federal student loans, reduced interest on that debt to zero, and suspended collection of delinquent loans since March 2020 through the Aid, Relief, and Security Act. economics of the coronavirus and subsequent extensions. On December 22, 2021, the Biden administration extended the relief package through May 1.

Dr. Willney graduated as a veterinarian in 2017 from the University of Illinois and spent the next year living with her parents so she could pay off the $30,000 she owed for her undergraduate education. She continued to work full-time and pay off her loans while she earned her master’s degree in public health, graduating in 2019.

Dr. Willney was able to make regular payments and even extra payments before 2020, but she and her husband felt more comfortable with their finances after the break took effect.

“We were able to have a baby during this time when we felt like we were financially stable enough to pay for daycare, pay our mortgage and pay extra on my student loans,” she said.

In January, Dr. Willney owed about $238,000.

In an announcement, US Department of Education officials said the ongoing relief effort will affect an estimated 141 million people. They also said the most recent extension would allow the administration to assess the impact of the omicron variant of SARS-CoV-2 on people with student debt, give those borrowers more time to plan. the resumption of payments and reduce chargebacks and defaults when payments resume.

“The Department will continue its work to ensure a smooth transition for borrowers into repayment, including improving student loan servicing,” the announcement said.

Repay principal

In messages and interviews, the vets said they continued to pay off their student debt during the break and were able to make thousands of dollars in additional payments for their loan principal rather than the payments. regular monthly payments which would have applied mainly to interest.

Dr. Lauren Stuekerjuergen graduated in 2018 from the Ross University School of Veterinary Medicine with approximately $380,000 in student debt and soon after joined the Pay As You Earn loan repayment plan. At first, she moved back to live with her parents in Virginia to save money, and she felt unable to work extra shifts because the temporary increase in her income would increase her future monthly loan payments.

At the start of the COVID-19 pandemic, the pause in loan repayments allowed her to invest what she would have paid each month in the stock market. Combined with the savings she had accumulated, she was able to invest around $140,000 since the start of the hiatus and cash out in December 2021 with over $200,000 for her debt. Dr. Stuekerjuergen, who works in private practice in Northern Virginia, also refinanced and left the PAYE plan. She is no longer hesitant to take extra shifts and hopes to pay off the remaining balance within the next three years.

Dr. Deaver with a canine patient
Dr. Kelsey Deaver, who works in a mixed animal practice in Granbury, Texas, was able to build an emergency fund and replaced his 20-year-old car during the break in federal student loan repayments. (Courtesy of Dr. Deaver)

Dr. Kelsey Deaver graduated from Iowa State University in May 2021 with approximately $245,000 in student debt. Although she had to start repaying her non-federal loans in December, delaying the start of her federal payments has already allowed her to build an emergency fund and post a bond on a truck to replace the 2001 Honda Accord that she has since she was 16. also plans to consolidate its other debts into its federal loans.

Unless the pause is further extended, Dr. Deaver will begin making payments through an income-based reimbursement plan in May. Between saving for retirement and paying for education, “I’m going to have to be a lot stricter with my budget,” she said.

Dr. Deaver works in a co-ed animal practice in Granbury, Texas, where a fellow graduate a few years earlier was considering taking out a business loan to pursue a partnership at the clinic. Dr Deaver said the suspension of payments and interest made that possibility less daunting for his colleague.

For students, too, the pause in interest accumulation has slowed the expansion of their existing debt.

Ilissa Chasnick, a fourth-year veterinary student at Michigan State University, has more than $100,000 in federal debt and she said she pays in-state tuition. She said she was happy with the break in interest accrual, but she fears she will face a high interest rate when the break ends.

Chasnick plans to do an internship followed by a residency. She wants to pursue a career in emergency and critical care, hopefully as a resident and then a faculty member at Michigan State.

But Chasnick sees a disinterest among other students in pursuing specialized training due to the lower pay in the first few years after graduation.

“A lot of my classmates are not interested in pursuing these specialties knowing that for the next four years they will have to take a huge pay cut,” compared to the private practice salary, she said.

Chasnick thinks high debt and low salaries — among vets and vet techs — also discourage people from entering veterinary medicine.

The debt burden remains

AVMA leaders also advocated that Department of Education officials be mindful of vets and vet students with student debt. In July 2021, AVMA leaders noted in a letter to DOE officials that earning a four-year veterinary degree in the United States costs between $160,000 and $290,000. They called for protection of the public service loan forgiveness program, expressed opposition to capping amounts forgiven under that program, advocated for a federal refinancing option, and recommended an automatic pause in student loan repayments. and interests for veterinarians seeking advanced education and training.

Results from the 2020 AVMA Senior Survey separately indicate that respondents had an average student loan debt of $160,000. An article published in the April 15, 2021 issue of JAVMA describes the results of this survey, including the average starting salary of $93,000 among respondents entering private practice.

Dr. Willney said resuming payments in May would add stress, and vets are already facing stresses from moving to curbside practice and increasing patient numbers.

“We work and work and work, so to add the zero percent stress that goes away, it will certainly only affect mental health and general well-being,” Dr Willney said.

Dr. Willney also wants a closer look at tuition, how that cost is presented to prospective students as affordable, and the quality of student loan and debt discussions with students.