I'm not familiar with the details with the bill, but on the surface it sounds promising. This is definitely a step in the right direction- government is recognizing debt burden is a problem and they are somewhat taking steps to assist or alleviate the problem. If the bill isn't going to be in effect until the summer of 2014, what are they going to do to address all the people with education debt problems NOW?
A lot of people are scared to pursue higher education because of the financial burden which accompanies it. Hopefully, as this bill passes other bills will follow to help give encouragement to people who are thinking of pursuing higher education.
As far as future veterinarians are concerned, the bill will assist those with goal of owning their own clinic. New grads w/ hundreds of thousands of dollars of debt are unable to buy their own business until the majority of their student debt is paid off. With this new bill hopefully their dream(s) of owning their own clinic will be able to happen a lot earlier in their careers.

Kelly S. McDaniel
Mississippi State University
College of Veterinary Medicine Class of 2013
2010-11 President- Student Veterinary Emergency and Critical Care Society
2010-11 Vice President & Secretary- Veterinary Business Management Association
2010-11 Vice President- Disaster Animal Response Team
The Honest Kitchen Student Rep.

"To know that even one life has breathed easier because you have lived, that is to have succeeded." Ralph Waldo Emerson

I'm heartened by the fact that the administration, despite it's myriad of other social and political issues, has had the forsight to take action to limit the massive and climbing debt incurred by medical students. As we all know, the medical professions play a crucial role in public health, epidemiology, food quality, emerging diseases, imports and exports and the list goes on and on. As tuitions rise, these careers become more and more out of reach for the inteligent and motivated students needed to pass the coursework. It is absolutely in the national interest to provide some sort of protection to those that choose this difficult carer path. I'm glad we are seeing our government recognize this and take steps to provide that protection. My only wish is tht these programs would be effective immediately because 2014 is too far out to help with my financial burden.

Like any new bill with new spending plans, I always wondering from where the money is coming. This is the part of the bill that I didn't understand.

"The education related initiatives funded by the Health Care and Education Reconciliation Act are fully paid for by ending the government subsidies currently given to financial institutions that make guaranteed federal student loans. Starting July 1, all new federal student loans will be direct loans, delivered and collected by private companies under performance-based contracts with the Department of Education. According to the non-partisan Congressional Budget Office, ending these wasteful subsidies will free up nearly $68 billion for college affordability and deficit reduction over the next 11 years."
http://www.whitehouse.gov/issues/education/higher-education

Anybody have a clue what that means? So loans are coming directly from the government but still being delivered and collected by private companies? How is that 'direct?'

Other issues to debate. Wow, what a huge increase in Pell Grant size, $5,550 to $5,975! Yes people, that's sarcasm. Is an extra $425 supposed to make all the difference? As a grad student, I don't even think I qualify for a Pell Grant. At least I have not been receiving one for the last 3years. Furthermore, when I was in undergrad, I remember getting a Pell Grant for $20K. When did it shrink?

Investing more money in community colleges. I think that says it all...

Expanded Income Base Repayment (IBR). (Does anybody else see IBR and think Infectious Bovine Respiratory disease? No? Just asking.) I follow through with what the latest people have commented. Could this have a negative effect on people's lacadaisical approach to loan responsibility? And who foots the bill for the unpaid loan at the end of the term? Taxpayers?

So if I join the Vet Corps and forego all the bonuses to keep my salary minimal, can I have the rest of my typical 30y vet loan repayment extinguished after 10y? So 20y of loan repayment just vanishes?! There must be a wizard working in the White House. Does military service apply to the Vet Corps, seeing as how it's a group of highly paid high-ranking officers? I was already attempting to join the Vet Corps for non-monetary reasons, but that looks like a pretty good deal!

I wonder if it covers state and government positions also, such as USDA?

I think I agree with most people here in saying that it is encouraging to see that the government is taking notice that the steep costs of pursuing a career in the health professions are continuing to climb. Hopefully laws like this will encourage those interested in the health professions but concerned about the costs of an education to put aside financial reservations. However, at the same time my immediate concern is that laws like this may encourage irresponsible loan usage--what is the point in being frugal if you will not have to pay off all of your loans in the long run? Again, this leads to the question of who is actually paying the difference then? As many schools are already dealing with severe budgets cuts with the current economic situation, I assume this money will ultimately be coming from taxpayers. In the end, it's hard to know for sure how this manipulation of debts will impact our profession and the economy in general.

Chelsea McIntyre
U of Penn
Class of 2013

Well, I think based on the basic premise of the Act, if it is indeed true that the max payment is 10% of income, and the max period is 20 years, then the government virtually HAD to take over the program. Otherwise, lending institutions would likely place a limit on the available loans that was equal to or less than the total max (as an example, the $139,000 for vets mentioned by a prior poster). So if you end up needing more than than, it in essence becomes a government subsidy for your education.

I am not usually a fan of government interference in the private market (I was an Econ major in undergrad...:-)), but I think with the continuing leaps in tuition to get a professional education, cost control or support had to become a factor sooner or later. Hopefully, this bill will be a step in the right direction, and not just add one more thing that the gov't turns into a three-ring circus of bureaucracy.

Anne Fleming
Co-VP, V'13
Tufts Cummings School of Veterinary Medicine

I do not know the details of the bill past this discussion; however, the premise of this bill sounds like a step in the right direction. The government is recognizing the problem of the debt to income ratio and taking measures to correct it. Therefore, I feel like this can only help students in the future. I think the only downside of this bill is that it will not affect students until July 2014.
Hopefully with bills such as this and those that will follow, it will encourage higher education. There are many people with great potential that do not enroll in higher education because of the reality of the debt or simply because they really cannot afford to do so.
In regard to the veterinary profession in particular, I think with the decrease in the burden of debt, it will allow practice ownership to be a new option for many.

Kathy Durso
VBMA Secretary
University of Tennessee

On the surface, I'm all in favor. I mean, come on, paying less money back in the long run seems great, right? But I fell like there might be a catch here. I'm not familiar with the bills that have been passed, nor have I done my research. But (in agreement with all others so far) the one question that sticks out: where is this money coming from? I can see the incentive of the government taking over this aspect of loans, seeing as its been getting more an more out of hand. But ultimately, is it going to hurt or benefit the common tax payer in the long run? Until I see through the red tape, I'll be pretty iffy about it...

The one thing I like is I know who exactly to contact when I have questions. With previous loans that I had for undergrad it seemed I was getting a letter every other month about my loan being sold to a different company. It became rather frustrating getting the run-around trying to figure out who was in charge. At least now I know!

As others have already stated, this appears to be a move the in the right direction, and our profession should reap the rewards as much as any as the income to debt ratio is much more dramatic than others. Since it won't begin until most of us are out of school and active in the profession, we will get to watch it unfold with our successors and will, by then, have more analysis by those more in the know than I am.

My one concern is the government only issuance of subsidized loans. In most cases the government taking on a task such as this tends to turn into a paperwork nightmare, so let's hope for something better this time.

Nanci L.M. Richards
UIUC College of Veterinary Medicine 2012
VBMA President
Pfizer Animal Health Student Representative
AASRP Representative
ISCAVMA Speaker Representative

With the little background knowledge I have, I’m in favor of this law. The debt to income ratio for veterinarians is alarming especially to those of us that are out-of-state students. This law will limit the amount that can be drawn out of our monthly income therefore contributing to the quality of life. I mention quality of life because it’s stressful enough to be a veterinarian fresh out of school, much less trying to figure out how to pay rent and massive loans when you are likely at the bottom of the pay gradient. I’m glad that there has been attention drawn to the difficulties of graduate students, particularly veterinary students, as our education process becomes less enticing as the price rises.

Hopefully this new bill will improve the situation of veterinary students who are presented with the real problem of an increasing debt to income ratio, and starting salaries are not rising in proportion to the debt our education costs us. The bill sounds like it might eliminate some of the stress associated with our debt responsibilites as new graduates. By decreasing the time required before loan forgiveness from 25 to 20 years of timely payments and decreasing the maximum monthly payment from 15% to 10% of discretionary income, this should help students by decreasing their financial burden; however, I wonder how some student may take advantage of this situation. This may increase spending while decreasing the amount that is owed by the students. Where is the money coming from? Possibly interest rates? I almost am tempted to believe it is better to keep the rate at 15% and decrease the time before loan forgiveness. However, this doesn’t help our classes or many classes to come; but, for the sake of posterity, it will be extremely helpful to support the bill. We will have a greater debt load than most, so decreasing the time and amount we must pay before we are eligible for debt forgiveness can’t be a bad thing at the individual level.

Despite the fear I have about the government getting a little too involved in areas of business I don’t think they belong in, this bill does sound like it will help veterinarians in the future. However, it just sounds a little too good to be true.

University of Florida VBMA Officers

Well, I'm certainly happy for anything that will decrease the burden of my veterinary student loans when I graduate. I always knew that it would be a significant investment, but I never thought I'd be accepted to veterinary school during an economic recession with no chance at WICHE (Western Interstate Commission for Higher Education)funding as a result of the economy. I'm hopeful that the details in Section 2213 (decreased annual, income-based repayments and forgiveness after 20 yrs) will assist more of us in buying or starting a veterinary practice earlier, thus building wealth sooner.

Brandi Bayliff
WesternU VBMA President

While this sounds great, I don't know that we can simply rely on this- 10% of our future salaries is alot of money, although definitely less then the original 15%. Additionally, the loans we do take out are increasing each year- enough that our future salaries can match it? Hopefully! We need to continue exploring other options, such at practice ownership and the military- but what about those who do not want to commission or own their own practice? What else can WE do to help this problem? The money has to come from somewhere...

Tori Long
Virginia- Maryland

During the school year our VBMA had a meeting to discuss the new options for loan repayment. The improvements to the current income based repayment plan sound very promising, and when the math is all said and done, one comes out paying nearly equal to what they initially paid thus negating all interest that accumulated over the 20 years. That being said, the one downside to this plan is the fact that there is no contract guaranteeing loan forgiveness in 20 years. While most government plans that are cut in the future usually grandfather those who are currently in the program in, this does possess some risk to veterinarians since the amount of interest over 20 years ends up costing more than the actual loan itself. Hopefully, the bill continues to improve and finally veterinarians can believe in a loan repayment plan that actually fits.

Michelle Heade
VBMA Secretary

The idea of helping veterinary students lower their amount of loans is a great idea. With the economy the way it is today we are going to need all the help we can get, especially those of us that would like to go into private practice and become business owners. I think the this idea will do nothing but have a positive effect on our profession.

The one thing that worries me is the fact that it places more money in government hands which in past years has not boded well. I think that the fact that the government doesn't seem to have this money to loan is a big problem as well. At least private banks have the assets to be able to back a loan and keeping these firms in the process of financial aid to students seems to be essential. Education is a business and we can not be loaned money without there being payment to the loaner. In my eyes the government is not a business and should keep their hands out of this process.

Overall, I believe the bill is a good idea, but the only thing that concerns me, as always, is government involvement.

I hope you are all enjoying your summer!!

Cory D. Penn
VBMA Vice President
University of Missouri College of Veterinary Medicine
Class of 2013

I think that the goals here are admirable and that it is the right way to start fixing the system. Student loans became a giveaway to private operators and that state of affairs was unfair. I do have worries about the effect the income-dependent repayment provision will have. Ultimately, I think our society needs to subsidize education directly and be clear about its goals, rather than doing it indirectly without any goals at all.

It looks like the bill is doing the responsible thing and trying to kill off Sallie Mae. It's not hard to find examples of their abuses, and pulling them off the public teat will help a lot. A lot of people don't realize that we taxpayers were subsidizing private loans, where the debtor was paying 2% APR or so and the treasury was kicking in 7%. Clearly it's more efficient to offer loans directly and not have the middleman.

I don't think this will eliminate private loans. There will still be limits on the amount of direct loans a person can take out and there will be a need for private funding for certain people's educations.

To call it a government takeover is inaccurate. The "private market" that existed before this bill was the direct result of earlier legislation that provided the above subsidy. Taking the subsidy away would have left people hanging, so the correct fix is to replace the loan program with direct loans.

To say that taxpayers now have to pay for a new program is also inaccurate. This legislation is expected to reduce the deficit by $19bn. That also includes additional funding for pell grants. That score, however, does not likely include the new 20-year/10% provision because the budget window is only for 10 years, so that is harder to judge.

If you consider that someone coming out of school, getting a job at $70,000, and never getting a raise, will only pay $139,000 over the course of 20 years, this will be a good deal for some students. Sure, they'll never pay off the principal, but it will be forgiven at the end anyway. Perhaps it will make the class of 2018 less nervous about money.

One way to look at this, though, is that for some professionals, the cost of education will be a 10% tax on their income for 20 years. That is especially true if the 10% of income amount does not pay all the interest on their predictably large amount of debt. In that case, they may never pay off any principal and will require forgiveness at the end of 20 years.

I predict that we will see federal legislation or rulemaking in the future concerning what is an acceptable amount of tuition for various degrees, dictating the maximum federal loan amount to cover that education. This is because universities may start increasing tuition well beyond the ability of the borrower's career to pay it off at 10% of income, and they will effectively get a subsidy from the treasury for this tuition.

My guess about the impact on the profession is that it will be essentially flat. A lot of students were already in the forgiveness-after-25-year bracket, so their life will be similar after the 2014. The rest are going to be paying about the same rates. That may change if cost of attendance keeps increasing.

In all, I think this is a good act. I believe, though, that we really need to reduce tuition in general, and provide more subsidized living arrangements, especially for undergrads. The opposite approach, which we have been moving toward since the 80s, is allowing tuition and loan interest to capture the increases in income that education is supposed to provide.

John Duncan
Class of 2012
UGA VBMA President
UGA SCAVMA Treasurer

Anything that will help to lower the amount of student loans is a great thing in my mind. But I am not sure that this change, will accomplish that goal. The idea that we are paying interest on loans to educate ourselves, is crazy in my mind. In other countries, the idea that you are paying large sums of money to educate our professionals, is very foreign. While this might be a step in the right direction, it is a baby step and right now with our economy, we need large strides to be made. We are undertaking a large amount of debt to make minimal salary for our level of education. The average salary of veterinarians in the United States is around $70,000. The amount of debt that most students have graduating is easily $100,000 if not more. If you compound your loans, pay the minimum payment for a $160,000 loan, you will end up paying over $150,000 in interest. That is crazy!!!! And then imagine if you weren't a smart business student, and didn't run your business to high profitability, paying off your loans would be painful.

I think that we have yet to see exactly how the wording on this bill will effect us. Hopefully it will be positive, but at the moment I am skeptical. Hopefully I will be proven wrong. But I really think that things need to change within our education system.

Ashley

I originally thought when I saw this bill, loans are loans right. I have to borrow money to pay for my education, doesn't really matter where it comes from. Besides all of my previous loans had been sold to the government anyways. However, yesterday I signed my new MPN for the government student loan program and there were a few details that I found unsettling. Like the fact that our interest can be capitalized, my previous Stafford's did not have this. Basically this means that if I don't pay interest during school the government can add the unpaid interest to the principal balance, and you would then pay interest on your interest the following year.
Whether or not the government taking over our loans will be good for our profession is hard to say. The student debt load is still increasing, with the cost of education. Maybe it will help the government climb out of the recession, which would promote business. However, it is like previous people have said, if this money is coming from the average Joe's tax dollar, that is one dollar less he has for spending money.
I still have lots of questions on the loan program such as, what if someone had a low salary and the 10% over 20 years doesn't cover the loans they borrowed, then what? However, I believe the questions and quirks will be worked out as the program continues. Lets hope that the government will favor us students and the results will lead to better industry.

Jasmin Feist
WSU VBMA Vice President

With admittedly minimal study of the bill, I'm in favor. On the surface, we're talking about a reduction in loan payments overall. In a profession where the cost of education is high enough that starting salaries are barely enough to cover loan repayments, anything that reduces that load is going to help.

The question, then, becomes one of politics. This bill takes handling of loans out of the hands of private banks and puts it into the hands of the government - it's hard to see it as anything other than a "government takeover," and if that sort of things bothers you, then can you support the bill, even with the apparent benefit? Also, the money isn't being pulled out of thin air - where does the government get the money to loan to us (more than they already do with Stafford loans, anyway)? It's going to come from somewhere, and government money is tax money. It's easy enough for me to support other people's taxes funding my education, but tell that to the average Joe who isn't in Vet school.

All that being said, I'm in support of the bill. I think it's going to help the profession overall, and I think that any reduction of the loan burden on students is worthwhile, even if it does extend the government's involvement in our business.

Chris Bidwell
NCSU CVM Class of 2013
VBMA Chapter President-Elect

Looking at the numbers, I think that anything that is going to help to reduce student debt is a good idea. Although the next logical question to ask is where is this extra money going to come from. And in an economic down turn like we are in now this is even more disturbing.
So the question then becomes, who do you want to trust more, the banks or the government?
Clearly the banks have lost some of their privilege to be able to make money at the hands of the students. But does the government deserve the ability to make money on us?
I believe that students furthering their education should be able to go to school for free. Especially those students that are going into the medical field. Just think of how hard is was to get into school, and now we have to pay even more than we did for our undergraduate education.
Free professional education would increase the competition of students to get in, but this would also insure that our medical professionals are going to be some of the best of the best students, and not just the students that can afford to go on to medical school.
Andrew Pierce
NCSU CVM Class of 2012
VBMA chapter President