Future Veterinary Student Loan Changes
Attention Veterinary School Applicants:
On July 4, 2025 the One Big Beautiful Bill Act was signed into law.
The law contains several updates for federal student loans and repayment. Here is a summary of the borrowing and repayment changes for those starting veterinary school after July 1, 2026:
- New federal student loan borrowing caps for graduate and professional degree programs.
- Annual limits for professional school (i.e. veterinary school) are $50,000.
- The aggregate limit for veterinary school is $200,000.
- The lifetime limit for all federal student loans will be $257,500
- If your cost of attendance exceeds the annual or aggregate limits, you will need to pay out-of-pocket or secure other funding, like private student loans.
- If you borrow for a grad school or another professional school program, that amount borrowed counts toward the $200,000 cap.
- Direct PLUS loans for graduate and professional school will no longer be available.
- Only two repayment options will be available after you graduate veterinary school:
- A new income-based repayment option called the Repayment Assistance Program (RAP), and
- A standard repayment plan between 10 and 25 years depending on the amount you borrow.
- Public Service Loan Forgiveness (PSLF) continues to be available for federal student loans borrowers employed by qualifying organizations
- Payments made using the new RAP plan are PSLF-eligible
- Private student loans are not PSLF-eligible.
What does this mean for pre-vet students planning to start veterinary school after July 1, 2026?
Most veterinary school seats have a cost of attendance (tuition, fees, and living expenses) exceeding $50,000 per year. Any amount you need above the $50,000 annual federal student loan cap will require personal funding or private student loans. If you have access to 529 funds or personal funds, great! That’s going to be a huge help under the new borrowing landscape. However, private student loans are more difficult to obtain and will have higher interest rates than your federal student loans.
Some lower cost in-state veterinary school seats have a cost of attendance below $50,000. For those programs, you can borrow only federal student loans to cover your education expenses.
Higher cost veterinary school seats (out-of-state or private school programs) have tuition and fees exceeding $50,000 per year. If you are accepted into one of those programs, you will hit the annual caps more quickly and require more outside funding.
The more outside funding you need, the higher your risk of not being able to complete that program, financially. Outside funding is secured as needed for each year of school, not all at once.
What do we mean when we say Apply Smarter?
To date, there is no data showing that you will earn any more or less income based on the veterinary school you attend.
Essentially, there is no “Harvard effect” when it comes to veterinary school. That means it is in your best interest to apply only to veterinary schools where it will cost you the least to attend. With these new federal student loan borrowing limits, this Apply Smarter concept is more important than ever. It is always easier to manage less student debt than it is to manage more. It is also easier to manage only federal student loans than it is to manage both federal and private student loans after veterinary school.
Consider a new graduate veterinarian earning a $135,000 annual salary. This veterinarian borrows the maximum allowed $200,000 of federal student loans at 7.75% and accrues about $25,000 of interest during school. Their estimated monthly federal student loan payment is $1,125/mo using RAP or about $1,700/mo using a standard 25 year plan.
Let’s say they also needed an additional $75,000 of private student loans to get through school at a fixed 10% interest rate. Another $15,000 of interest accrued on the private loan during school. With a 15 year repayment term, that additional monthly student loan payment would be $967/mo. Now you have a payment of more than $2,000/mo as you’re getting started in your veterinary career, about 27% of your after-tax take home pay.
Maybe you select a higher priced veterinary school seat and need an additional $150,000 in private student loans. The more you have to borrow in private loans, the harder it gets to qualify and the more they will cost you. This time, let’s say your interest rate is 13% and you accrue $20,000 of interest during school. Now your monthly private student loan payment will add another $1,922/mo to repay if you’re lucky enough to get a 20 year repayment term.
Take home message – the more you have to borrow, particularly in private student loans, the harder it will be to get through veterinary school (financially) and manage your debt after school.
- Best case scenario: Graduate with only federal student loans
- Manageable scenario: Graduate with federal student loans and minimal private student loans
- Worst case scenario: Graduate with federal student loans and high private student loan balances, if you’re able to obtain enough private loan funding to get through school.
Avoid applying to schools that will put you in the worst case scenario = Apply Smarter.
What if I don’t get into veterinary school and pursue a master’s degree to improve my veterinary application the next time I apply?
Under the new law, any graduate school program you start after July 1, 2026 will have annual federal student loan limits of $20,500 with an aggregate cap of $100,000.
Unfortunately, those graduate school loan amounts will count against your professional school aggregate limit of $200,000. For example, if you borrow $50,000 to complete your graduate degree, you will have $150,000 remaining to complete your veterinary education.
The sooner you hit the federal student loan caps, the more you will have to pay using personal funds or obtain private student loans. The more you have to rely on private student loans, the riskier it is to get through veterinary school and manage repayment after graduation.
What if I apply to and get accepted to a foreign accredited veterinary school program? Are the borrowing limits different?
In the past, students eligible for U.S. student loans have had lower borrowing limits when they attend accredited schools outside of the U.S. Those students end up with higher Grad PLUS loan amounts than those completing U.S. veterinary school programs. Grad PLUS loans will no longer be available to students starting programs after July 1, 2026. However, it is unclear whether or not federal student loan limits will differ for those students attending accredited foreign programs.
Generally speaking, U.S. students attending foreign programs pay more for their veterinary education vs. U.S. based programs. The higher your costs, the more you will need to rely on personal funds or private student loans.
I was planning on a non-profit career after veterinary school and using Public Service Loan Forgiveness to help repay my loans. Is that still an option?
Yes, PSLF is still an option for federal student loans. You will need to use the new RAP plan and make payments while working for an PSLF-eligible employer after graduation. After making 120 qualifying PSLF payments, you can apply to have your remaining federal student loan balance forgiven tax free.
PSLF is not available for private loans. If PSLF is part of your repayment plan, focus on applying only to veterinary schools with a total cost of attendance under the new federal student loan borrowing limits. The VIN Foundation Apply Smarter Tool and Cost of Education Toolkit can help you find programs that will help you limit or avoid private student loans entirely.
For a more detailed breakdown of borrowing and repayment changes in the recently passed law, review “Changes to federal student loans come into focus”.
Questions?
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