Public Service Loan Forgiveness program in jeopardy

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The fact that veterinary students are graduating with crippling and often six-figure debt loads isn't news to those in the profession. Debt, coupled with low starting salaries, means many veterinarians are unable to achieve financial freedom, often paying their loans back for the majority of their careers. This makes public service positions-such as working with the state veterinarian, in a public health laboratory, or with a nonprofit, which tend to have even lower starting salaries-a daunting prospect, even though it may be a veterinarian's dream position.

One element that can help offset that gap is a President George Bush-era initiative called the Public Service Loan Forgiveness program (PSLF), which completely forgives the loans of those who spend 10 years of service in a qualified public position and make 120 on-time loan payments. This forgiveness is untaxed, according to the Office of Federal Financial Aid, which oversees the program.

How PSLF works

According to the Office of Federal Student Aid, to be eligible for PSLF a borrower must:

> Work full time (at least 30 hours per week at one job or total between several qualifying part-time jobs) for a qualified employer for 10 years. A qualified employer is a government organization (state, local, federal or tribal) or a not-for-profit 501(c)(3) organization if its primary purpose is to provide a qualifying public service.

> Only loans under the William D. Ford Federal Direct Loan (Direct Loan) Program are eligible for forgiveness. Other loans must be consolidated if the balance is to be part of the amount forgiven by PSLF.

> Make 120 qualifying on-time payments toward his or her balance while employed by the qualifying organization.

> Not include payments made when the borrower is in school or during grace, deferment or forbearance periods.

> Remember he or she does do not automatically receive forgiveness after their 120th payment but must submit an application and be working for a qualified employer at the time of application.

In 2012, in response to criticism that the system was complicated and caused borrowers to think they were making progress toward their goal but weren't, the Office of Federal Student Aid introduced the employment certification form, which can be completed and submitted annually or when the borrower changes employers. The agency uses the information provided on the form to determine if the borrower is making qualifying PSLF payments.

“The idea is to encourage going into public service, into positions that normally would not pay as much as going into private practice,” says Kevin Cain, director of governmental affairs for the American Association of Veterinary Medical Colleges (AAVMC).

PSLF isn't just available for veterinarians; the same financial strains also exist for doctors, attorneys and many other graduates of professional programs, Cain continues. The loan forgiveness option helps graduates go into these lower-paying public service jobs and be able pay off their loans. A doctor may choose to practice in a rural area, for example, or an attorney can work for public benefit, Cain says.

A costly proposal

The program was established in October 2007, so the earliest any qualifying applicant would have been eligible for forgiveness was October 2017. As of September 2017, almost 740,000 public service professionals, including veterinarians, had submitted an employment certification form (ECF) signaling their interest in the PSLF program to the Office of Federal Financial Aid-making it potentially very costly to the federal government.

Perhaps not surprisingly, the program's future is now in jeopardy. A bill was introduced in December that would eliminate PSLF, among other reforms. H.R. 4508-also called the Promoting Real Opportunity, Success and Prosperity through Education Reform Act, or PROSPER Act-was introduced by representative Virginia Foxx (R-North Carolina) and is co-sponsored by representative Brett Guthrie (R-Kentucky).

President Trump's proposed 2018 budget also favors eliminating PSLF, though the document notes that the changes would be applicable only to loans entered into after July 1, 2018.

While the U.S. Department of Education, which oversees the Office of Federal Financial Aid, keeps track of the total number of borrowers who have submitted at least one ECF, the agency doesn't release industry-specific numbers, making it difficult to determine how many in the veterinary profession would be affected by these changes.

“We know that there are many veterinarians counting on the program, because we've been trying to collect their stories,” says Kent McClure, DVM, JD, chief government relations officer for the AVMA. “Whenever you're talking to members of Congress, personal stories help. The AVMA has been working to identify veterinarians who are looking to be part of the Public Service Loan Forgiveness program so we can highlight why the program is so important to the profession when we talk to members of Congress.

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“We've had over 5,000 AVMA members write or call their member of Congress to talk about the importance of the PSLF program and the reform of the student loan program to make sure it's viable for graduate students,” Dr. McClure continues. “There's been a tremendous response, and all of these pieces working together is what makes it effective.”

As the program stands now, the Congressional Budget Office estimates that PSLF will cost the government more than $23.7 billion in the next 10 years. For the next three fiscal years, the estimate is $425 million in 2018, $1.015 billion in 2019, and $1.42 billion in 2020.

This isn't the first time PSLF has come under scrutiny. Before leaving office, President Obama proposed capping the amount of forgiveness at $57,500, but that measure didn't pass. Several other measures originating in the House in the 114th Congress (the current session is the 115th Congress) also proposed capping the amount at $57,500, according to the AVMA's Governmental Relations Division.

“The AVMA has been in frequent and regular communication with members of the House of Representatives and the Senate on the importance of loan programs for veterinarians, the critical levels of debt that veterinarians carry coming out of school, the need for viable options for servicing that debt and the importance of the PSLF program,” Dr. McClure says.

How you can get involved

The AVMA, AAVMC and more than 110 other veterinary organizations are working to keep the program in place, sending a letter to key members of the House Committee on Health, Education, Labor and Pensions and the House Committee on Education and the Workforce. The letter urges representatives not to eliminate the forgiveness program. Veterinarians can lend their support as well by sending a letter (available here) to their lawmakers and sharing their PSLF story with the AVMA's governmental relations team, who will share the experiences with government officials.

“The range of veterinary medicine that has signed on to this letter, I think is so helpful in making our case on the House of Representatives side and it really opened a lot of eyes,” says Cain. “That effort has been tremendous on behalf of veterinary medicine as a whole.”

Two congressmen, Brendan Boyle (D-Pennsylvania) and Ryan Costello (R-Pennsylvania), also formed a caucus to focus congressional efforts on protecting PSLF. In a press release announcing the caucus, Boyle pledged his support to keep PSLF alive: “We must do more to help folks drowning in student loan debt and to prevent the burdens of student loan debt from making one's desire to serve his or her community unattainable. The PSLF Caucus will focus on making good on our collective promise to public servants who have served their communities for years, often for low pay in positions that may have otherwise not been financially manageable, with the understanding that the 10-year-old Public Service Loan Forgiveness program would eventually help them lighten their burden of student debt. Current threats to end or limit the program are shortsighted, to say the least. PSLF is an incentive to our students and an investment in our future.”