How to Manage Student Loans

The Vetducator - CPI vs home prices vs. tuition costs graph.

Higher education has become incredibly expensive.  There are many reasons for this, including expanding administrator numbers and salaries, declining state support, schools expanding offerings to compete for paying clients (students), and a bubble for student loans.  Regardless, you want to go to vet school (or are in vet school) and need to figure out how to pay for it.  Assuming you do not have sufficient funds on your own or from your family, you may need to borrow money. Here are some considerations and strategies to minimize the amount you have to borrow, so you can be as free as possible once you graduate.

School Choice.  You want to attend your local state school if at all possible.  Don’t go in for expensive out-of-state, out-of-country, or private schools.  This is one of the most important decisions you can make with respect to your financial future.  Attend the least expensive school you can.

Frugal Living.  I know one vet who bought a brand new car during vet school and just added it to his student loans, which totaled more than $200k by graduation.  That is unacceptable.  You need to live a frugal life- which does not mean a life devoid of all pleasures.  Believe it or not, you can have a great life without spending more than all the money you have.  And you can get a great education at a fair price.

Avoid Interest.  When it is working for you, compound interest is amazing.  However, if you are taking out a loan you have to pay back, compound interest is the worst.  You need to make sure loans you take minimize your interest as much as possible. Ideally, you should find loans which have the interest taken care of.  If you take loans which immediately begin to accumulate interest, you will be much worse off after four years in vet school. Maybe even family can give you low-interest loans.  Whatever you can do to minimize accruing interest you should do.

Is it still worth it, economically, to go to vet school?  It depends a lot on where you go to school, how you live, and what types of loans you take out.  If you go to a private school or out-of-state school, live high on the hog and take out interest-bearing loans, you could find yourself $300k in debt with poor prospects- especially if the economy turns south.  Maybe you could be just as happy doing a Ph.D. in Biochemistry?  If you insist on going to vet school, be mindful of your decisions and how they affect your future freedom.  And for god’s sake don’t buy a new car in vet school.

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