A bill introduced in the U.S. Senate would encourage more veterinarians to practice in underserved rural areas by eliminating taxes on federal programs aimed at alleviating student debt.
Sens. Debbie Stabenow, D-Mich., and Mike Crapo, R-Idaho, introduced the Veterinary Medicine Loan Repayment Program Enhancement Act. It expands the Veterinary Medicine Loan Repayment Program, a 2003 law that provides up to $25,000 a year to repay student loans in exchange for a minimum of three years of service in one of the USDA’s rural veterinary shortage areas.
Currently, there are 221 veterinary shortage areas in 48 states, according to USDA.
The average cost of veterinary school fluctuates between $200,000 and $275,000. In 2020, the average student loan debt for graduates was $188,000 — a 2.6% increase from 2019’s $183,000 average.
VMLRP provides a helpful hand to graduates with its debt assistance; however, the federal government now taxes the funding. The withholding taxes equal 37%, which many veterinary advocates believe obstructs the program’s success.
“Qualified veterinarians in agricultural communities across the nation are a key part of maintaining animal health and welfare, and ensuring ranchers and farmers have access to care for their livestock,” said Crapo in a press release. “Overly burdensome federal taxes on the Veterinary Medicine Loan Repayment Program limit the reach of the program’s benefits, and addressing those limitations would allow more veterinarians to have the opportunity to practice in small, rural communities where their services are in critical need.”
If it becomes law, the bill would end federal withholding taxes on program awards, which in effect would provide more financial help to new veterinarians and allow the program to reach more communities that need services.
The bill is sponsored in the House by Reps. Adrian Smith, R-Neb.; Kurt Schrader, D-Ore.; and Dusty Johnson, R-S.D.
“The proposed legislation reintroduced today is a common-sense solution to enhancing a program that helps address two of the biggest challenges the veterinary profession faces — student debt and rural veterinary shortages," said Dr. Douglas Kratt, AVMA president, in a press release. "Eliminating the tax on VMLRP service awards would allow more veterinarians to reach rural communities that need their essential services.”