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Bill Would Remove Tax on Vet Med Loan Repayment Program

If taxes are removed from the USDA program, more veterinarians could participate in the program, officials note.


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With the rising cost of a veterinary education, new veterinarians naturally seek out ways to help pay off their school debt. One way to do that is through the U.S. Department of Agriculture’s Veterinary Medicine Loan Repayment Program. If veterinarians choose to work in rural areas or areas with a lack of veterinary services, they can receive up to $25,000 dollars a year for up to three years of service to help pay back their loans. This program is run by the USDA’s National Institute of Food and Agriculture (NIFA).

However, there’s always been one problem with this program: The IRS taxes the funds allocated by Congress for the fund. Those taxes leave less money for the program; if the program wasn’t taxed, that would mean money for additional veterinarians to enter the program. That’s according to calculations made by the American Veterinary Medical Association

“The VMLRP is a win-win for veterinarians and rural economies because it provides loan relief while also helping alleviate veterinary shortages in areas that lack adequate access to veterinary services for livestock animals,” said AVMA President Tom Meyer on the AVMA website. “Unfortunately, the heavy tax applied to VMLRP awards decreases the number of awards that can be made and the number of rural communities that can benefit from increased services.”

There's reason to hope, however: Members of Congress seem to realize this problem too. In March 2017, Senator Mike Crapo of Idaho and Senator Debbie Stabenow of Michigan introduced S.487, the Veterinary Medicine Loan Repayment Program Enhancement Act. Rep. Adrian Smith of Nebraska and Rep. Ron Kind of Wisconsin put forth the House counterpart, H.R. 1268. According to the bills’ description, “This bill amends the Internal Revenue Code to exclude from gross income payments under the federal veterinary medicine loan repayment program or any state loan repayment or forgiveness program that is intended to provide for increased access to veterinary services in such state.”

Currently, both bills haven’t moved past the committee stage, but their sponsors know the importance of veterinary service in these rural or low-access areas.

“Access to animal care is critical to Idaho’s agricultural economy,” Rep. Crapo told the AVMA. “But too often, ranchers and farmers can’t access the care they need because they live in areas where demand for veterinary services exceeds availability. This legislation will increase the number of veterinarians able to serve in the areas where they are needed most, which will help strengthen rural economies and protect the safety of our food supply.”

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