Student Loan Re-payment Programs: What’s the Catch?

Every partner hospital is different, and so are we!
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As we partner with practices across the country, we’ve noticed significant deviations in the way employees are compensated depending on many factors. We’ve also noticed some “unorthodox” compensation solutions, including a new trend toward offering student loan repayment programs. In this post, we’ll try to unpack what all these different options mean, how to understand them, and how to ask right questions to know what you’re getting at the end of the day.

Understanding Overall Compensation

It’s important to understand your overall compensation because it’s about way more than just your take home pay. Base salary and potentially production pay are just the tip of the iceberg when it comes to all the different components of compensation that you receive. Two of the key questions for you to think through are:

  • What do you value most (ie: health benefits, take home pay, retirement plans, etc)? Identifying what’s important to you will help you know how to negotiate your compensation package.
  • What’s the ‘market rate’ for your skills and experience?

As we partner with hospitals around the country, we’ve seen how employee benefit packages vary widely across geographies, and – to a lesser degree – within markets. Where cost of living is the highest, particularly in the Northeast, benefit programs are the richest and where there is a lower cost of living – the South, Midwest and Mountain regions– the total compensation packages are generally in line with the lower cost of living.

Your overall compensation includes your base pay and production – but that is only the start. Employee benefit programs can be a big part of your compensation. The most typical benefit programs include:

  • Health insurance and some practices offer dental and disability
  • Matching contributions to a retirement program
  • Vacation and sick time
  • Mobile phone allowance
  • Continuing Education allowances, and
  • Paying for AVMA and state VMA dues as well asDEA and state licenses
  • Professional liability insurance

Employer-provided benefits offer enhanced value (roughly 30% more, depending on your tax bracket) because you “pay” for them in pre-tax dollars.

New Trends in Compensation

The most recent trend we’ve seen in the market place relates to assistance on student loan debt repayment. On the surface, this feels like a really good ‘hook’ and may lead veterinarians with large debt loads to look more favorably at employers they may not typically be interested in. As a job seeker, you should ask a few questions about this benefit.

  • If you take the Debt Relief benefit are you offered the same base salary/ production pay percentage as if you didn’t take the benefit?
  • Do you get the same CE allowance and other benefits whether you take the program or not?
  • Is the Debt Relief paid with pre-tax or post-tax dollars? (typically, it would be taxable income but make sure you ask the question)
  • If you do not have student loan debt, are you going to be paid less for the same role?

Essentially the questions come down to – is the employer ‘robbing Peter to pay Paul’ – meaning they are just paying you the same total amount but putting the dollars into different buckets? At this point the programs are too new to fully understand their impact and effectiveness, but asking good questions will help you personally assess the situation!

In today’s tight labor market, it is important for veterinarians to understand all the components of their compensation and to ensure they are getting market pay and benefits for the region. Providing attractive benefits – especially comprehensive health care coverage and retirement benefits – is core to VPP’s philosophy of attracting and retaining the most talented DVMs in the industry.

Learn more about VPP’s co-ownership approach

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