Providing for the rural veterinarian loan repayment program, including by allowing a loan repayment recipient to exclude net income attributable to loan payments received under the program

BACKGROUND.226 establishes a rural veterinarian loan repayment program (program) administered by the college student aid commission (commission). The purpose of the program is to provide for the repayment of a student loan (eligible loan) to an individual who is either enrolled in the final year of a college of veterinary medicine in order to receive a doctor of veterinary medicine degree or who is a licensed veterinarian who received a degree within five years of applying to participate in the program. The individual must enter into a program agreement (agreement) with the commission in which the commission assumes the payment of the eligible loan and the loan repayment recipient (recipient) agrees to engage in the practice of veterinary medicine (practice) for four years in a rural service commitment area or a veterinary shortage area (rural area). The commission assumes eligible loan payments each year of the recipient’s eligible practice for a period of four consecutive years. An eligible loan payment amount cannot exceed $15,000 annually and cannot exceed a total of either $60,000 or the amount of the outstanding eligible loan. BILL’S PROVISIONS. Currently, the commission may grant a recipient a waiver to complete the years of practice required under the agreement in another rural area. This bill provides that the recipient may notify the commission that the loan recipient will complete the years of practice required under the agreement by securing new employment, or establishing and maintaining a new practice, in the same rural area, according to rules adopted by the commission. The bill allows the recipient to exclude net income attributable to eligible loan payments received under the program, subject to the restrictions provided in the program. The amount subject to the income exclusion cannot exceed $15,000 per tax year, and an aggregate of $60,000 for all tax years. However, in any case, the total excluded amount cannot exceed the amount of the recipient’s outstanding eligible loan.