H.R. 2398: Rural Veterinary Workforce Act

Introduced Mar 27, 202561 cosponsors

Sponsor

Adrian Smith

Republican · NE-3

Rural vets shouldn't be taxed on loan relief

3 min readLast updated July 30, 2026

Why it matters

Veterinarians who take shortage-area jobs can get student loan help — then owe federal tax on it. H.R. 2398 would make qualifying federal and state veterinary loan repayment or forgiveness tax-free starting in 2026, so more of that aid actually reaches the vet.

H.R. 2398 would make certain veterinary student loan repayment and forgiveness benefits tax-free, so vets serving hard-to-staff areas keep more of the help they were promised.

Right now, some loan assistance can count as taxable income. That means you may owe taxes on money that goes straight to your student debt instead of your checking account.

This bill adds the federal veterinary loan repayment program run under agriculture law and also covers state programs designed to expand access to veterinary services. In practice, if a state offers loan help to get more vets into underserved areas, that assistance could qualify for the same tax-free treatment.

The bill does not create a new repayment program or new grants — it makes existing loan help worth more by removing the tax hit.

The change would apply to amounts received in tax years beginning after December 31, 2025. So the bill's effect is delayed, but the policy goal is immediate: make shortage-area veterinary jobs easier to take and keep.

Bill Progress

IntroducedMar 27

Committee

Pass House

Pass Senate

Signed

Law

Latest Action · Mar 27, 2025

1/4

Referred to the House Committee on Ways and Means.

H.R. 2398 Bill Summary

What H.R. 2398 actually does.

Federal veterinary loan help becomes tax-free

H.R. 2398 adds the federal veterinary student loan repayment program under agriculture law to the list of benefits that are excluded from federal taxable income.

State vet loan programs can qualify too

State loan repayment or loan forgiveness programs would also qualify if they are intended to increase access to veterinary services in that state.

Loan forgiveness counts, not just repayment

The bill covers both repayment assistance and loan forgiveness, so states and programs are not limited to one type of debt relief.

Tax-free treatment starts in 2026

The change applies to amounts received in taxable years beginning after December 31, 2025, so qualifying aid would become tax-free starting with 2026 tax years.

Who benefits from H.R. 2398?

Veterinarians taking shortage-area jobs

If you rely on loan assistance to work in a rural or underserved community, H.R. 2398 would let you keep the full value of qualifying help instead of losing part of it to federal taxes.

Recent vet school graduates with large debt

New veterinarians often leave school with six-figure student debt. Tax-free repayment assistance can make lower-paying public-interest, rural, or food-animal practice jobs more financially realistic.

States trying to recruit more veterinarians

States could make their existing loan programs more competitive without creating a bigger benefit on paper, because the same dollars would go further after taxes.

Farmers, ranchers, and pet owners in underserved areas

They benefit indirectly if stronger loan incentives help communities attract and keep veterinarians who are otherwise hard to recruit.

Who is affected by H.R. 2398?

Veterinarians receiving qualifying debt relief

They would no longer count covered repayment or forgiveness as federal taxable income once the bill takes effect.

States with veterinary workforce programs

States would need to make sure their programs are structured to increase access to veterinary services if they want participants to receive the federal tax break.

Federal budget and tax administrators

The federal government would collect less tax from covered loan assistance, and IRS guidance would need to reflect the expanded exclusion.

Veterinarians outside qualifying programs

Not every vet would benefit. The tax break is limited to specific federal and state repayment or forgiveness programs tied to expanding access to veterinary services.

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Tracking floor activity — no debate on H.R. 2398 yet. Updates when a legislator speaks on the record.

HR2398 Legislative Journey

1 actions

House: Committee Action

Mar 27, 2025

Referred to the House Committee on Ways and Means.

About the Sponsor

Adrian Smith

Republican, Nebraska's 3rd congressional district · 19 years in Congress

Committees: Joint Committee on Taxation, Ways and Means

View full profile →

Cosponsors (61)

No new cosponsors in 30 days

This bill has 61 cosponsors: 35 Democrats, 26 Republicans, reflecting bipartisan support. Cosponsors represent 31 states: Alabama, California, Colorado, and 28 more.

35Democrats26Republicans·31 statesBipartisan

John Larson

Democrat · CT

Michelle Fischbach

Republican · MN

Jimmy Panetta

Democrat · CA

Randy Feenstra

Republican · IA

Melanie Stansbury

Democrat · NM

David Rouzer

Republican · NC

Mike Carey

Republican · OH

Nikki Budzinski

Democrat · IL

Chrissy Houlahan

Democrat · PA

Donald Davis

Democrat · NC

Trent Kelly

Republican · MS

Brad Finstad

Republican · MN

Committee Sponsors

Ways and Means Committee

19D26R

|11 signed34 not yet

11 of 45 committee members cosponsored

20 Republicans across this committee haven't cosponsored yet. Mobilize their constituents

H.R. 2398 Quick Facts

Cosponsors

+56 more

Committee: Ways and Means
Chamber: House
Policy: Taxation
Introduced: Mar 27, 2025

Referred to the House Committee on Ways and Means.

Mar 27, 2025

Constituent Resources

Find your legislators on H.R. 2398

Get notified when this bill moves

Official Sources

H.R. 2398 on Congress.gov

Official bill page with status, text, cosponsors, and actions for the Rural Veterinary Workforce Act.

USDA Veterinary Medicine Loan Repayment Program

This is the federal veterinary loan repayment program the bill references through 7 U.S.C. 3151a.

7 U.S.C. 3151a on U.S. House Office of the Law Revision Counsel

Official U.S. Code page for the statute cited in the bill text establishing the veterinary loan repayment authority.

26 U.S.C. 108 on U.S. House Office of the Law Revision Counsel

Official U.S. Code page for Internal Revenue Code section 108, which the bill amends to exclude qualifying assistance from taxable income.

IRS Student Loan Cancellation and Repayment Assistance Information

IRS guidance relevant to how canceled debt and certain repayment assistance are treated for federal tax purposes.

USDA National Institute of Food and Agriculture

NIFA is the USDA agency that administers veterinary workforce support programs including the federal loan repayment program referenced by the bill.

Government Publishing Office bill text for H.R. 2398

Official federal publication of the introduced bill text showing the exact amendment to the Internal Revenue Code.

CBO Cost Estimates

Official Congressional Budget Office page where any score or cost estimate for H.R. 2398 would appear if one is issued.

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H.R. 2398 Common Questions

What does H.R. 2398 actually do?

It makes certain veterinary student loan repayment and loan forgiveness benefits tax-free at the federal level. The bill covers a federal vet program and qualifying state programs aimed at expanding access to veterinary care.

When would the tax break start?

For amounts received in tax years beginning after December 31, 2025. In practice, that means qualifying aid would become tax-free starting with 2026 tax years.

Does H.R. 2398 cover the federal veterinary loan repayment program?

Yes. H.R. 2398 specifically adds the federal veterinary loan repayment program under agriculture law to the tax exclusion.

Would state veterinary loan programs count too?

Yes, if the state program is intended to increase access to veterinary services in that state. The bill extends the tax break beyond the federal program.

Is this only for loan repayment, or loan forgiveness too?

Both. H.R. 2398 covers qualifying loan repayment assistance and qualifying loan forgiveness programs.

Does H.R. 2398 create a new veterinary repayment program?

No. It does not create a new grant or repayment program. It only changes the federal tax treatment of certain existing veterinary debt-relief programs.

How much could this save a veterinarian in taxes?

It depends on the size of the benefit and your tax bracket. For example, $25,000 in qualifying loan help at a 22% federal rate could mean about $5,500 in tax avoided.

Based on H.R. 2398 bill text

H.R. 2398 Bill Text

“To amend the Internal Revenue Code of 1986 to provide for an exclusion for assistance provided to participants in certain veterinary student loan repayment or forgiveness programs.”

Source: U.S. Government Publishing Office