Veterinary students listen to a speaker during the "Elephant in the
Room" sessions about educational debt at the recent meeting
of the American Animal Hospital Association.
Melissa Austin probably will owe about $100,000. Ingrid Rhinehart's loans could total as much as $200,000. Kelvin Urday counts himself lucky because he might have only $40,000 in debt.
These veterinary students were among many who attended sessions about educational debt during the recent meeting of the American Animal Hospital Association, March 26-29 in Phoenix.
The "Elephant in the Room" series debuted in 2008 at the North American Veterinary Conference, and some veterinary colleges have held similar sessions to look at approaches to addressing student debt.
The AAHA "Elephant in the Room" sessions focused less on reducing the cost of higher education and more on managing educational debt. The sessions featured three speakers who discussed how student debt can play out for recent graduates in terms of career paths, the return on investment for a veterinary degree, and personal finances.
Dr. Karen E. Felsted, the CEO of the National Commission on Veterinary Economic Issues, spoke about how student debt can influence career choices.
Student debt has been rising faster than starting salaries, she noted. The mean starting salary for veterinarians in 2008 was roughly $60,000, according to the AVMA Graduating Seniors Survey, while the mean student debt was roughly $120,000.
"More debt of any kind reduces your options," Dr. Felsted said.
The only realistic solution for recent graduates to pay off student debt is to earn more money, Dr. Felsted said. Associates often earn more at practices that pay partly on the basis of production, as long as they pick a practice where they can be productive. Practice ownership is a good option because owners make more money than associates—and business lenders don't consider student loans to be bad debt. Public or corporate jobs often offer attractive salaries.
In addition, Dr. Felsted said, new veterinarians might need to consider emergency or relief work. While electing to complete an internship has become common, she said, no evidence exists that an internship increases earnings—and it means a year at low pay.
Dr. John D. Tait, incoming AAHA president and managing partner of the Ontario Veterinary Group, spoke about the value of a veterinary degree.
"We have to understand how debt translates into value and what to do when we have debt," Dr. Tait said.
In calculating return on investment for a veterinary degree, Dr. Tait said, one must consider the total return versus the total debt—not just starting salary. He said the return is social as well as financial. Veterinarians enjoy a variety of career choices, employment stability, autonomy as professionals and often as business owners, and the chance to help patients and clients.
Dr. Tait said debt management really should start in veterinary school, though. Students should make a budget and consider negotiating the terms of their loans before they graduate. Options include moving loans to a low-interest carrier, changing the length of loans, and scaling loan payments to income.
Fritz Wood, owner of H.F. Wood consulting, disagreed somewhat with the other speakers' views on student debt.
"I think the situation is a crisis," Wood said. "It's very clear to me that the trends are not sustainable."
Wood said he doesn't think veterinary students should have to base their career choices on finances alone. He added that financial planners advise students in general not to borrow more than the starting salary in a field.
About 25 years ago, Wood said, the debt load of veterinary students was slightly less than starting salaries in the profession.
During the panel discussion, the students in the audience asked not only about career paths but also about the cost of higher education. The speakers and the faculty in the audience cited a dramatic decrease in state funds as a major factor in tuition increases (see page 1352).
"The mean starting salary for veterinarians in 2008 was roughly $60,000, according to the AVMA Graduating Seniors Survey, while the mean student debt was roughly $120,000."
Wood concluded the AAHA "Elephant in the Room" sessions with a presentation about personal finance. He said the fundamentals are the same for veterinarians as for everyone else. He advised veterinary students to establish and protect good credit, minimize bad debt, and start saving early for retirement. He explained that good debt includes loans for items that increase income, such as a veterinary degree or equipment, or items that appreciate in value, such as a house.
Austin, one of the veterinary students who attended the AAHA sessions, is in her fourth year at the University of Missouri-Columbia. She is active in the Veterinary Business Management Association, an organization of veterinary students who want to increase their business knowledge.
Austin was struck by the difference of opinion between Wood and Dr. Tait during the AAHA "Elephant in the Room" sessions. She still thinks student debt is a problem, though, and not just a problem for students. She said the veterinary colleges, industry, and associations are trying to help find solutions.
"There is no one solution, but we can all make a good effort," Austin said.
She said students can work part time, as she did for two years. Practice owners who plan to retire might develop an exit strategy that helps an associate take over.
Austin, who will owe about $100,000 after graduation, plans to be an associate at a small animal practice. She hopes to own a practice eventually, but she feels that she needs to gain more experience first.
Rhinehart, the student who could owe as much as $200,000, is in her second year at Cornell University. She is president of the Cornell chapter of AAHA, and she is active in the VBMA.
At the "Elephant in the Room" sessions, Rhinehart learned more about what practitioners expect of recent graduates from the general discussion and discussion at her table. She came away with ideas for improving her communication skills and increasing her surgery experience.
As for student debt, Rhinehart sees the issue as a professional concern that could become a big problem if the trends continue. She said one solution might be for practitioners to make an effort to mentor recent graduates so new veterinarians don't feel the need to take an internship at low pay to gain experience.
"We are going to be prepared to be veterinarians, but we just need help those first few years while we're getting our feet wet," Rhinehart said.
Rhinehart's debt is high because she's starting a second career and still has student loans from her undergraduate studies. Yet, the "Elephant in the Room" series has reassured her that she can become a practice owner down the road.
Urday, the veterinary student who might only owe $40,000, is in his second year at Missouri. He is president of the AAHA student chapter and vice president of the AVMA student chapter.
At the AAHA "Elephant in the Room" sessions, Urday was happy to discover that veterinarians make a decent living in many types of practice. He still believes, though, that many practitioners don't charge what they're worth.
Urday's debt is relatively low because he found a state program that pays for three years of veterinary college if he works part time for three years after graduation assisting in the development of a disaster response plan for animals in Missouri. He wants to work in small or mixed animal practice the rest of the time.
"General practice is a big passion of mine, and I love public health, but I don't know where I'm really leaning toward," Urday said. "People shouldn't settle on one idea of their career because you never know what's going to happen."
Despite having less debt than many students, Urday sees student debt as an issue for the whole profession. He's glad that students and organized veterinary medicine have pushed to continue discussing the elephant in the room.