While new salaries grow, debt remains a drag
Starting salaries for new veterinarians have begun to recover from the economic downturn of 2008 through 2012, according to the recently released AVMA 2015 Report on Veterinary Debt and Income. Mean starting salary was approximately $52,000 for students at U.S. veterinary colleges who had accepted a full-time position (including positions in private and public practice, internships, residencies, and advanced education training) prior to graduation in 2014. When only those students who had accepted a full-time position in private practice were considered, mean starting salary was nearly $67,000.
The news isn’t all positive, however. According to the report, mean educational debt for new veterinarians has grown by approximately $6,854 annually over the past 10 years and stood at an estimated $135,000 in 2014, more than twice the mean starting annual income for new private practice veterinarians.
Published this May, the report is an in-depth analysis by the AVMA Veterinary Economics Division of data from the Association’s Senior Survey, Employment Survey, and Veterinary Compensation Survey. It is the most comprehensive study on debt and income of both new and current veterinarians to date, incorporating data from 2001 through 2014 to identify short- and long-term economic trends in the U.S. veterinary profession.
“Descriptive statistics may present an interesting picture of the veterinary markets but offer little guidance in how to improve them,” observed Michael Dicks, PhD, Veterinary Economics Division director. “The AVMA Report on Veterinary Debt and Income provides the direction and magnitude of change for key variables such as mean starting salary and debt and the factors that affect them.
“To improve the economics of the profession will require understanding how these factors affect key variables and developing strategies to affect those factors.”
The AVMA report also contains two new key performance indicators for the veterinary profession: debt-to-income ratio and net present value of the veterinary degree. The DIR provides a measure of the financial health of new veterinarians entering the profession, while the NPV is a measure of the lifelong benefits of obtaining a veterinary degree. Look for additional stories on these key performance indicators and other aspects of the AVMA report in upcoming issues of JAVMA.
New veterinarian employment
Much of the new report’s section on debt and income of new veterinary graduates is drawn from responses to the Senior Survey, which the AVMA fields annually every April through the 28 U.S. veterinary colleges accredited by the AVMA. More than 12,500 students responded to the AVMA senior surveys from 2009-2014, representing a 95 percent response rate.
For the 2001-2014 period, roughly 55 percent of respondents accepted an offer for full-time employment in private or public practice, 24 percent accepted an internship or residency position or elected to pursue advanced education, 9 percent had not received any job offers, and 12 percent provided no response to the question. Over this period, however, the percentage entering an internship, residency, or advanced study program increased from approximately 20 percent to more than 30 percent, potentially representing a new long-term trend within the U.S. veterinary profession.
In 2014, the percentage of students indicating they had accepted an offer of full-time employment in private or public practice reached a six-year high of 43.7 percent, while the percentage of students who responded that they had not received any job offers or been accepted to an internship, residency, or advanced study program prior to graduation declined to a six-year low of 16.1 percent.
Since 2001, the companion animal and equine sectors have experienced the greatest reductions in percentages of new veterinarians taking full-time positions. However, looking at Senior Survey responses since 2009, when data on the types of internships accepted was first collected, one can see that these decreases are nearly commensurate with the increase in the numbers of internships accepted in those two sectors.
“Clearly, the growth in internships has been at the expense of full-time positions in companion animal and equine practices. The percentage of positions within private practice has not changed. What has changed is only the type of position, internship or regular employment,” the AVMA report states.
The percentage of new veterinarians pursuing advanced education has grown over the 14-year period studied, from just under 2 percent to over 6 percent. The most common degrees sought were a doctorate followed by a master’s in public health.
New veterinarian salaries
Mean full-time starting salary for all veterinary students who indicated in the AVMA Senior Survey that they had accepted an offer prior to graduation in 2014 was $51,917. Considering salaries only for those graduates who had accepted a full-time position in private practice, mean salary was $66,879.
Between 2001 and 2008, mean starting salary for all new veterinarians was increasing by approximately $1,200 per year. However, the 2008-2012 economic downturn triggered a downturn in starting salaries, and while starting salaries have begun to recover, they remain about $3,700 less than would have been expected if the long-term trend had continued.
The AVMA report goes on to explain that while full-time positions in private practice have consistently had the highest mean starting salary across all categories, mean salary paid to interns has been the lowest. Thus, the decrease in mean starting salary for all veterinary graduates from 2010-2012 can be attributed, at least in part, to the increase in the percentage of graduates accepting internship positions during this period.
“(T)he continued growth in the percentage of graduates taking intern positions has put a drag on the growth of the mean starting salaries of all graduates,” the report states. “The long term trend growth in the mean starting salary for interns has been roughly $624 per year, while the long term growth rate in mean starting salary for graduates accepting full-time positions prior to graduation has been approximately $2,624 per year.”
The AVMA report also points out that while mean starting salary was about $67,000 for students graduating in 2014 who had accepted a full-time position in private practice, there was great variation, with about a third of these individuals receiving salaries between approximately $45,000 and the mean of $67,000 and another third receiving salaries between $67,000 and approximately $90,000. The report identified several factors that help explain much of the differences in starting salaries, including practice type, region of the country, educational debt, and gender. For instance, new veterinarians in private equine practice had a starting salary that was, on average, $18,163 less than the starting salary for new veterinarians working in exclusively companion animal practices. New veterinarians in industry earned an average starting salary of $6,772 more than new veterinarians in companion animal–exclusive practice.
Additionally, new veterinarians working in California, Washington, Oregon, Nevada, and Hawaii earned a starting salary of $3,898 more, on average, than new veterinarians in Tennessee, Florida, Georgia, Alabama, and Mississippi. Female veterinarians earned a starting salary of $2,438 less than male veterinarians.
New veterinarian debt
Mean educational debt for U.S. veterinary graduates has outpaced mean starting salaries, regardless of practice type, since 2001, reaching a mean of $135,283 in 2014. Over this period, women consistently had higher mean debt at graduation than men, with the difference in mean debt averaging $4,856.
In concert with this increase in educational debt, according to the AVMA report, the mean cost of veterinary education at the 28 AVMA-accredited U.S. colleges has more than doubled over the past 15 years. However, the increase has not been uniform across the colleges, the report noted.
Factors contributing to the growing debt-income gap for new veterinarians include increasing numbers of graduates participating in internships, increasing numbers of female veterinarians (on average, women having higher debts and lower starting salaries than men), and increasing numbers of graduates who were not residents of the state where they attended veterinary school.
Variation in the debt of graduating veterinary students is considerable, according to the AVMA report, with roughly 20 percent of veterinarians who chose employment in private practice having debt in excess of $200,000, whereas another 20 percent have debt less than $50,000. A similar pattern exists for graduates seeking employment in public practice. The highest 20 percent have debt that exceeds $200,000, but the lowest 20 percent have debt that is less than $20,000.
The AVMA report also introduces the debt-to-income ratio, which the Veterinary Economics Division expects to track in coming years as a measure of the financial health of veterinarians entering the profession. Previous DIR have been calculated simply by dividing mean debt (calculated with or without values for students who graduated without any debt) by mean starting salary (calculated with or without values for students pursuing an internship, residency, or advanced study program). However, these ratios can be misleading because not all survey respondents provide data for both debt and starting salary. Going forward, the DIR will be calculated as the mean for only those graduates who provide information on both debt and starting salary. For 2014, the DIR was just over 2.
The 2015 AVMA Report on Veterinary Debt and Income can be purchased as part of a series of six reports on the economics of veterinary medicine. The series price is $249 for AVMA members and $499 for nonmembers. Order it online from the AVMA Store. For additional information, call 800-248-2862, ext. 6655.
Related JAVMA links:
Report sheds new light on veterinary employment (April 15, 2015)