Efforts evolve on how to address educational debt

The mean nominal debt of all U.S. veterinary graduates increased from $50,000 in 2001 to $150,000 in 2018. That works out to an annual increase of 7 percent, or $6,262 each year, said Bridgette Bain, PhD, associate director of analytics with the AVMA Veterinary Economics Division. These increases in reported debt, taken from AVMA Senior Surveys, are a function of tuition and fees, the number of students paying in-state versus out-of-state tuition, public funding, and cost of living. Of course, not all veterinary colleges had increases at the same rate.

For example, at the University of Wisconsin-Madison School of Veterinary Medicine, the annual increase in educational debt of in-state graduates was 0.13 percent from 2006-18, and at the Texas A&M University College of Veterinary Medicine & Biomedical Sciences, the increase was $787 annually in that time. Comparatively, Tuskegee University School of Veterinary Medicine's in-state graduates saw a 13.14 percent annual increase over those 12 years. In-state Kansas State University veterinary graduates saw a 9.08 percent mean annual increase in debt.

"We do have some schools, for some reason, where students are graduating with lower levels of debt," Dr. Bain said. "We can't change the cost of tuition, but maybe we can learn from schools that do well and copy that."

Dr. Bain presented information on educational debt and starting salaries during the session "The Collaborative Approach of the Veterinary Debt Initiative" at the AVMA Veterinary Leadership Conference, Jan. 10-13 in Chicago.

VDI update

The Veterinary Debt Initiative is an outgrowth of the Fix the Debt summit, held in the spring of 2016 at Michigan State University, and is intended to tackle the issue of educational debt. The VDI has since evolved into an effort among the AVMA, Association of American Veterinary Medical Colleges, and Veterinary Medical Association Executives.

The VDI's focus, as of late, has been on developing resources to help veterinary students and veterinarians navigate "critical junctures" in their financial pathway that have an outsize influence in determining whether they flourish financially.

The VMAE website covers financial literacy and helping practitioners improve their practice management, for example. The AVMA's My Veterinary Life website is dedicated to providing information and resources on personal well-being, financial literacy, and career success, and the site features tools developed by the AVMA Veterinary Economics Division. And the AAVMC hosts the VDI website which provides "new and noteworthy" best practices and examples from veterinary colleges and elsewhere to inspire others or encourage them to get involved.

Dr. Andrew Maccabe, AAVMC CEO, said the reality is that students should not expect to see any decreases in tuition.

"Most veterinary schools have very little control over tuition, which is often set at the university level," Dr. Maccabe said. "It's a complicated process, and every university handles it differently. Although it may seem logical that you could reduce tuition by cutting costs, for instance by cutting faculty numbers, higher education doesn't always work that way. Every school is committed to providing the highest-quality education possible, and every dean has a list of improvements they would like to make. As money becomes available, they will put that back into the program to improve quality. So, even if they were cutting costs, it wouldn't necessarily lower tuition."

An often-suggested solution to helping students deal with their educational debt is to increase financial education. But Dr. Maccabe cited studies suggesting that providing general financial education will increase financial literacy but that general education will not substantively change behavior. Instead, it is more effective to provide financial education that is time-limited, deadline-oriented, and focused on a specific activity, such as buying a practice or taking out loans.

"Maybe every student should go through financial counseling right before taking out their educational loans," Dr. Maccabe said. "This is where we need to shift our focus. We've got to be more targeted and smarter about the way we provide financial literacy education."

Relatedly, the AVMA House of Delegates passed recommendations last summer that would have the AVMA investigate the following:

• Methods to make financial advisers available to help applicants, students, and recent graduates manage the cost of education.
• Strategies for private practitioners to assist students and recent graduates with managing the cost of education.
• Development of a financially sustainable low-interest loan program for students and recent graduates.
• Consideration of developing a toolbox of advocacy strategies to assist state VMAs to promote increased funding for higher education loans and repayment programs.

The AVMA Board of Directors reviewed the recommendations at its September meeting, said Dr. David Granstrom, assistant executive vice president of the AVMA. The Association is currently investigating the first recommendation. Regarding the second, he said, "There are some exciting things going on in the background we can't talk about at this time, but hopefully in the not-too-distant future, we'll have something to say about this."

The fourth recommendation, Dr. Granstrom added, was looked at by the AVMA State Advocacy Committee, which determined a number of resources are currently available, including a map of state loan forgiveness programs at jav.ma/stateloanprograms.

Advocacy efforts

Part of the VDI's mission is dedicated to advocacy on state and federal initiatives to ensure the unique financial needs of the veterinary profession are heard and represented in policymaking.

Alexandra Sands, an assistant director for the AVMA Government Relations Division, said the AVMA's—and by extension the VDI's—advocacy priorities are as follows:

• Preserve and protect the Public Service Loan Forgiveness Program.
• Restore subsidized Stafford loans for graduate students.
• Establish a federal refinancing option.
• Eliminate origination fees, and lower interest rates.
• Maintain higher borrowing limits for federal student loans.
• Increase awareness of income-driven repayment plans.
• Maintain the Perkins loan program.
• Increase financial literacy.

The Higher Education Act is the sweeping law governing federal higher education programs. It was last reauthorized 10 years ago, making it ripe for Congress's attention. The most recent efforts stalled because of fundamental policy divisions during the 115th Congress. The House, then controlled by Republicans, considered HR 4508—the Promoting Real Opportunity, Success and Prosperity through Education Reform Act—which would have done the following:

• End the Public Service Loan Forgiveness Program for future borrowers.
• Eliminate graduate lending programs.
• Eliminate flexible repayment options, including time-based loan forgiveness that is currently available through income-based repayment plans.

"There's certainly opportunity for improvements (in the complex financial aid system), but instead of streamlining the HEA, the PROSPER Act would eliminate and consolidate programs for graduate students," Sands said. "It was a devastating bill for our purposes and contradicted our goals. You can see the contrast of what we asked for, what our needs are, and what was in this bill."

A Senate bill was expected but never introduced. The PROSPER Act was approved by the House Committee on Education and the Workforce by a 23-17 party-line vote in December 2017 but failed to advance beyond that. Sands credits advocacy efforts such as the AVMA Legislative Fly-In, AVMA members contacting their representatives, and member engagement through the AVMA Political Action Committee as critical to highlighting the educational policy needs of the veterinary community as well as concerns about the impact of the PROSPER Act.

Now, in the 116th Congress, Sands said that Democrats, who now control the House, have expressed interest in advancing HEA reforms this year, this time with a greater emphasis on bipartisan legislation. In the Senate, Lamar Alexander, who chairs the education committee, has a background in education but is term-limited and thus motivated to advance an HEA rewrite before his retirement.

The House is also expected to conduct Congressional oversight of the Department of Education on a number of issues, including Public Service Loan Forgiveness, borrower defense, and loan servicers.

"Members of Congress have shown they are supportive of PSLF and want to know more about what's happening behind the low forgiveness rates that we have seen to date," Sands told JAVMA News.

Related JAVMA content:

Salaries, debt for new graduates continue to increase (Dec. 15, 2018)

Education costs, global roles worry AVMA delegates (Sept. 1, 2018)

Veterinary push for Farm Bill, Higher Education Act (June 1, 2018)

Divided by debt (Jan. 1, 2018)

AVMA backs bills on student loans, debt (Jan. 1, 2018)

Students limited in ability to control educational debt (June 15, 2017)

Taking a multipronged approach to tackling educational debt (Jan. 1, 2017)

Students defining financial literacy (Oct. 15, 2016)