December 15, 2019
Good news, bad news for educational debt, starting salaries
The good news is that veterinarians’ starting salaries as well as the number of full-time employees in the profession are increasing. And many veterinary colleges have experienced a year-over-year decrease in graduates’ educational debt. The bad news is that just about the same number of institutions have seen an increase in graduates’ educational debt, some by as much as 29%. And U.S. graduates of two Caribbean veterinary schools have more debt than graduates of U.S. schools but see the same starting salaries.
Bridgette Bain, PhD, associate director of analytics in the AVMA Veterinary Economics Division, presented these results from the AVMA survey of the 2019 graduating class while speaking at the 2019 AVMA Economic Summit, held Oct. 22-23 in Rosemont, Illinois. She said she would like to see more participation from the Caribbean schools to develop a better understanding of their unique challenges and needs. The response rate this year was 45% from U.S. veterinary students at Ross University in Basseterre, St. Kitts, and St. George’s University in Grenada, both located in the West Indies.
Among this year’s veterinary students surveyed, 28% said they were pursuing an internship after graduation, which is the smallest percentage since 2009. Meanwhile, half said they were going into companion animal medicine. The percentages of those going into food animal and equine medicine remained flat at about 3.5% and 1.2%, respectively.
The mean starting salary for 2019 U.S. graduates finding full-time employment prior to graduation was $84,982. The real weighted mean starting salary, in 2014 dollars, increased from $73,626 in 2017 to $76,633 in 2018 to $78,413 in 2019. These numbers are weighted to account for changes in gender, practice type, and region.
“Income still has not recovered to what it should be, had there not been the financial crisis,” Dr. Bain said, referring to the Great Recession. “The number of new veterinarians and salaries were on the decline during the recession, but since 2013, more new grads are finding employment and at a higher starting salary.”
She also noted that the gender income gap has decreased from 4% to 3% in the past year. Female veterinarians are still generally offered a lower starting salary compared with male colleagues. They have slightly lower mean educational debt, with around $150,000 in educational debt for female veterinarians and $146,000 for male veterinarians.
The overall debt-to-income ratio among veterinary graduates has decreased from 2.26:1 in 2018 to 1.81:1 in 2019, bringing it close to the DIR of 1.86:1 in 2017. Dr. Bain said the first-time inclusion of the two new veterinary colleges at Midwestern University in Glendale, Arizona, and Lincoln Memorial University in Harrogate, Tennessee, contributed the most to the sharp increase last year.
The mean educational debt of all 2019 graduates from U.S. veterinary colleges, including those without debt, was about $149,877. The real mean educational debt, in 2014 dollars, went from $133,086 in 2017 up to $143,121 in 2018 and down to $138,000 in 2019. Dr. Bain estimates the mean educational debt among graduates could reach $190,000 or so in 10 years.
About 17% of veterinary graduates reported zero debt, a percentage that has been growing for the past five years. Not counting that group, the real mean educational debt for graduates this year was closer to $185,000 in 2014 dollars. About 61% of students borrowed up to $50,000 more than the total cost of education plus interest. A third or so borrowed between $50,000 and $100,000 over the total cost plus interest. AVMA economists calculate the total cost of education plus interest by using the veterinary college’s published cost of attendance each year and estimating the interest rate on loans at the beginning of each semester.
The percentage of 2019 graduates who had a debt-to-income ratio of zero, 21%, nearly equals the percentage of those who had a DIR at or over 4:1, 20%.
From 2018-19, about half of veterinary colleges experienced a decrease in graduates’ mean educational debt, led by the University of Pennsylvania at a 31.7% overall reduction, followed by Cornell University at 15.3%. However, nearly just as many institutions saw an increase in graduates’ mean educational debt, with the University of Florida seeing the greatest increase at 29.3%, followed by Midwestern University at 23.7%.
Part of that has to do with the cost of tuition. The mean annual resident tuition has ballooned, from $10,549 in 1999 to $30,392 in 2019. For the mean annual nonresident tuition, that figure has grown from $20,857 in 2001 to $49,934 in 2019.
The educational debt held by U.S. veterinary graduates of Ross University and St. George’s University remains much higher overall than that of graduates of U.S. veterinary colleges, even when considering only those who pay nonresident tuition. It comes out to a difference of about $90,000, at a mean educational debt of $274,942 for U.S. graduates of the two Caribbean schools versus $184,931 for nonresident graduates of U.S. veterinary colleges this year. Dr. Bain looked at these differences more in depth in a recent report in JAVMA (J Am Vet Med Assoc 2019;255:1137-1141).
At the same time, Dr. Bain said, there’s no statistical difference in starting salaries among graduates of U.S. veterinary colleges and U.S. graduates of these two Caribbean veterinary colleges.
This explains why the overall debt-to-income ratio in 2019 was 3.34:1 for U.S. graduates of the Caribbean schools who found full-time employment, compared with 1.81:1 for graduates of U.S. colleges. Among U.S. graduates of the Caribbean schools, 15% had a zero DIR, and 41% had a DIR of 4:1 or more.
Lisa Greenhill, PhD, EdD, senior director of institutional research and diversity at the Association of American Veterinary Medical Colleges, noted that students choose veterinary schools for more reasons than just cost. She said often students who have a lot of debt have gone through major incidents during school, such as a divorce or medical emergency.