Student educational debt is growing 4.5 times as fast as income for new veterinary graduates, according to a presentation by Bridgette Bain, PhD, associate director of analytics at the AVMA.
Dr. Bain spoke on “Supply and Demand in the Market for Veterinary Education” at the annual AVMA Economic Summit, held virtually Oct. 26-28, drawing largely on data from the 2020 AVMA Senior Survey. She said the way student debt is increasing quicker than starting salaries is not sustainable.
“We have to keep our eye on it so we can develop strategies and we can work to counteract this,” she said.
Although there has been an overall increase in the debt-to-income ratio, debt for veterinary students in the 2020 graduating class varies greatly by institution.
For example, Washington State University and Purdue University both had a decrease of more than 10% in mean veterinary educational debt, whereas Mississippi State University and Auburn University had increases of greater than 15%.
“This means there is a conversation to be had,” Dr. Bain said. “What can the schools that manage to graduate students ... with a (year-over-year) reduction in debt teach the schools that have a year-over-year debt level increase of up to 20%? What can we learn from each other so we can have a better situation for the entire profession?”
Dr. Bain also discussed data that show the debt load varies by race. Black or African American graduates had more debt than their peer graduates. White or Caucasian students had the lowest amount of debt.
Other key points highlighted during the session include the following:
The mean educational debt for all U.S. veterinary college graduates for 2020, including those without debt, was $157,146.
Ninety-four percent of graduates secured full-time employment or had accepted a position in advanced education by two weeks before graduation.
Nineteen percent of veterinary students graduated with a debt-to-income ratio of zero, but 20% graduated with a ratio of 4:1. The mean debt-to-income ratio was 2:1.
Women graduated with a higher debt-to-income ratio, on average, than men.
Thirty-nine students, or 1.4% of 2020 graduates, graduated with debt higher than the total cost of their veterinary education.
Students who reported a major life event during their veterinary education had more debt than those who did not. Also, students who had to repeat courses had higher debt. Forty-six percent of all students with debt had a budget.
The majority of the 2020 graduates reported they plan to go into companion animal medicine, while 33.3% said they plan to go into advanced education, including an internship, residency, or PhD program. However, the percentage of graduates who said they plan to pursue internships is declining.
The mean weighted starting salary for students entering full-time employment was $90,722.
The potential impact of the COVID-19 pandemic on starting salaries has yet to be seen. In comparison, the effect of the 2008 financial crisis was not seen until 2010, Dr. Bain said.
Seventy percent of veterinary graduates said there was no change to their offers of employment because of COVID-19. But 3%, or about 90 students, said their offer was revoked or withdrawn.
“Although salaries have increased between 2019 and 2020, we have yet to see the impact of COVID-19 on starting salaries,” Dr. Bain said. “So far, we have been good, but as things continue to unfold, we’ll see what will happen.”