December 01, 2021
Increase in veterinarians’ starting salaries long overdue, economist says
The debt-to-income ratio for 2021 U.S. veterinary graduates securing full-time employment is 1.67:1, a drop from 2.09:1 last year and the lowest since 2008.
Compared with last year, more graduates had a DIR between 0.01:1 and 1.99:1—which is considered a safe ratio—and there was a jump from $90,722 to $99,593 in the mean weighted starting salary, in 2020 dollars, for veterinary graduates entering full-time employment. Both factors helped contribute to the overall decrease in the DIR, said Bridgette Bain, PhD, associate director of analytics at the AVMA.
Drawing on data from the 2021 AVMA Senior Survey, Dr. Bain spoke on “Supply and Demand in the Market for Veterinary Education” at the annual AVMA Veterinary Business and Economic Forum, held virtually Oct. 14-16.
The DIR hit its peak at 2.26:1 in 2018. This year, the mean debt of all 2021 graduates from U.S. veterinary colleges, including those without debt, was $147,394 in 2020 dollars. And 18% of veterinary graduates had no debt—down from 19% in 2020.
Meanwhile, Dr. Bain said, the mean starting salary is the closest it has come to reaching the trend line from before the Great Recession of late 2007 to mid-2009. From 2010-14, there was a decrease in starting salaries, after adjusting for inflation. In 2020 dollars, starting salaries were around $65,000 in 2001 and grew to around $80,000 in 2010.
“This is a market correction 12 years overdue. We haven’t returned to pre-recessionary trends, but we’re close,” Dr. Bain said, adding that inflation-adjusted debt grows at 3.5% each year, while inflation-adjusted salaries grow at 1.9% each year.
Dr. Bain encouraged employers to consider personalizing compensation to attract new graduates, whether through relocation bonuses, more time off, or larger signing bonuses. She also recommended communication across institutions, including veterinary colleges, to identify successful strategies for debt management.
Looking at data for 15,815 new graduates from 2017-21, 49% joined companion animal practices, while a third went into internships, residencies, or another type of advanced education. Dr. Bain drew attention to the correlation between the strength of the economy and the area that recent graduates choose by comparing 2013—not long after the Great Recession—with 2021.
Eight years ago, 37% of graduates were going into companion animal practice, while 38% were going into advanced education. At that time, only 80% of graduates had reported receiving an offer for full-time employment or advanced education. Meanwhile, this year, 53% of graduates went into companion animal practice and 25% into advanced education; 96% of graduates had received at least one offer for full-time employment or advanced education.
Dr. Bain noted that new graduates with higher debt seem to seek out jobs with higher incomes. At the same time, practices owned by corporations or consolidators, on average, pay new hires more than independent private practices, as well as give larger signing bonuses and relocation allowances.
Between 2020 and 2021, the percentage of new graduates hired by corporate practices increased from 35% to 39%, among 2021 veterinary graduates securing full-time employment in clinical practice, while the percentage of those going into independent private practices correspondingly decreased from 65% to 61%.
In 2021, the mean starting salary was $106,053 for new graduates going into corporate practice and $93,894 for those going into independent private practice. The mean educational debt for those going into corporate practice was $165,569, compared with $152,941 for those going into independent private practice.
In addition, 66% of the corporate offers included a signing bonus that averaged $11,738, while only 31% of new graduates going into independent private practice were offered a signing bonus, which averaged $6,596. Plus, 41% of corporate practices offered a moving allowance that averaged $4,879; 18% of independent private practices did so, and the mean offer was $3,207.
Over the past two decades, educational debt held by veterinary graduates increased by a mean of 5.5% annually, but there is wide variation in the mean annual increase among veterinary colleges.
The lowest growth in debt from 2001-21 was an annual mean of 0.4% at the University of California-Davis. Total tuition for 2021 veterinary graduates from UC-Davis was $132,100 for in-state students and $181,080 for out-of-state students. Tuskegee University had the highest growth in debt from 2001-21, with an annual mean of 9.7%. Total tuition for 2021 veterinary graduates from Tuskegee was $187,129 for in-state and out-of-state students.
Differences in debt accrued and how that debt is paid also varied by race and ethnicity. Recent graduates who are Black accrued the highest debt, at a mean of $249,000 in 2020 and $229,000 in 2021. They were followed by Hispanic or Latino recent graduates, at $196,000 in 2020 and $185,000 in 2021. Recent graduates who are white averaged $151,000 in debt in 2020 and $153,000 in 2021. Asian graduates averaged the same amount of debt in 2020 as white graduates, but that figure decreased to $132,000 in 2021.
At the same time, Black graduates in 2021 reported getting a mean of 11% of financial support for tuition, fees, and living expenses coming from family, versus 40% for Asian graduates, 26% for white graduates, and 24% for Hispanic or Latino graduates. Black graduates covered 68% of their tuition, fees, and living expenses with educational loans, compared with 62% of Hispanic or Latino graduates, 57% of white graduates, and 46% of Asian graduates.
Overall, 18% of veterinary graduates this year had 76%-100% of their tuition, fees, and living expenses covered by family, which Dr. Bain said correlates with those who had zero debt, while 43% had no support from family. Many of those individuals likely were part of the 48% who reported covering 76%-100% of their costs with educational loans. Notably, 58% of new graduates said they did not use personal savings to cover any costs, and 43% of new graduates said scholarships did not cover any costs.
Finally, Dr. Bain pointed out a correlation between the number of animals that veterinary students own and their educational debt. For each additional animal that a veterinary student owns, debt increases by $7,500.