Too Many Indebted Veterinary Grads Chase Too Few Jobs
In the year 2023, veterinary medicine will appear very different from the way it is now. I have felt for some time that we are training too many veterinarians for the number of available job openings.
This was confirmed by the AVMA Workforce Study released April 22. This study reported 12.5 percent excess capacity in the profession, which could continue through 2025.
I have read for the past 25 years that we need to have veterinarians go into non-traditional fields. We now have veterinarians in many new and expanding areas--public health, epidemiology, shelter medicine, food safety, etc.--but still have the issue of low salaries as many of these new areas offer lower pay.
Student debt continues to increase at a higher rate than starting salaries.
We often compare veterinary medicine to human medicine to evaluate how we are doing. However, the two professions are vastly different once we get away from four years of training.
Today there is a shortage of physicians, and the Association of American Medical Colleges projects this shortage to reach 90,000 by 2020.
On the other hand, the number of veterinarians is adequate with a slowing demand for companion animal practitioners, according to the National Research Council (JAVMA, 241, July 15, 2012). There is still demand for industry and research veterinarians, positions that usually require advanced training and board certifications. Some demand also exists in lower paying jobs found in epidemiology, shelter medicine, food safety and public health.
Another contrast is the debt-to-salary ratio. Veterinarians have an average debt of $151,000, compared to $170,000 for physicians (Pauline Chin, New York Times, Dec. 13). However, the average starting salary for veterinarians is reported as $65,404 in 2012 (excluding advanced education), down 3 percent from 2010 (JAVMA, 241, Oct. 1, 2012).
The average starting salary for physicians (first year post residency in internal medicine) was $170,000 (AAMC). Internal medicine is one of the lowest-paying specialty areas. The debt-to-starting salary ratio is 2.3 for DVMs and 1.0 for MDs.
As the debt load increases for DVMs while the starting salaries and demands soften, why are we now reading about five new schools of veterinary medicine opening over the next five years? Two schools are planned in Arizona, with additional schools in Tennessee, New York and Montana (JAVMA, 241, Nov. 1 2012)
This is the definition of insanity.
We need to take a lesson from the dental profession in the late 1980s when three well-known schools closed: Georgetown University, Emory University and Oral Roberts University. In addition, many of the 57 other dental schools in the U.S. cut back the size of classes. Even then, they were faced with high tuition and debt.
The entry level salaries of graduating healthcare students vs. their debt loads were reported as recently as September as:
• Veterinarians, $66, 469/$142,613;
• Physicians, $137,736/$149,103;
• Dentists, $105,797/$180,557; and
• Pharmacists, $81,844/$123,063.
This report featured 2011 data and the debt for veterinarians has continued to increase while starting salaries have declined slightly over the past two years.
How can schools and colleges of veterinary medicine continue to believe we have unmet job needs when salaries are in decline and educational costs are increasing by 4 to 8 percent per year?
I talk with students daily who are in debt $150,00 to $250,000--some are over $400,000--and I find it very difficult to understand how they will ever become debt free.
The only solution I see is practice ownership. But the practice must be profitable to be able to pay off both the practice loan and the owner’s educational loan. In the end, the owner will become debt free in 20 to 25 years and have the equity of the practice and real estate.
This will be true only if the recent graduate purchases a profitable practice, and about two-thirds of practices are not profitable--below 13 percent net as estimated by NCVEI in 2010.
Most veterinary students are not thinking about practice ownership very soon as they are concerned about paying down their educational debt first. But if they wait too long to buy a practice so they can pay down their educational debt, they may have to work into their 60s or 70s to pay off the practice loan.
This is a serious problem for most recent graduates and it is getting worse by the year. Every year that goes by, more veterinarians are subjected to this financial crisis.
The federal government has tried to help the debt payment by offering the income-based repayment plan. This plan is difficult to figure out as it assumes the debtor will continue to make a low income and then, after 20 years, the government will forgive the loan balance, which will then be subject to ordinary income tax.
In a Feb. 23 article, David Segal of The New York Times described a "worst case scenario” of a veterinarian graduating from Ross University with a debt of $312,000; average debt reported by AVMA was $151,672 in 2012.
The mean starting salary for companion animal exclusive in 2012 was $68,116, down from $71,462 reported in 2010 (JAVMA 241, Oct 1, 2012). In the reported example, the veterinarian chose income-based repayment, which will lower the monthly payment but the interest continues, so that after 25 years she would owe $650,000, which would be forgiven.
However, she would still owe about $200,000 in income tax as the forgiven loan would be treated as ordinary income by the IRS.
This is a very difficult picture for someone who just wants to be a veterinarian.
We may be our own worst enemy, as we continue to graduate more students from our existing 28 schools while contemplating adding five more.
The legal profession is at a point today where veterinary medicine will be in five to 10 more years.
According to "Market Outlook for Legal Profession Jobs in 2012”, 51 percent of 2010 graduates are employed. If you narrow the field to full-time and permanent positions, this number drops to 45 percent (National Association of Law Placement).
The Lawcrossing website goes on to say, "Over the past two decades, law school tuition has increased at an alarming rate, far exceeding inflation and leaving students in loan debt at somewhere between $70,000 and $100,000, depending on whether they go to public or private law school. And now over 40 percent of graduates are receiving lower and lower starting salaries. Firms that used to offer $160,000-plus a year to start are now offering $65,000 a year.”
Does this sound familiar?
In a Nov. 12 article in the Los Angeles Times, reporter Stuart Pfeifer told the story of a 71-year-old dentist who was still paying on his student loans incurred in the 1980s.
Student-loan debt in the U.S. has surpassed $1 trillion. About 2.2 million Americans over age 60 collectively owe more than $43 billion in student loans. Student loans now surpass automobile and credit card debt.
Student educational debt is a serious issue for all professions. But the dental profession took action in the 1980s while the legal and veterinary professions have sat on the sidelines.
Our profession has been wonderful to most of us and we are lucky to have found this calling.
However, if we are to leave a meaningful legacy, we must stabilize the debt burden and the number of graduates before it is too late.
We should be thinking about how we can reduce the number of years in vet school or pre-vet, as human medicine is considering. In the training of MDs, the goal is to get them through the program faster, such as in three years of medical school, not to cut costs.
We should evaluate how we might reduce the number of graduates before we arrive where the legal profession is today.
To solve these issues, we must have open communication between educational institutions, practicing veterinarians and organized veterinary medicine. If we continue along this same path, we will bankrupt the profession as we know it today.
How can a scientifically trained profession keep ignoring the facts of too many graduates chasing too few jobs with an ever-increasing debt burden?
Maybe we should think about the ethics of encouraging young people to join a profession in which only a few will ever have financial freedom.
Dr. McCurning is a professor of veterinary surgery and management at the School of Veterinary Medicine at Louisiana State University in Baton Rouge. <