Stats Show New Veterinarians are Smothered in DebtFind out what tips experts recommend for handling debt, and also how they are trying to tackle this problem. April 21, 2016 By Keith LoriaFigures released by the American Veterinary Medical Association (AVMA) reveal some alarming statistics about veterinary students and recent graduates. In the 2015 graduating class of about 3,000 students, the mean educational debt load was $174,060, and 223 students owed more than $300,000. Considering that the average salary for those going into practice is about $71,000, that debt will not be repaid easily. Mike Chaddock, DVM, EML, the associate dean for administration at the Michigan State University College of Veterinary Medicine, grasps the debt spiral. “One of the chief problems is that students often come in to veterinary school with a huge undergraduate burden of debt,” he said. “And many lenders are lending as much as students want, so students don’t think about the consequences, feeling they will just deal with it years down the line. “I’ve heard horror stories of what happens once they graduate and realize how much they truly owe.” Dennis M. McCurnin, DVM, MS, Dipl. ACVS, a Louisiana State University professor emeritus who taught surgery and practice management, believes student debt is a plague that has infested the industry. He’s not sure it can be stopped. The legal and dental industries face similar predicaments, he said, as new graduates find well-paying jobs harder to come by. “Eventually word will get out that there’s no return on investment for most people to go to vet school, which will cut applicants and require schools to take some sort of action,” Dr. McCurnin said. “I think it’s really sad that we can’t simply get it together.” Recent Graduates Speak Destini Holloway, DVM, who practices in Spartanburg, S.C., went to undergraduate school at the University of West Georgia and veterinary school at Tuskegee University, graduating in 2011. She never thought about her growing student debt while in school, but now she wishes she had. “I have approximately $253,000 in student loan debt, and $236,000 of that total is from my veterinary studies—93 percent,” Dr. Holloway said. “I started out not doing so well at managing my student loan debt. Not until this past year have I really focused on it and dedicated large lump sums in efforts to decrease it.” Her initial problem is one that many experience: a mental block from seeing the mounting debt and thinking, “I’ll never be able to pay that off.” “After veterinary school ended and I was out in the real world practicing as a veterinarian for the first time, I began to have real-life expenses to deal with, so I kept deferring my loans until I was ready to pay them off,” she said. “This cycle lasted for nearly two years before I realized that what I was doing was making a seemingly impossible task worse.” Holloway spoke to a few colleagues about their loans and realized that most were doing the same thing, and none were given much help. “No one could prepare us for this, and it was devastating once we graduated to see how previous graduating classes’ debt loads compared to ours,” Holloway said. “The even more upsetting part is that we were starting out making the same, if not less, income than our previous colleagues. “It just seemed unfair, and there was nothing to really justify why the student loans were continuing to rise while our salary amounts were stagnant. Our debt-to-income ratio was astronomical and shocked a lot of people.” Looking back, Holloway wishes things were different. She believes that having a good financial adviser is key to tackling some of these obstacles and preparing prospective veterinarians for their financial future. “The best thing to do for student loan debt is to not defer it unless you absolutely have to,” he said. “Even paying the accrued interest of the loans every month is better than making no payments at all. The interest will capitalize fairly quickly, and you could be gaining anywhere between $5,000 and $10,000 a year in interest alone.” Ohio State University graduate Jennifer Quammen, DVM, works in private practice in Northern Kentucky. Her student debt is in line with the average for recent graduates. All of hers is associated with veterinary education. “I did not realize it would be as significant of an issue as it is,” Dr. Quammen said. “I think it really hit home for me about nine to 12 months post-graduation. “Managing debt is challenging,” she added. “I have worked full time and taken extra hours as a method to pay down my debt. My tip is to look at getting the highest interest loans paid off first.” Helping Hand Options exist for veterinarians who have a lot of student debt and are willing to do something a little different. For instance, MSU’s Chad-dock said the military offers excellent veterinary careers and will pay for almost the entire education. The U.S. Department of Agriculture identifies regions that are short on veterinarians and offers grants to veterinarians willing to practice large animal medicine in approved counties. USDA helps repay student loans—up to $75,000 over three years. Holloway considered the latter but thought it impractical to move her family to an area that she wouldn’t otherwise be interested in. “I am a city girl, and unless [rural] is the lifestyle for you, it just isn’t a good option,” she said. “I am currently on the income-based repayment plan, and although it still takes out quite a bit, it seems like the best plan for me moving forward to try and feasibly manage my debt.” Other options to reduce student debt include working for nonprofit organizations, at universities and doing research. The problem, Chaddock said, is that even if the debt is forgiven, it might be considered a gift and taxed as such. “Teaching in a vet school is another viable option,” said LSU’s McCurnin. “It could qualify as pay-as-you-earn through public service, and they will forgive your debt at the end of 10 years of service. Plus, there’s no tax on the amount forgiven.” Penn Vet Tuition at the University of Pennsylvania School of Veterinary Medicine is $49,456 in the 2015-16 academic year. Financial Responsibility The first thing any current or prospective veterinary student should do, in Chaddock’s opinion, is exhaust all scholarship possibilities. “Look at every one of them, even the small ones,” he said. “They all add up. I also would become as astute as I could in finances.” Many veterinarian colleges now mandate classes on budgets and personal finance to help students prepare for money challenges. “Are these classes popular? No, but they are important,” Chaddock said. “Many students aren’t thinking at all about debt, but it hits them in the face the day they graduate.” Students need to re-examine their goals at graduation and consider practice ownership, McCurnin said. “A lot of recent grads don’t have interest in that, but as an owner they can make two to four times as much money,” he said. “Another area they can consider is going into research, as there’s still a big demand for researchers. “You will need a Ph.D., which means more school and more debt, but you can work part time as an instructor and then make $150,000 to $250,000 a year out of school.” No-Cost Advice The Institute for College Access and Success and its Project on Student Debt are working to reduce the risks and burdens of student debt. The institute offers these tips to all students. Know your loans: Not only should you understand how much you owe and when the money is due, but you should keep track of the lender, balance and repayment status. Keep in touch with lenders: Recent graduates most likely will change their address and possibly their telephone number. Make sure that all your information is current with the lender and be sure to open all correspondence from the lender in case of updates. Don’t panic: Not everyone is able to repay loans on time. If you’re having trouble due to unemployment, health problems or other unexpected challenges, there could be options such as deferments and forbearance. Peter Mazareus, founder of Invite Education, a college planning site, noted that combining loans is a savvy move. “Federal and private loans cannot be consolidated under one loan, but multiple federal loans can be consolidated into one loan, and multiple private loans can be consolidated as well” he said. Looking Ahead A national symposium, called Fix the Debt, will be held April 20 to 22 at Michigan State University. Unlike a traditional conference, there won’t be any lectures. Instead, attendees will be broken into groups—academic community, employer community, recent students and graduates—and work on debt issues. “The purpose of the summit is to identify what is working and can be replicated, and to come up with some new ideas,” said Dennis M. McCurnin, DVM, MS, Dipl. ACVS. “Our entire focus is to bring whatever resources we can to attack this issue." Find out more about the symposium here. Originally published in the April 2016 issue of Veterinary Practice News. Did you enjoy this article? Then subscribe today!