Once upon a time, a first-year veterinary student penned a column regarding the cost of vet school. He wrote of his natural-born love of animals and the veterinary profession, of his elation upon acceptance to vet school, and of the sizeable tuition bill. Justin Sahs figured his costs would top $300,000, not including the interest that would accumulate during his school years. He’d saved some money for vet school, but planned to borrow money as well.
Student loans: it’s no secret that the amounts of money borrowed for education are skyrocketing. You know the numbers: the American Veterinary Medical Association (AVMA) reports that among graduates who borrowed money, the average loan debt tops $166,000. Over 20 percent of students graduate with loan balances over $200,000. Forbes reports that in 2019, 44.7 million borrowers owe over $1.56 trillion on student loans. That figure rates as the second-largest debt category behind mortgage loans, ahead of credit card debt and auto loans.
Student loans are easy to come by, and for many, borrowing is a necessity. Veterinary education is a high-cost degree. The Association of American Veterinary Medical Colleges (AAVMC) analyzes numbers from colleges across the US. In 2017, the median first-year-resident tuition was $23,664, and non-resident tuition was $50,123. Figure in living expenses, books, fees, and other costs, and it’s easy to see how many veterinary students rack up significant debt.
Large loan balances mean large loan payments, which can quickly consume a veterinarian’s starting salary. In a 2011 article for DVM360, Daniel R. Verdon writes that many new veterinarians face debt-to-income ratios nearing two to one.
Degrees Aren’t Free
The cost of higher education rises every year, with many contemplating the motivations and intentions of the system as a whole. Borrowing is easy, with few, if any barriers.
“In general, while there are some exceptions, schools often do not have the resources to provide the much-needed counseling for students in veterinary medicine,” says Paul Garrard, CEO and founder of PGPresents, LLC, a firm that provides independent student loan counseling. “In addition (while not trying to make an adverse comment on how financial aid offices are designed) it is the norm for students in veterinary medicine to have all their financial aid handled by a main campus aid office, with little, if any, specific expertise in that office on the veterinary profession. It is extremely rare that a college or school of veterinary medicine has its own financial aid officer.”
Financial aid experts devoted solely to veterinary schools are indeed rare. Kayla Andrews is a financial education specialist at the College of Veterinary Medicine and Biomedical Sciences at Colorado State University. Andrews works with incoming students, current students, and recent alumni.
“The AVMA mandates that DVM students be provided the opportunity to learn about personal finance in the core curriculum. This is most often accomplished through courses, workshops, and other group activities,” says Andrews. “Financial education at CSU is unique in that a dedicated DVM student financial advisor is on site to guide students in applying principles learned to their unique financial status, goals, and needs.”
Andrews continues: “We know that financial education is most effective when it is appropriately timed, individualized, and paired with opportunities for application. One-on-one advising provides this.”
CSU’s program provides students with extensive opportunities for financial education. Andrews says she meets with students to assess their financial picture as soon as they are offered a seat in the program — many students work with Andrews to assess their financial picture before accepting their seat. In the summer before their first year, Andrews helps students establish a budget. They discuss options for loans and scholarships.
Andrews provides financial education in all four years of veterinary school, from mandatory classes dealing with budgeting, credit management, goal setting, loan forgiveness options, and loan repayment options to in-depth classes focusing on behavioral finance. In their third year, students are assigned a five-year post-graduation financial plan.
Students can meet with Andrews on an individual basis to discuss their particular financial situations. She reviews contracts and salary offers and is available to help students in the first year after graduation.
“We are still determining how best to measure the impact of this program,” Andrews says. “Debt is complex and influenced by an array of factors. Ideally, we would like to see a decrease in the debt-to-income ratio, but we also hope to measure an increase in functional behaviors such as strategic loan management, reduced credit card indebtedness, creation of an emergency fund, and risk management.”
Andrews says positions like hers help students begin their careers on the right foot financially, with not only a loan repayment plan, but with knowledge of savings, investing, retirement planning, budgeting, insurance, and taxes.
“Students report that the information they received improved [their] knowledge and confidence, better preparing them to effectively manage their finances after graduation,” Andrews explains. “Most importantly, we learned that a subset of students who interfaced with a financial education specialist demonstrated positive changes in financial behaviors.”
You Got It, Now Pay for It
Garrard says it is possible to lessen the angst of dealing with student loan debt by employing a sound (and flexible) repayment strategy. Garrard promotes a three-step approach for paying off student loan debt.
“First, [you need to] know what you borrowed (what kind of loans, their terms and conditions, repayment options, who services the loans, and when they come due),” Garrard explains. “There is no point trying to determine a repayment strategy if you cannot answer these questions.”
The second step, Garrard says, is to identify personal repayment objectives: whether aggressive or cautious, or qualifying for loan forgiveness. He also reminds borrowers that objectives can change based on income, family status, and employment.
Finally, identify the best repayment plan option. While many plans exist, all fall in one of two categories: time-driven repayment or income-driven repayment.
“Time-driven plans are simple [in design], but often challenging with regard to affording the monthly payments, if you owe more than your salary and have no other resources to help such as a spouse’s income,” Garrard says. “The loan servicer takes your balance and amortizes it over 10 or 25 years. At the end of the term, you are debt-free if you make minimum payments only.”
While time-driven repayment plans have no relationship with a borrower’s income, family size, marital status, or tax filing status, income-driven repayment plans help borrowers who cannot afford a standard time-driven repayment plan and who also have a substantial gap between their loan balance and their income.
“The upside to income plans is that the required payment should be affordable. The potential downside is that if the gap is huge, the payments may not cover the interest due, causing the debt to grow all the while someone is actually making payments,” Garrard explains. “Borrowers with remaining debt at the end of the term of their income plan will find that debt forgiven, but such debt is considered taxable income.”
Garrard continues, “The trick is to simply find a repayment plan where the required minimum payment is affordable and comfortably within someone’s monthly budget. Then, you can decide if and when to overpay and if so, by how much, always posting the additional payment against the most expensive loan.”
Kathryn Primm, DVM and owner of Applebrook Animal Hospital in Tennessee, tackled her student loan debt with careful budgeting and lifestyle choices.
“My mindset is that I do not like to owe money. I pay for what I get, and debt bothers me,” Primm says. “I lived below my means at every possible opportunity and postponed major life events until I was in a better financial place. I did not have a child until I was 32. My husband and I saved and planned and deliberately waited. It has made life less stressful for us.”
In addition to her comments for this article, Primm authored a DVM360 piece titled “Five Steps to Get You Out From Under Vet School Debt.” In it, she shares practical advice: curb other types of borrowing, set and stick to a budget, and reframe your expectations. Just because you’re no longer a student eating ramen doesn’t mean you should give up the ramen-sized budget.
Primm adds that a careful pros-and-cons analysis of your situation proves helpful. She writes, “Be aware that in certain parts of the country, the veterinary market is more competitive, which drives down salaries. If you relocate to an underserved area, that position may pay you better — and come with a lower cost of living. These positions tend to be in rural settings, and even if you don’t see your future in a rural practice, you’ll gain valuable hands-on experience with a varied caseload and clientele.”
While Primm encourages careful budgeting, she also recommends an 80/20 rule: put 80 percent of a financial windfall toward debt and use 20 percent on a purchase or experience that enhances your quality of life.
Debt from Student Loans: The Future
One consistency in the conversation about debt and income: people with a passion for the practice of veterinary medicine are rarely deterred from pursuing the career.
“For many veterinarians, there is no other road for them and they would not be happy in another profession,” says Primm. “I think vet schools may need to do a better job at explaining the reality of debt and pay. However, right now, so many hospitals are looking for associates; young vets have more options than before.”
Andrews recognizes the debt issue but remains hopeful for new generations of veterinarians.
“Having this high level of debt does not need to put veterinarians into a situation where they can’t live their best lives,” Andrews says. “The debt is there for most and they do need to deal with it, but if we deal with it early and then immediately after graduation, individuals are much more likely to achieve their financial and career goals.”
Primm foresees changes on the horizon.
“In 10 years or maybe less, I see a change in the face of the industry. I think that small, one-doctor practices will be only in the more rural places,” Primm says. “I think that corporate practice will grow. Change is scary, but things usually work out. I love my job and I truly cannot imagine me doing anything else.”
No matter how the profession may change, acquiring a veterinary degree will come at a cost.
“We owe it to our students, who invest tremendously in the education we provide, to adequately educate and advise them on this important topic so they have the best opportunity to thrive, personally and professionally,” says Andrews. “If veterinarians can better manage their finances, even with larger student loan debt, they can focus more on the work they do, as well as reaching their financial and career goals.”
-Jill MH Taber