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Exploring cost of education, generational differences

DVM360 MAGAZINE


If you go to 2015, mean debt — which I think we will be at $176,000 — the cost is $2,000 a month for 10 years. Keep in mind that 10 percent or no more than 15 percent of one's income should be used to pay off student loans. Assuming that we had 10 percent of our new grad's income devoted to paying their debt, they should have an annual salary of $243,000 by 2015. If we increased the debt ratio to 15 percent of salary, it would equal $162,000. We know that is not feasible.

Extending the loans to 25 years, the payment drops to $1,221 a month. But now they are paying $190,000 in interest.

I hear vets ask, "Why don't you just save money while you are in veterinary school? You don't have to drive those new cars." Trust me, many of my students are living on peanut butter, jam and pasta. There aren't a lot of good options out there. According to financial aid, if we keep repayment to 15 percent of gross monthly income and increase the loan repayment time to 25 years, by the year 2015 they could get by with a starting salary of $97,000. I don't know if we can achieve that in a recessionary economy.

So, here is what they are facing: They face forestalling having children, buying a new home, saving for retirement and even buying a new car.

New veterinarians are looking at a very different time than when I did when I graduated. My debt then was about 50 percent of my starting salary, and now it is almost to 100 percent.

I ask students if they are ready and excited about your future. The answer is blank. ... They sit there stunned.

Mashima: I would say that is an accurate depiction of the current landscape. And if that doesn't depress you, I don't know what would. We are facing an exceptional set of circumstances today. Exceptional. The portrayal that Dr. Wilson put together was prior to the economic challenges of today.

So what are we going to do? Just like the financial experts in the United States, the answer is that we just don't know. It's going to take everybody working together.

It's the students; it's the schools; it's the profession; it's societal obligations, including federal government inclusions, if we are going to come out of this.

Let me paint, just for a little bit, the other set of issues emerging. Let's focus on cutting costs.

Students have to be accountable. They need to know what the ramifications are for a pizza, a car purchase or an extra loan. With information comes a little power. We also need to think about ways to access private funding to help defray the cost of education. Right now, veterinary students compete against one another for a limited pool of money. I would say we need to go after money that is available to other health professions.

Kelly: There is no doubt that what Dr. Wilson presented was exactly accurate. That's what is happening in terms of loans. I have to tell you there are some things that are equally disturbing to me. Some 2,600 grads just entered the work force. From 2000 to 2007, there were about 5,000 job ads in the first quarter of each year. The number dropped by 59 percent this year, and that is a huge decline in the number of positions available. That has to be an enormous concern for us in veterinary education and the whole of veterinary medicine. We face the possibility of graduates not being able to find a job. And they have $120,000 to $160,000 worth of debt. That is a huge concern. I hope I'm wrong, but we won't know until July or August.

My feeling is that we have some responsibility to those trying to enter our profession. And we need to find ways to tide them over a difficult period until the economy recovers.

I think it is also of concern to think about where the changes in jobs and the economic downturn are having an effect.


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Source: DVM360 MAGAZINE,
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