Economic emergency

Economic emergency

Crisis looms as debt-to-salary statistics paint bleak outlok for veterinary medicine's future, expert says
Mar 01, 2008

The debt trap: "The good news is they're going to be a veterinarian," says Economist Richard Vedder. "The bad news is they'll be miserable."
TBENSALEM, PA. — Dr. John Rossi questions his decision to become a veterinarian.

The 2005 Penn graduate practices at a suburban small-animal hospital outside of Philadelphia. At 29, he owes more than $150,000 for veterinary school, and, combined with $50,000 in undergraduate debt, maxed out on federal loans during his fourth year. Even some private lenders won't let him borrow anymore. Now unsatisfied with his career, he's finishing a master's degree in bioethics and plans to start a PhD program this fall. His current monthly loan payment: $800. In the end, Rossi will rack up close to $300,000 in loans. His wife, a resident, owes nearly as much.

Rossi represents a generation of veterinarians accustomed to living on borrowed money and forfeiting a larger percentage of future earnings to pay down educational loan obligations. It's a check most will write until they near age 60.

While indebtedness appears intrinsic to the veterinarian-in-training, the reality is it's becoming unmanageable, borrowers say. Average educational debt is rising faster than the consumer price index, and experts warn that if left unrestrained, the pattern will erode new veterinarian numbers and have global implications.

Being shackled with monthly loan statements the size of mortgage payments is tough, Rossi says, but when starting salaries are less than $55,000 a year, it's a slap in the face.

"I once saw a study that suggested well over 50 percent of doctors and lawyers would not recommend their profession to a student," he says. "I think the number's even higher for new veterinarians. We want to make more money and have a better schedule rather than see 40 cases a day and script out steroid after steroid because owners don't want to do anything else to treat patients."

Backed in a corner: $200,000 in educational loans makes Dr. John Rossi typical of other recent graduates. "Knowing it on paper and being confronted with it are two different things," he says.
Statistics paint an even darker picture. A review of American Veterinary Medical Association (AVMA) data reveals educational debt represented 184 percent of entry-level salaries for new graduates in 2007, compared to 91.6 percent in 1980. The association's most recent survey shows last year's mean educational indebtedness totaled $106,969, although students saddled with $250,000 or more in loans exist. Tuition increased nearly 100 percent since 1997, yet starting salaries rose just 46.5 percent during the same 10-year period. Interest rates now top at 6.8 percent, and the vast majority of 2007 graduates reported to AVMA that they accepted positions paying between $47,000 and $58,999 a year.

Upheaval is inevitable, contends Richard Vedder, PhD, former senior economist with the U.S. Joint Economic Committee and Ohio University distinguished professor. The debt burden students face compared to salaries is "shocking." If the cost-earnings ratio fails to soon balance, students simply won't be able to afford a career in veterinary medicine, he claims.

"This trend will be unsustainable in far less than a generation," predicts Vedder, who sat on the U.S. Secretary of Education's Commission on the Future of Higher Education in 2006. "At some point, no one will want to go to veterinary school. The word will be out that you're assigning yourself to a life of utter poverty. I can only predict that disaster is a few years ahead."