Exploring cost of education, generational differences
EDITOR'S NOTE: The current economy is touching many sectors of veterinary medicine, including the job market, academia and specialty medicine. The most recent DVM Newsmakers' Summit brought together a diverse panel of thought leaders to talk about the issues facing new graduates, academia and general and specialty practices. The discussion took place at CVC Baltimore in late April.
Verdon: Let's set up the issues facing new veterinary graduates. What's the reality for a new graduate entering private veterinary practice today?
Wilson: This subject is what I call the good, bad and ugly. Annual debt, tuition and fees for veterinary students have been troubling me since the 1990s, when I started teaching at veterinary institutions. So many of the public are oblivious to the immense cost of veterinary education relative to the salaries of veterinarians, even after several years.
Clearly a lot of our students enter veterinary school with a complete disconnect as to the cost of education and their salary and earning power once they graduate.
Debt level is skyrocketing. Fortunately, AVMA has been tracking this data. Here is what we know: Debt was 95 percent of starting salary in 1983. By 2008, it was 194 percent. Why is that going on? It's all buried in the cost of education and the absence of the same level of funding. Governmental funding for advanced education has been deteriorating while the volume of information veterinary students have to learn for an advanced degree has been getting broader and broader.
Debt levels were up to 173 percent. When Jim Taylor developed this one year ago. We were using trend levels up to 2007. In 2007, we were estimating that, by the year 2017, debt would be double a starting salary. Then last year we included a couple more schools with high debt levels, and it shot up to 194 percent.
For students, the average debt is $120,000. If it's payable over 10 years at a fixed rate of 6.8 percent, that's $1,377 a month. They can't afford it. Now they are looking to extend the loan payments to 25 years, which equals $830 a month.
If you move the payment period to 25 years, it increases the interest from $49,000 to $125,000. There are very few options for today's students.