Debt outpaces salaries

SCHAUMBURG, ILL. — Educational indebtedness for 2007 veterinary medical graduates increased nearly 100 percent since 1997, while starting salaries rose 46.5 percent during the same 10-year period.

Fast Facts

That ratio, considered bleak by some, stems from analysis rooted in American Veterinary Medical Association (AVMA) graduate surveys, published annually in the Journal of the American Veterinary Medical Association.

Information for the 2007 report, issued in December, was collected from 1,892 respondents representing 75.5 percent of 2007 graduates of U.S. veterinary schools and colleges.

The survey shows that, although more graduates than ever accepted positions in advanced-study programs (36.8 percent) — an area of work known for low pay and blamed for driving down overall earnings — the most popular jobs continue be in private practice (59.4 percent), specifically in small-animal-exclusive sectors (32.1 percent).

Yet even without counting advanced-study programs, mean starting salaries reached just $54,984 in 2007, up 5.4 percent from 2006, while mean educational indebtedness increased 6.1 percent between 2006 and 2007 to total $106,959 last year.

Long-term, that's not a sustainable trend, says Richard Vedder, PhD, senior economist at the U.S. Joint Economic Committee and Ohio University professor. He warns that if the cost-earnings ratio continues to snowball, students simply won't be able to afford a career in veterinary medicine.

"A generation ago, students would have balked at the cost of earning a veterinary medical degree compared to projected earnings," says Vedder, who sat on the U.S. Secretary of Education's Commission on the Future of Higher Education in 2006.

"Nowadays, indebtedness is forcing new graduates to live a lower-middle-class lifestyle when veterinarians have traditionally enjoyed an upper-middle-class living."

First-hand account

Like many of her colleagues, Dr. Andrea Honigmann lives paycheck to paycheck. Graduating from Iowa State University (ISU) in 2006 nearly $300,000 in debt, she describes monthly loan payments totaling roughly $1,670 as "crippling," especially considering she's scheduled to make the payments until age 57.

"I can't buy a home, and owning a practice isn't in the cards for me since it will be a long time before I ever have any collateral," says Honigmann, who considers her earnings as a small-animal practice associate in Smoketown, Pa., above average.

"I knew I would be saddled with loans, but I don't think I realized how this would affect me once I got married. My debt will restrict how many children I can have."

While Honigmann's loan obligations, mostly accrued while attending ISU as an out-of-state student, represents the high end of the AVMA survey's indebtedness spectrum, she's not alone. According to association research, 89.6 percent of respondents had debt at the time of their graduation from veterinary medical school.

Numbers game

The 2007 report shows most respondents owed $80,000 to $120,000, yet roughly 3.5 percent of graduates incurred more than $200,000 in educational loans. Five years ago, mean educational indebtedness totaled $72,719 (47.1 percent less than in 2007, compounded at 8 percent annually). In 1997, mean indebtedness totaled $53,648 (99.4 percent less than in 2007, compounded 7.1 percent annually).

"It is alarming that debt continues to grow at such a high rate from year to year relative to income," says Alison Shepherd, senior manager of market research for AVMA.

Dr. Michael Chaddock, spokesman for the Association of American Veterinary Medical Colleges (AAVMC) agrees: "It's discouraging. We want to be sure we're competing with the other health professions to get the brightest students. Our applicant pool has been flat."

But Dr. Ralph Richardson, dean of Kansas State University's veterinary medical program, insists costs of living are somewhat to blame for the higher indebtedness rate. He explains that many students live beyond their means, recalling how he left veterinary school debt-free.

"My wife and I lived in a one-room apartment and slept on a roll-out bed. You don't see many students living that way anymore," he says.

Men vs. women

According to AVMA research, male graduates out-earned female graduates in 2007 by 4 percent, or $1,812 annually. In 2002, the difference was $1,177, or 2.9 percent, compared to $2,591, or 8.4 percent, in 1997 (Table 1).

Table 1

The same goes for fringe benefits (see Table 2), despite the fact that roughly 80 percent of all veterinary medical graduates are women, Shepherd says.

Table 2

"We don't know why there is a difference in salaries and fringe benefits. However, this has been the trend."