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Web Exclusive: Debt burden skyrockets for generation of DVMs


Veterinary medical students accustomed to living on borrowed money now will forfeit a large percentage of future earnings to pay down their educational loan obligations. Consultant James F. Wilson, DVM, JD explores the long-term implications.

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Veterinary medical students accustomed to living on borrowed money now will forfeit a large percentage of future earnings to pay down their educational loan obligations. It's a check most will write until they near age 60.

While indebtedness is built-in to the veterinarian-in-training, 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 numbers of new veterinarians and have global implications.

In the following interview, consultant James F. Wilson, DVM, JD talks about topics in his paper "Inviting the Elephant into the Room," which explores statistics showing the debt-to-income ratio of new graduates is more unbalanced than ever. The results, which spurred the DVM Newsmagazine March cover story "Economic Emergency," are being circulated among veterinary medicine's leaders as the profession nears what Wilson calls a crisis situation.

DVM Newsmagazine: How do you characterize the status of today's graduates regarding their educational debt compared to starting salaries? How does this problem rank among other issues plaguing the profession?

Wilson: The debt/starting-salary issue is relatively hidden from practice owners (because they are unaware of the exploding costs for a veterinary education in the past five years). Meanwhile, it is nearing a crisis level with new graduates. Unfortunately, my experience is that this crisis is also hidden from many of the students who are accepting admission into veterinary schools and/or during their first few years of their education. Like so many financial issues, considering the reality of this crisis is just too painful for most students to want to consider when they are worried most about passing the next exam, the next course, and the national boards. Thus, many of them just deny or ignore it.

I personally believe that this problem ranks high on the list of issues plaguing the future of veterinary medicine. This is particularly true in view of the number of baby boomers who are looking to retire in the next 10 years, the limited profitability of their practices, and their need to find buyers for their practices. It is also a huge problem for recent graduates who want to purchase a residence, have children, and work fewer hours per week than did their parents of bosses.

DVM Newsmagazine: You talk to students on a regular basis. How concerned are they about this issue? Has the reality of their indebtedness hit them?

Wilson: Most of the students are not particularly concerned until I lead them through a budget program created by Dr. David Lee, associate professor of practice management at the University of Minnesota's veterinary college.

When they see the impact of their debt and the number of years that will be required to pay it off at today's 6.8-percent interest rate versus the 2.5-percent rate of just a few years ago, I witness shock, denial, anger and downright depression in the students attending my courses. For some it is almost like an unexpected death in the family. Pursuing this exercise has brought some students to tears.

DVM Newsmagazine: Is the inequity between salaries and educational indebtedness on the brink of combustion?

Wilson: Veterinarians are notoriously good at cutting back on expenditures for themselves so they can repay their debts on time. So, I don't see combustion occurring in the near future. What I do see is postponing marriages, children, purchasing residences, saving for retirement, buying practices and funding vacations as the key outcomes.

DVM Newsmagazine: In your own opinion, are there any easy solutions? What will it take to turn the tide?

Wilson: There are not easy solutions. This country is so addicted to politicians who want to cut taxes and reduce spending for education that today's students will have to learn how to borrow the money needed for their education and suffer the financial consequences of repaying that via a reduced lifestyle. That was not the case for professionals who graduated prior to about 1990. It certainly was not the case for veterinary graduates prior to 1983 when educational debt levels were less than 95 percent of starting salaries, instead of the 185 percent of starting salaries today. The debt-to-starting-salary ratio was closer to 50 percent back when I graduated in 1967.

What bothers me the most is that I see huge amounts of future income for college graduates going to pay for their education while politicians deny the economic impact this will have on people seeking that education and our nation. Honestly, I believe we will see that other countries that place education above military expenditures rise to the top of the world with their productivity and innovation while the United States pays trillions of dollars for defense spending to try to keep us and all of them safe.

DVM Newsmagazine: What's your hope for the future of veterinary medicine regarding this issue?

WIlson: My hope is that the schools and the licensing boards will adjust their processes so that the veterinary schools can graduate great doctors with less breadth and more depth to their educational specialties. Moreover, my hope is that students and veterinary schools will accept that graduating doctors with a terrific knowledge of veterinary science will not work unless such doctors also have a keen understanding of the role professional communication and business principles play in their education to succeed financially and professionally. Many of the 20 veterinary schools at which I teach are making good progress on this front, but they have a long way to go before business and profits are looked upon with equal importance as science and technology among the faculty, the veterinary student population, and its graduates.

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