Summit to tackle student debt and related financial issues

Fix the debt...Our Future, Our ResponsibilityFinding viable solutions to financial issues related to student debt and the cost of veterinary medical education is among the highest priorities for our profession. That’s why we’re excited to be co-sponsoring the Fix the Debt Summit, which opens Wednesday at Michigan State University.

The summit, sponsored jointly by the AVMA, Association of American Veterinary Medical Colleges and Michigan State University College of Veterinary Medicine, will bring together some 150 individuals to tackle student debt and other financial issues that impact young veterinary professionals. Summit participants will include veterinary students and recent graduates, and representatives from veterinary medical colleges, veterinary employers, governmental agencies and veterinary associations.

Our collective goal over the three-day summit is to agree on specific strategies to address the many facets of this complex challenge.

We’ll follow up with more information after the summit’s close.

16 thoughts on “Summit to tackle student debt and related financial issues

  1. I graduated 16 years ago from University of Pennsylvania with over $100,000 of debt. I managed to pay back this loan and become totally debt free within 15 years. I know that student tuition costs have increased, and some areas of veterinary medicine still have lower salaries; however, I feel that much of the issue of loan repayment lies with students themselves.
    So many people feel they need to live beyond their means and lack the skills and information to form a budget and properly pay off debt. Salary and tuition adjustments may be helpful, but I think a better plan would be to give students the tools and thought processes to think about how they can successfully pay off a loan and make a living. Ideally, this would be part of undergraduate curriculums, but, mandatory money management classes during the first or second year of veterinary school would be helpful too.
    Learning to live within one’s means, to delay gratification and save for the future and to make good choices such as negotiating a starting salary that allows one to make their loan payments are the ways to deal with student debt, not tax forgiveness, government handouts or reducing veterinary class sizes. I hope this summit addresses these issues and puts a plan in place to provide vet students with information about money management.

    • While it is admirable that you have been able to handle your money well and pay off your debt, I feel it is very presumptuous and flippant to say it is solely the fault of the borrower. If that is true, then my fault lies with proceeding with a veterinary degree in the first place. While I may have not pinched every penny possible, I felt I was doomed from the beginning. I went to Ross, graduating 2010 with about $225,000. I did not fly home every break like other wealthier students. I stayed pet-sitting their dogs to make a little cash. There are no summer breaks to work and make an income. I was offered $75,000 with a $5,000 benefit package my first year out with which I was happy. I worked extra shifts at our sister hospital when needed. If I had paid the standard repayment, my monthly loan payment would have been a little over half my monthly income. That is simply not feasible. I lived with roommates initially then got my own apartment (reasonable rent for Arizona). Therefore I used the IBR program in order to be able to “live”. Now, of course, because of IBR my loan payment doesn’t even cover my interest and my loan is double what it was when I graduated. To switch to standard repayment now would make my monthly loan payment my entire monthly income. That is ridiculous. I should not have to work two jobs in order to pay off my loan. Our job is stressful enough. So, I pay my monthly payment on time every month knowing full well that when I’m about 57 it gets “forgiven” and I will owe the IRS a huge tax bill. I will have to make some arrangement with them at that point. I will not be retiring, that’s for sure. I cannot afford to buy a home. I probably will not ever get legally married since my spouse’s income would be figured into the payment and not make a dent anyway at this point. For now, I rent a room from my family’s house because now I live in California where rent is double. I have zero desire to put in extra hours because it doesn’t help bring my debt down. It’s ridiculous that my loans have a 7.35% interest rate. Short of winning the lottery or marrying a millionaire, I will never pay off this debt.

      I do wish I had the financial course Dr. Wilson did at Ross before I ever entered vet school. I remember being very depressed after that lecture. In hind sight, I would’ve pursued PA school or nursing where I could still experience the thrill of medicine but be able to have financial independence. The debt to income ratio for vets is out of control. The loan interest rates are too high and I do feel that there are too many vets (in southern California anyway). I do not feel we need more schools. And, knowing what I know now, I feel going to Ross was a horrible financial decision for me. At the same time, I love what I do and enjoy this career.

      • Dr. Robison, I apologize for sounding flippant. I did not mean to imply that the entire fault of loan repayment and issues surrounding veterinary tuition and salary are the fault of the student. Clearly, many people such as yourself do work hard, make sacrifices and carry enormous debt and it is admirable that you went ahead with your veterinary career because it was something you wanted to pursue even in the face of such debt.
        However, I still feel that budgeting and understanding what carrying such a large loan debt means for a student once in the work force is often overlooked, and I think it is just one more area that needs to be addressed in addition to other solutions for reducing tuition or paying down debt.
        You mention you felt “doomed from the beginning.” What if you had had resources to plan for how to tackle that debt before you incurred it? Maybe some of your choices would have been different, maybe not. I hope that the summit helps people in your situation find solutions to loan repayment and reduces debt for future veterinarians in addition to finding ways to make students more aware of what holding a large debt, even a more manageable one, could mean in planning for their futures.

  2. Actually, the solution is quite simple and is surmised in 3 parts: Less vets school grads (e.g. flooding the market with marginally educated, client-cultural unprepared, foreign trained perfunctory clinicians), higher profit margins (to pay recent grads education debts, invest in technology, staff) AND a full effort to unify the profession top down and bottom up so that we once again become colleagues, not competitors. As a profession, we can weather the food companies, mega pet stores and on-line info sites, if the DVMs here saw each other as an asset toward driving client awareness, increased office exams, backed by caring administrators in academia and the AVMA. We are well trained, intellectual care givers first, not shop keepers with weekly bargain flyers, or so I was taught by my professors. As is stands now, the efforts of most local clinicians is to cast suspicion on their nearby colleagues execution of medical records, anesthesia choices or diagnoses with little to no direct verbal communication as to the underlying case/client conditions. Having the AVMA hanging the impending threat of an influx of unprecedented, subpar opposition without an equal voice via the impending COE proposal in our future breeds anxiety, cynicism. It also further aggravates the current level of isolation as small business owners from our parent organization and our fellow professionals. This is not rocket science. If you don’t agree, check out the recent study by Google on creating the dynamics of successful business teams:
    https://rework.withgoogle.com/blog/five-keys-to-a-successful-google-team/
    http://www.businessinsider.com/google-on-habits-of-best-managers-2015-4
    This is not a personal opinion or a veiled, caustic attempt to denigrate any one or any group. It is the Achilles Heel of professionals who learn their art in marked detail and skate on the rest of the foundations of care delivery: social engineering, team building, economics, inventory management, collective buying co-ops, economic predictions and legal implications. All of the human issues that drive success.
    A strong national organization, the AVMA, should be our resource for those requirements above and beyond the capability of a small business, but easily achieved as a cooperative collective with common needs. A small fee from the members would be of immense value to all, including rebuilding the trust and membership of the AVMA.
    Bridge building takes time, and is best done on a small scale initially. Adding tens of thousands of new members with no loyalty to the current group will sideline those that serve as the association foundation. As Benjamin Franklin stated in Independence Hall at the signing of the Declaration of Independence “We must all hang together, or assuredly we shall all hang separately”.

  3. With all due respect to Dr. Dicks and the AVMA, veterinarians have little control over non-profit animal welfare organizations, private corporations, the pharmaceutical & medical equipment industries, banks, major universities, and societal values. We have to accept the things we cannot change. Vets must find the courage to adapt so that the value of the veterinary degree is restored despite the challenges before us. We must be willing to think outside the box because the status quo is what got us where we are today.

    This means creating innovative practice models and new ways to deliver veterinary care. It means making it harder to get into veterinary school – fewer schools, fewer students, increased (not reduced) hours of pre-vet unpaid experience. We must tighten restrictions on professional loans so that if grants, scholarships, and estimated post-graduate income are not sufficient to pay back the total student indebtedness in a maximum of 20 years, the applicant is declined. The profession should embrace and aggressively lobby for an expanded caregiving role for registered veterinary technicians and/or create a new paraprofessional similar to physician’s assistants. We must listen carefully to the feedback of female veterinarians and implement organizational changes that promote gender and wage equality.

    The law of supply and demand dictates that fewer veterinarians equals higher salaries. The last thing vets want is for animals to suffer as a result of diminished access to healthcare. Therefore, more practitioners with two- and four-year paraprofessional degrees should be permitted to provide preventative medicine and elective surgeries under the supervision of a licensed veterinarian. If we do this, pets win because access to primary care remains ubiquitous. Clients win because primary care remains affordable. New veterinary graduates see salaries increase and finally a reduction in DIR. Colleges of veterinary medicine benefit from newly created & expanding programs for paraprofessionals. The profession implements its own sustainable model for the future.

    These are not easy solutions, and they will require compromise & sacrifice. But we have reached the point in the veterinary profession where we literally cannot afford a passive approach. If we keep going the way we are going the profession will collapse upon itself. I don’t want to sit back and watch that happen.

    • I don’t disagree that veterinarians are currently “hav(ing) little control over non-profit animal welfare organizations, private corporations, the pharmaceutical & medical equipment industries, banks, major universities, and societal values.” I do however reject the notion that veterinarians can’t have some impact on all of these. And I strongly agree that “creating innovative practice models and new ways to deliver veterinary care” offers a potential solution. In fact, it is this very solution that would create the environment where veterinarians can exert more control over the entities listed. However, to suggest that the means for producing these innovative practice models by “making it harder to get into veterinary school – fewer schools, fewer students, increased (not reduced) hours of pre-vet unpaid experience. We must tighten restrictions on professional loans so that if grants, scholarships, and estimated post-graduate income are not sufficient to pay back the total student indebtedness in a maximum of 20 years, the applicant is declined” is counter indicative. Innovation occurs from competition, not the lack of it. To suggest that the way to improve veterinary incomes is to restrict the number of veterinarians, is to suggest that the only avenue for income improvement is to continue to raise prices and limit the availability of services. This is a strategy for further minimizing the role of veterinarians in animal health care. The amount of care needed by canines alone is more than four times what is provided. What is needed are ways to close the gap between what is needed and what is provided and do so in a manner that allows veterinarians the ability to receive a level of compensation in line with their investment. We hope to be providing some of these strategies at the AVMA convention in the Practice Management Core sessions.

      • I absolutely do not agree that this education (education as a whole) is or should ever be limited to wealthy scholars only.

        There needs to be a way to make a minimum that can be charged and a really good way to crack down on non-practitioners that practice veterinary medicine, that comes through help of our organization. Reporting someone to the attorney general means that I must put my information on the line, and take time off to prosecute. Raising prices for schools? Raising prices on commodities (BIG Pharma gets an increase every year!)? Raising prices at the exam table, until Dr. Google is the only veterinarian left? Or creating VALUE. The valuable veterinarian, and I am sure you are implying that the schools are valuable.

      • “The amount of care needed by canines alone is more than four times what is provided”

        What does that even mean Mike? it is such an ambiguous statement how can you possible enumerate it?
        If it is a round about way of saying many dogs dont receive vet care then we have already answered that question have we not? The owners of these dogs done see the value of vet care and/or cant afford vet care.Unless this is some new population of pet owners that we were not previously known about.
        It seems a bit of a cop out to me to write something that vague and use it as a basis to argue there is a market which may or may not even exist-depending on what you actually mean by your statement.

        Secondly your idea that competition always leads to innovation is a bit simplistic and certainly not always true.It is actually quite a complex relationship based on this article.

        http://scholar.harvard.edu/files/aghion/files/causal_effects_of_competition.pdf?m=1393886457

        “To suggest that the way to improve veterinary incomes is to restrict the number of veterinarians, is to suggest that the only avenue for income improvement is to continue to raise prices and limit the availability of services. This is a strategy for further minimizing the role of veterinarians in animal health care.”

        Well you could also say that if the market for veterinary services is saturated then limiting the number of new vets entering the profession WILL improve income because with less competition each veterinarian will have a larger market share.Adding new vets to the market does not in any way increase the role of vets in animal health care IF the market is saturated-it just splits up the available revenue amongst more vets resulting in decreased income for all.

        I find the idea that by somehow allowing increasing number of vets to compete against each other so that they can innovate and find new ways of earning a living a bit shocking to be honest.

        if we look at supply and demand shouldnt supply be increased AS A RESULT of demand NOT in the hope that it will increase demand.That just seems counterintuitive to me and basic economics.

        It seem like you are coming up with more and more convoluted reasoning to avoid the elephant in the room that there are simply too many vets for the amount of work we currently have.

        In a normal world you would look to increase demand first to satisfy the current (or excess capacity) and then if demand exceeds supply THEN you would look to expand the workforce.That is surely the best way to ensure that the vet has sufficient income to service their debt .

        I think it a pretty bad state of affairs when the potential survival and success of new graduate veterinarians in dependent on innovations that no one seems to be able to identfy and a market that doesnt seem to exist apart from in the minds of those looking to justify silence on the ever increasing supply of veterinarians

        I`l retire to bedlam

        • Mike,

          Could you kindly address the points that Carl Darby expressed in his response to your theory that increased competition is actually good for the AVMA’s veterinarians?

          His comments tend to follow common sense and basic supply and demand economics. Why is it different from your perspective?

          As the mouthpiece for the AVMA as it is related to economics, I would really like to understand your explanation.

      • Dicks: “And I strongly agree that “creating innovative practice models and new ways to deliver veterinary care” offers a potential solution.”

        Me: Once again the arrogance of Mr. Dicks is expressed in his disbelief that we are not already engaged in exploring different profit centers and revenue streams. We are much better able to understand veterinary economics in the trenches, than he is.

        Dicks: “The amount of care needed by canines alone is more than four times what is provided. What is needed are ways to close the gap between what is needed and what is provided and do so in a manner that allows veterinarians the ability to receive a level of compensation in line with their investment.”

        Me: Again, Mr. Dicks seems to be channeling Mark Cushing, and not listening to, or appreciating, the needs of the veterinary professionals in the United States. Generalizations like “Well, all you need to do is stimulate demand” is a meaningless platitude both tired and lazy. If the AVMA hopes to recapture the trust of the membership, and those like me who have left the membership, they are going to need more honesty than this professional spin-doctor can provide.

    • Why don’t all organizations try to get the government to let vets (actually all students) to write off all the interest paid on student loans. This would help dramatically instead of the small deduction currently allowed. Media bombards people with the benefits of getting a higher education; yet, punish them by not allowing tax deductions.

  4. Will the financial assistance help previous grads who are still paying loans. I have been paying religiously for 18 yrs. No end in sight. Many vets like myself would love some help.

    • One component of the DIR is income. We certainly need new strategies to improve the ability of veterinarians to provide the minimum standards of care required by all animals. in achieving this goal, we will also improve the DIR and the Net Present Value of the DVM degree – the lifelong value (income) of all veterinarians.

      • But the lion’s share of the problem can be linked to the DEBT part in the DIR, yet besides alluding to the fact that some students do not spend wisely, there has been precious little discussion from you on how to rein in tuition or what the responsibility of the universities is in all this. Why is that?

      • Mike,

        I was hoping that you would shed some light for us why you always seem keep the role of the universities out of the discussion when speaking of debt to income ratios. I am disappointed, but not entirely surprised, to see you sidestep this once again.

        Greg