Students press for personal finance education

T. Will O’Neill says if he had known what he was getting into, he would not have gone to veterinary college. The fourth-year veterinary student at Michigan State University reports that he is better now at managing his expenses after receiving financial literacy education in his second year.

Still, when it comes to the true cost of veterinary education, “new veterinary students need to go in with open eyes,” O’Neill said. “The big thing is transparency, across the board. People are sick of being in the dark.”

The need for more and better information about how much students can expect to pay in total after graduation, how to finance educational debt, and how to earn more to pay that debt down faster (see story) was frequently brought up by attendees of the Economics of Veterinary Medical Education Summit as a way of helping reduce the debt-to-income ratio for new graduates entering the profession. In seems, however, that some resources are already available but haven’t yet been well developed, well promoted, or fully used.

Data for applicants

Logically, a veterinary college’s website is an important resource for potential applicants. But a recent search by JAVMA News of the financial aid and tuition sections shows that many lack useful, or even accurate, information.

Most veterinary colleges refer to the university’s financial aid pages, but often these are geared toward undergraduates, particularly the net price calculators.

A handful of the veterinary colleges’ sites had out-of-date tuition information or broken links. Among those with budget estimates, some left out costs such as transportation or the required purchase of a laptop.

Only one institution, Iowa State University, listed mean educational debt of its veterinary students; no veterinary college listed its graduates’ mean debt-to-income ratio. That said, during personal communication with applicants, many colleges did offer them sample budgets and tools for estimating their cost of living while enrolled.

Other tools include the Veterinary Information Network Foundation’s Cost of Education Map and Student Loan Repayment Simulator. The former lists cumulative tuition costs and living expenses for four years. Plus, it compares veterinary colleges’ costs and ranks them.

Jessica Carie, Student AVMA immediate past president, said at the summit she thinks it’s important for veterinary colleges to spell out the total costs to obtain a degree rather than just tuition rates for four years.

“I feel like that’s basically lying to students unless they have a magic tree to pay off their tuition at the time of graduation,” she said. “I rarely hear about students talking about the $700,000 it will cost over 25 to 30 years. I always hear whatever tuition is. You’re setting up a false expectation when saying you’ll be $150,000 in debt, when really, it’s half a million dollars or more.”

Dr. Andrew Maccabe, executive director of the AAVMC, pledged that his association will work with the VIN Foundation and the AVMA Veterinary Economics Division to create a comprehensive set of data regarding the total cost of education, including personal expenses as well as the percentage of students who receive scholarships at individual member institutions. The information will be published this summer in a series of infographics along with other information geared toward preveterinary students. Prospective applicants can then use this information as a tool when making application decisions, Dr. Maccabe said.

ABCs of personal finance

Students at the summit also made it known that there is clearly a need for better financial literacy on veterinary college campuses.

Dr. Caroline Cantner, assistant director for student initiatives in the AVMA Membership and Field Services Division, spoke on behalf of the students and recent graduates group. She said financial literacy should be emphasized starting at orientation and supported throughout a student’s four years with a suite of resources. A culture of personal financial literacy should be cultivated among students and faculty.

“Efforts to date have focused primarily on business education, not general financial literacy. The availability of statistically significant, peer-reviewed data on successful financial counseling interventions nationally is limited. And there has been no comprehensive assessment of outcomes for current business-related interventions in the student population,” Dr. Cantner said.

Dr. Cantner’s statement was reinforced by a 10-question survey the Student AVMA House of Delegates sent this past year to its student chapter members to gauge what each veterinary college is doing to make its students “loan repayment literate.”

Thirty of the 36 SAVMA chapters provided at least one response; the six chapters that did not respond were Western University of Health Sciences, St. Matthew’s University, Tuskegee University, Midwestern University, Lincoln Memorial University, and the Royal Veterinary College.

The survey results are as follows:

• 64 percent of respondents said loan repayment/debt management options were not included with any course work/curriculum at their institution.
• 37 percent said they were unaware of any resources about federal loan repayment at their institution.
• 24 percent who were aware of resources at their institution said they’re easily accessible.
• 34 percent said their veterinary college employs a full-time financial adviser/counselor.
• 33 percent estimated that 25 percent or less of students at their institution use student loan repayment resources.

Matt Holland, SAVMA president, said, “Students are scared because we know we’re in dire straits with debt, but we’re not aware of support systems in place.”

Financial literacy and career advising

At the summit, attendees were reminded of a document that outlines recommendations for veterinary colleges to improve students’ ability to manage their educational debt, including financial aid counseling. The Student Debt Initiative Report (PDF) was created by Dr. Donna L. Harris. She teaches business and career development topics at the MSU College of Veterinary Medicine and St. Matthew’s School of Veterinary Medicine. The report, commissioned by the AAVMC, came out four years ago but has not been widely implemented.

In the report, Dr. Harris recommends that each veterinary college establish a financial aid officer who is responsible for helping students make better financial decisions as they attempt to most efficiently and economically fund their education. She suggests the AAVMC create an online forum for veterinary FAOs to share best practices, in addition to exploring options for an outside company to develop FAO educational tools or providing counseling for AAVMC member institutions without an FAO.

It was pointed out that a disadvantage of an FAO position is the cost. Dr. Trevor Ames, immediate past president of the AAVMC, suggested instead that the position could be a shared service provided by the AAVMC.

Other report recommendations involve developing a four-year financial literacy curriculum for shared use among AAVMC member institutions, integrating the VIN Foundation’s Student Loan Repayment Simulator into the financial literacy program, and developing and maintaining an online private data organizer for students to input and track their educational loans.

Since the report came out, the AAVMC has created a member institution tuition map on its website and included on AAVMC applicant surveys information on financial literacy. The association also established an Educational Debt Working Group to review the report and determine the feasibility of curriculum development as described within the Harris report. The consensus on curriculum was that many elements of practice-ownership financial literacy are already included within business classes, and the group did not want to duplicate those efforts.

In addition, the AAVMC Admissions and Recruitment Committee has created a preveterinary adviser development subcommittee to develop tools for advisers on student debt and financial literacy.

Dr. Maccabe promised that the AAVMC will build on the Harris report, in part by working with the Veterinary Business Management Association, a student-run organization dedicated to increasing business acumen and providing networking opportunities to veterinarians and veterinary students.

“We know the VBMA has the infrastructure for teaching business and management skills and will hopefully work with (the VBMA) to add financial literacy,” he said.

Cause for hope

T. Will O’Neill said while he doesn’t think financial literacy solves the debt problem, it is the most important first step in confronting it.

“The biggest part of the problem is ballooning tuition costs, which was barely addressed at the conference. However, financial literacy will help students plan individually to figure out how to make things possible for them,” he said.

O’Neill is optimistic that the summit was the beginning of real change in the profession. Already, students who were at the summit were sending letters to their representatives at the state and federal levels as well as administration officials to make them aware of the gravity of veterinarians’ situation.

“If nothing changes, lower-income students will stop coming; only those from wealthy families will be able to justify the costs, and we will lose any shot at true diversity our profession ever had,” he said.

Related JAVMA content:

Making progress one meeting at a time (Oct. 1, 2012)

Taking matters into their own hands (Feb. 1, 2012)