The High Cost of a Veterinary Degree
An Interview with Dean Trevor Ames
By Fran Howard
The cost of obtaining a doctor of veterinary medicine (DVM) degree has risen dramatically over the past 15 years, even as starting salaries stagnated in the years following the recession. In recent years, salaries have started to increase and may increase more significantly if there are more jobs than graduates again next year.
Despite these salary concerns, the veterinary degree remains in demand based on the number of applicants, and the veterinary needs of many rural and impoverished areas of the United States remain underserved.
Between 2003 and 2013, applications to U.S. veterinary schools increased by 51 percent, and only about half of all applicants were accepted due to limited space, according to the U.S. Bureau of Labor Statistics. Current figures show that the median amount of student debt for graduates of U.S. veterinary schools is $144,500, about double the starting salary for new graduates.
Keeping the DVM degree accessible to those who want to pursue a career in veterinary medicine is crucial. By 2050, the Food and Agricultural Organization estimates that food production will need to increase by 70 percent to feed the world’s growing population and demand for animal proteins. Food safety and public health issues also continue to increase on a global scale.
To better understand the consequences of rising student debt, we asked Dr. Trevor Ames, dean of the University of Minnesota College of Veterinary Medicine, to explain the causes of rising tuition and discuss some of the solutions to keep student debt manageable and the DVM degree accessible.
Why has tuition at veterinary schools risen so dramatically over the past decade?
Zach Loppnow, Class of 2017
Zach Loppnow considers himself one of the lucky ones. When he graduates next May, he will have only $100,000 in student loans. As an in-state resident, Loppnow, who grew up on a hog farm near Lake City, Minnesota, pays about $33,000 a year in tuition. To help fund his veterinary education, he took out $25,000 annually in student loans. “My loans are a big concern for me. They are a big price tag for me to pay to be able to do what I feel like I should be doing with my career,” Loppnow says.
A four-year recipient of the Robert Merrill Memorial Scholarship, Loppnow received a total of $10,000 to $12,000 from that scholarship and two others each year. He also works part-time with Hercules, a Belgian draft horse and a blood donor for the Piper Equine Hospital. “My scholarship was a major factor in my deciding to attend the University of Minnesota veterinary school,” he says. “It gave me the opportunity to be a student and experience a topflight education without having to worry quite as much about having to maintain a part-time job, or trying to find funding, or worrying about my student loans creeping so high that they would be unsustainable.”
Loppnow is the past president of the Minnesota chapter of the Veterinary Business Management Association (VBMA), which allows students to supplement the business content offered in the formal curriculum. He credits the program with helping him plan to manage his debt load and feel more comfortable with it.
“VBMA really educates us about student debt and repayment policies that help us to plan and reduce our debt load over the life of the loans,” he says. “It also builds our communication and leadership skills while helping us to understand how our salary and production fit into the overall revenue generation of a practice. That understanding translates into us being able to command higher salaries by generating higher production. Both of these avenues combine to lower that debt-to-income ratio—which has skyrocketed in the last decade—to a more manageable number.”
After he graduates, Loppnow plans to become an equine practitioner in private practice, where he will work for a few years before opening his own practice or investing in an existing practice to increase his earning power. He will raise hogs as a second source of income. Loppnow hopes to be making $65,000 to $75,000 in five years, which is a bit above average for the sector and experience level. “I’m going to negotiate for as high a salary as I can when I graduate,” he says. “I also hope to enroll in either the income-based or pay-as-you-earn government loan repayment program, which will reduce my monthly payment and allow me to save money so I can invest in a practice.”
Mikayla Schroeder, 2017
Mikayla Schroeder knew she wanted to be a veterinarian at the age of 5. At age 9, she began shadowing veterinarians at local clinics, and she worked as a veterinary technician when she was an undergraduate student in Montana. Next May, her lifelong goal will become a reality. Reaching her goal wasn’t inexpensive. By the time she graduates, Schroeder will have more than $350,000 in student loans that carry interest rates between 5.3 and 7.2 percent. It’s highly unlikely that she will be able to pay much more than a portion of the accrued interest for the first few years after graduating.
“Originally I wanted to be an equine vet, but I really love small animal surgery, so I plan to pursue a three- or four-year residency after completing one or two years of internship,” says Schroeder. In addition to handling the heavy academic load of vet school, Schroeder works three jobs—as an after-hours, on-call surgery technician at the Veterinary Medical Center, where she also cleans the surgery suites, and as a riding instructor. She has also participated in the Veterinary Business Management Association.
Schroeder grew up in Franktown, Colorado, and pays $57,800 per year in tuition as a nonresident, thousands more than her in-state classmates. Her plans to pursue what will likely be a surgical residency in another state and her willingness to move to wherever the best opportunity arises makes her ineligible for in-state residence status as a veterinary student.
“The average salary for a small animal rotating intern is $26,000 a year,” Schroeder says. “The first year or two, I won’t make enough money to begin paying off the principal of my student loans, so I will attempt to enroll in a pay-as-you-earn program. The starting salary for a certified small animal veterinary surgeon is anywhere between $115,000 and $175,000. That’s when I hope to be able to start paying off my loans.”
Myranda Beckmann, 2018
Myranda “Mandi” Beckmann, who grew up in North Branch, Minnesota, plans to continue to drive her 2006 Ford Focus for several more years after she graduates from veterinary school in May 2018. She also plans to delay buying a house, and hopes her frugal mindset will allow her to make a dent in the $138,000 in student loans that she will have taken out to fund her veterinary education. On top of the principal, she will pay interest rates of 5.5 to 7 percent on the loans.
As an in-state student, Beckmann has been able to keep her debt somewhat manageable and will receive about $20,000 from her grandparents when she graduates, which she plans to apply to her loans. Even so, Beckmann finds herself worrying about her student debt. “It’s one of those things where you oscillate between feeling positive about your plan to pay it off and feeling overwhelmed,” she says. “There is worry and stress about how it will all play out after graduation.”
Beckmann has already demonstrated financial discipline by paying off her undergraduate student loan of $6,500, which she used to help pay for a study-abroad program. The remainder of her undergraduate tuition was paid with a four-year, full-ride academic scholarship. Like Zach Loppnow, Beckmann has also played a leadership role in the Minnesota chapter of the Veterinary Business Management Association, which she credits with helping her feel better equipped to find a job after graduation that supports her financial needs, not least of which will be loan repayment.
“I do believe that I am now better prepared to advocate for myself during my initial job search and in contract negotiations,” she says. “My plan is to use some sort of income-based repayment plan to begin paying off my student loans. I also hope to get a well-paying job, and I plan to live frugally after I graduate. Ideally, if I could get hired at a small animal or mixed practice at $65,000 to $70,000, I would be happy.”
For veterinary colleges that receive state funding, the vast majority of the tuition increase has been due to decreased or flat state support. The effects of decreased state support have been pretty dramatic. Since fiscal year 2009, the University of Minnesota College of Veterinary Medicine’s budget has been reduced by almost 30 percent. Even now in better financial times, the college has not received any significant increases in state funding. The federal support needed to ensure adequate research programs has also declined, and that is a major concern for research universities.
At the same time, expenses are increasing. Medical inflation, whether for hospital equipment, supplies, or diagnostic tests, has increased much more dramatically than the cost of living. That’s been a driver. The employers of our graduates want career-ready veterinarians. Thirty years ago, every veterinarian basically had the same curriculum. Today we are producing career-ready veterinarians in all of the major food animal areas, as well as in the areas of companion animal, equine, research, and public health. This requires much broader training and much greater flexibility. Increasing federal, state, and university regulations related to animal use, more complicated business systems and reporting processes, and increasing demands related to accreditation have also increased expenses. All of these things have added to our expenses at a time when we’ve had either significant cuts or flat budgets.
Why is tuition at the University of Minnesota College of Veterinary Medicine one of the highest among U.S. veterinary colleges?
As long as I’ve been at the University, we’ve tended to have higher tuition, and that has been associated with our lower level of state support compared to other colleges. In addition, in the early 2000s, the University of Minnesota was forced to increase tuition pretty significantly over a number of years to deal with budgetary challenges. There were two years when we had back-to-back, double-digit tuition increases, which really ramped up the cost of tuition.
The University of Minnesota faces certain expectations that other veterinary colleges don’t have to deal with. As part of a land-grant university in a major agricultural state—we are sixth in the nation in terms of animal agriculture—we are expected to conduct research that helps the state’s agricultural sectors succeed. As part of a major research university—an R1 Doctoral University—the standards and research expectations placed on the veterinary college are also elevated and add to our expenses.
We are also expected to provide career-ready graduates who can go into the various sectors of the profession and succeed. We are the only college that selects for professional traits that predict success in the profession, and we intensively develop those traits in our students so that when they graduate they will be successful.
Our training programs make our graduates some of the best in the nation. We have invested in excellent training facilities in companion animal medicine and surgery with our Veterinary Medical Center; equine medicine and surgery with our Leatherdale Equine Center; dairy with our Dairy Education Center; small ruminants with our Small Ruminant Teaching Farm; public health with our combined DVM/MPH program, offered jointly through our Center for Animal Health and Food Safety and the School of Public Health—which is by far the largest and most successful in the nation; and wildlife with The Raptor Center. For the Dairy Education Center, we have developed a successful public-private partnership with a large dairy in southern Minnesota to offer students this unique learning experience. We also have the second-oldest DVM/PhD program in the nation through our commitment to training researchers.
We are heavily invested in providing a very high-quality program at a land grant university that meets the needs of a major agricultural state.
What exactly do you mean when you say you select students for professional traits that predict success?
Since 2004, we have been using behavioral interviews developed by a large research study conducted and led by the University of Minnesota in conjunction with a number of other veterinary schools to select students with professional traits that will help them succeed in the profession. To develop the survey, we interviewed and conducted focus groups with a large cohort of what were identified as “successful veterinarians” by their peers. We then identified a number of behavioral competencies that predict for success in the profession, including communication skills, emotional resilience, ability to think innovatively, and ability to strive for results. Working with PDI, a local human resources professional development company, we developed a behavioral interview that we administer to about 300 applicants each year.
Out of those applicants, we accept the top 100. Then we very purposefully use our professional development courses, including our off-site orientation program, the Gopher Orientation and Leadership Experience (GOALE), to develop those traits. People will argue that those traits predict for 50 to 80 percent of a person’s success after they graduate—so as much as we as faculty would like to believe that our knowledge of large animal medicine or biochemistry determines our students’ success, these professional traits are extremely important.
Recently, Michigan State University College of Veterinary Medicine, the American Veterinary Medical Association, and the Association of American Veterinary Medical Colleges held the Economics of Veterinary Medical Education Summit. What was the purpose of the summit?
Educational debt, a national concern across professions, now exceeds $1.2 trillion and surpasses national credit card debt and auto loan debt combined. Veterinary medicine has the highest debt-to-income ratio among the various health professions, according to a 2013 article in the New England Journal of Medicine. At the summit, participants explored ways to reduce the cost of veterinary education.
What were some of the key points that came out of the summit?
The 180 summit attendees—who represented various facets of the profession, including veterinary students and recent graduates, veterinary medical colleges, employers of veterinarians, governmental agencies, and veterinary associations—offered many good ideas. By the end of the summit, participants had developed the Fix the Debt Initiative, a five-pronged approach to dealing with rising student debt: decrease tuition costs at veterinary colleges, increase the value of graduates so employers can provide them higher salaries, implement a national scholarship program, increase advocacy for veterinary colleges, and reduce the interest rate on student loans.
The interest rate on professional and graduate student loans ranges from more than 5 percent to over 6 percent. These interest rates offered by the federal government are extraordinarily high when you can refinance your home for close to 3 percent. These high interest rates are compounded from the time the student loans are taken out, and some loans have origination fees. Our students’ debt is increasing significantly while they are in college due to these high interest rates, making it more difficult for them to pay off their loans after they graduate. This is something that a number of U.S. legislators, including Senator Debbie Stabenow, are tackling because they think the interest rates being imposed on our students are outrageous.
What is the college doing to keep tuition costs down?
In the last five years, we have had more latitude in how we manage tuition. In the last four years, we have been able to freeze, reduce, or minimally increase tuition—and we are committed to continuing that trend. The main mechanism to freeze or reduce tuition is to reduce expenses, and the main way to reduce expenses has been to reduce the number of employees. In addition to continuing to improve the productivity of our employees, we need to find other mechanisms to keep tuition down, such as increased state support, scholarship funding, and loan-forgiveness programs. We have already prioritized DVM scholarships as part of the University’s capital campaign, and we will continue to strengthen this effort. Finally, the college, together with the deans of veterinary schools at the other Big 10 universities, will explore options for making the pre-veterinary curricula more efficient to complete.
What are other colleges of veterinary medicine doing to keep tuition costs down?
Other veterinary colleges are also either freezing tuition or looking at ways to increase scholarships and advocacy with state and federal governments. The high cost of interest on student loans for professional and graduate students really needs to be addressed. The American Veterinary Medical Association is also planning a national campaign for scholarships for veterinary students. The idea is that raising awareness among all stakeholders about the severity of the student debt problem will bolster efforts to raise funds for scholarships.
According to several sources, salaries of first-year veterinarians have not kept pace with rising tuition. What is causing this discrepancy?
For a variety of professions, salaries coming out of the recession have not risen as we would have hoped, and employers are looking for new graduates to bring greater value to their practices or companies. As the economy has improved, there has been more competition for employees, and that may drive up salaries. However, I think we are fixating a little too much on starting salaries and not salaries three to five years out. I like to remind people that the starting salary for an MD is only $50,000, and they are going to make that for three to six years, depending on the residency program. A lot of our graduates have seen significant salary increases after a few years; we would like to see that happen for every single one of our graduates.
The other reason not to focus on starting salaries is that they can also be skewed by the number of people doing internships. If the starting salary for a third of the class is only $30,000 because they are doing an internship, that will bring down the overall average starting salary, which is close to $70,000.
The college surveyed incoming veterinary students in 2013 to determine whether they had a realistic view of both the amount of debt they would incus in vet school and how much they would make once they graduated. What did that survey show?
The survey showed that first-year veterinary students were aware of the costs of pursuing a veterinary degree and that they had a realistic view of their future salary potential. It also indicated that these students thought they could make a higher salary as a veterinarian than they could make without a veterinary degree.
What programs are available to graduates to help them either reduce their student debt or pay back their loans?
College scholarships and post-college scholarships are becoming increasingly important. In the last nine years, we have increased the amount of money we give out from $170,000 a year to around $600,000 a year. Our goal is to continue to increase that amount. There are also state and federal loan forgiveness programs. The college and the Minnesota Veterinary Medical Association have worked with the state legislature to create a state loan-forgiveness program that provides $250,000 every two years to help a few students who are working in underserved, rural areas. There is also a federal loan-forgiveness program, which is also targeted at graduates working in underserved, rural agricultural areas. Every year, the federal loan forgiveness program provides debt relief for about 60 veterinarians, but 60 veterinarians out of 2,800 to 3,000 graduates a year is certainly not enough.
Then there are payment options for student loans, such as income-based repayment or pay-as-you-earn options that allow a graduate to pay a fixed percentage of their salary to their loan. Those working in the public sector—at colleges and for state or federal governments—can have their loans forgiven completely tax-free after 10 years of working in the public sector. This provides an incentive for graduates to pursue professions in the public sector. Those working in the private sector can have their loans forgiven after 20 years, but they have to pay taxes on the balance of the loan that was forgiven—so if they still owe $200,000, for example, and that is forgiven, they could still have a pretty sizeable income tax bill to deal with.
Other than the big tax hit for those in the private sector who receive loan forgiveness, are there other pitfalls to these options?
One of the pitfalls of the income-based and pay-as-you-earn options is again tied to these very high interest rates that make it hard to buy down the principal, so the principal and the amount owed may actually increase over the years. The high interest rates on student loans, especially on nonsubsidized professional and graduate student loans, are a major national issue that has to be dealt with.
Have things changed dramatically since you were in vet school? Did you graduate with a lot of student debt?
I’m proud to say that Dr. Douglas Freeman, the dean of the school that I graduated from—the Western College of Veterinary Medicine (WCVM) at the University of Saskatchewan—is a U of M grad. To give you another comparison, 70 percent of the WCVM’s budget is covered by Canada’s four western provinces; about 16 percent of our budget is covered by the state of Minnesota. Tuition at the WCVM is much lower because of the higher government support for veterinary education.
When I graduated from veterinary school, I was fortunate that my tuition was $700 a year, and I was able to get scholarships and summer jobs that helped me with my living expenses and tuition. I also lived in a house trailer for $30 a month rent.
What advice do you have for current and incoming veterinary students related to student debt?
Anything they can do to manage their debt is vital, such as limiting their expenses while they are in veterinary college and as new graduates.
In light of the rising cost of veterinary education, is pursuing a DVM degree still a worthwhile goal?
I obviously think it is a wonderful profession, and the need for veterinarians has never been greater. I am very excited about the shared commitment and ownership of the Fix the Debt initiative, in which colleges, professional organizations, employers, and advocacy groups are coming together to tackle this problem so that the issue of student debt does not threaten the future success of our profession. This is a multifactorial problem that requires everyone working together.
This article originally appeared in the Fall 2016/Winter 2017 issue of Profiles magazine, the College of Veterinary Medicine's bi-annual publication for alumni, donors, and other friends of the college.