Just about every week, a new article appears in a local paper, national journal, or magazine that speaks to educational debt accumulated by today's college graduates. Many of these stories highlight individuals, to provide a personal touch, but almost all emphasize how one graduate after another borrowed more than he or she realized, with one eye closed to the terms of the loan and the other eye opened just enough to receive the checks. According to authors from the Federal Reserve Bank of New York,1 even though the number of active student loan borrowers decreased from about 12 million in 2010 to about 9 million in 2015, the aggregate outstanding balance for all borrowers continued to grow because many borrowers were not repaying older loans.
Even more worryingly, it appears that many college graduates don't know much about the terms of the loans they have acquired or are having difficulties meeting the payments for those loans once they graduate. For example, a recently published news article2 highlighted research from Citizens Bank claiming that 37% of college graduates were unaware of the interest rate on their student loans and cited figures from the US Department of Education suggesting that 43% of borrowers who hold federal student loans were either behind on their payments or not making payments at all.
Unfortunately, what is true for college graduates in general appears to also be true for many new graduates entering the veterinary profession. According to results of the AVMA's annual survey of senior veterinary students,2 of those students who graduated from the 28 US colleges and schools of veterinary medicine in 2015, 89% had educational debt at the time of graduation, with mean debt accumulated during veterinary college for all students being $142,394. Approximately 68% of the 2015 graduates had debt between $50,000 and $221,000, with 5% having debt > $300,000.
Given these findings, questions immediately arise as to what expenses all of that debt went toward and whether the amount of debt accumulated was reasonable or unreasonable, considering the expenses students faced.
To help answer these questions, the annual AVMA senior veterinary student surveys for 2013 through 2015 included a question soliciting information on the distribution of total educational debt accumulated. Specifically, students were asked to indicate what percentage of their total educational debt was attributable to each of the following 6 categories: tuition and fees, living expenses (room and board), transportation, books and educational materials, veterinary equipment, and other. For 2015, on average, 68.3% of total educational debt was attributed to tuition and fees, 19.5% was attributed to living expenses (including room and board), 4.4% was attributed to transportation, 3.3% was attributed to books and educational materials, 2.0% was attributed to veterinary equipment, and 2.5% was attributed to all other expenses (Figure 1).
Differences were found, however, when mean annual debt incurred by students at each of the 27 responding schools (the University of California-Davis School of Veterinary Medicine was omitted because of a lack of responses) was calculated. For each respondent, total debt accumulated during veterinary college was multiplied by reported percentage attributable to tuition and fees or reported percentage attributable to living expenses, and the result was divided by 4 (Figure 2). According to this, mean annual debt incurred as a result of tuition and fees and living expenses ranged from just over $18,000 to > $55,000, depending on the school.
For comparison purposes, information on the estimated cost of attendance was obtained from the public websites of the 30 veterinary colleges in the United States (the 28 from which students graduated in 2015, along with Lincoln Memorial University College of Veterinary Medicine and Midwestern University College of Veterinary Medicine, which have both begun to accept students). Reported costs were broken down into various categories (eg, tuition and fees, living expenses, books and equipment, transportation, and other miscellaneous costs), but when looking at anticipated resident tuition and fees along with living expenses, the annual total ranged from just over $25,000 to > $80,000 (Figure 3), depending on the school.
Thus, overall, the annual debt incurred appeared to be within the range of estimated annual costs reported by the various colleges. However, differences between estimated costs and debt incurred were found. For instance, when estimated annual living expenses reported by the colleges were subtracted from mean annual debt attributable to living expenses, differences as high as $25,000 were found (Figure 4). This indicated that, with the exception of Tuskegee University, the amount of debt respondents attributed to living expenses was consistently less than the amount colleges reported as necessary to cover living expenses. Evidently, therefore, students were not incurring excessive debt because of exorbitant living while in veterinary college or, at least, were not borrowing excessively to cover the cost of living expenses.
In a similar way, by multiplying mean total educational debt ($142,394) by the mean percentage of total debt attributed to tuition and fees (68.3%), one can estimate that for veterinary students who graduated in 2015, mean debt attributable to tuition and fees was $97,255. Assuming that this debt was evenly distributed across all 4 years of veterinary college, that comes to $24,314 per year. By comparison, the reported mean resident tuition for the 2015 academic year for US colleges of veterinary medicine was $27,884.3
One can also estimate that mean debt attributable to living expenses was $27,767 (ie, $142,394 × 19.5%) or, if the debt was distributed evenly across the 4 years of training, $6,942 per year. This is much lower than the cost of living in the United States, as reported by the Economic Policy Institute, which states that for a single adult with no children, the cost of living is $28,474 per year.4
In looking at survey responses, we also found, not too surprisingly, that the distribution of educational debt had changed little over the past 3 years. For instance, for students graduating in 2013, 2014, and 2015, mean percentage of total educational debt attributed to tuition and fees ranged from 68.3% to 69.6% and mean percentage of total educational debt attributed to living expenses ranged from 17.9% to 19.5% (Figure 5). On the other hand, there were substantial differences in the distribution of educational debt between students classified as residents and those classified as nonresidents at the time of graduation (Figure 6). For students classified as residents at the time of graduation, mean percentage of total debt attributed to tuition and fees ranged from 65.0% to 67.8%, whereas for students classified as nonresidents at the time of graduation, mean percentage of total debt attributed to tuition and fees ranged from 71.7% to 76.3%. This was particularly striking because for students who graduated in 2015, mean total educational debt for residents was $129,000, whereas mean total educational debt for nonresidents was $173,000.
Overall, the AVMA senior survey data suggested that the amount of educational debt new graduates accumulated was generally not unreasonable, given the expenses these students faced during their years of veterinary college training. More than two-thirds of the total educational debt was attributed to tuition and fees, with the mean annual debt accumulated because of tuition and fees remarkably similar to mean annual resident tuition reported for US colleges of veterinary medicine. In addition, mean amount of debt attributable to living expenses was substantially lower than the cost of living for a single adult. Although only 2.3% of students who graduated in 2015 reported total education debt > $320,000, multiplying this by 19.5% to estimate the amount of debt attributable to living expenses yielded $62,400, or $15,600 per year for 4 years, which is still less than the reported cost of living for a single adult in the United States.
Of course, several limitations of these findings must be addressed. First, the data were self-reported by students several weeks before graduation from veterinary college, and it is possible that many respondents were not aware of the exact amount of debt they had accumulated. Second, percentages reported for total debt attributable to each of the expense categories were also estimates provided by students. Third, 29.4% of the 2015 graduating class reported that they graduated with nonresidency status. However, several colleges have mechanisms in place that allow out-of-state students to establish residency status, and other states that do not have a veterinary college subsidize tuition for residents who must go out of state to attend veterinary college. Therefore, some students who graduated with residency status may have started veterinary college with nonresidency status. In addition, some students received grants, scholarships, and other financial aid that would have minimized the amount of educational debt incurred. Therefore, we were unable to determine exactly what each student paid in tuition.
Nonetheless, from our findings, it appeared that the typical veterinary student was relatively conservative in the amount of educational debt she or he had taken on relative to the cost of tuition and living expense. Although students were borrowing high amounts, this was largely because tuition and fees were costly, and responses to the senior survey did not provide any evidence to suggest that veterinary students were incurring exorbitant living expenses. Taking the data at face value, because so much of educational debt was attributable to tuition and fees, veterinary students are likely to face a crisis in the near future if the increase in tuition and fees continues to outpace the increase in starting salaries. Ultimately, however, it appears that veterinary students are not accumulating educational debt irresponsibly.
1. Haughwout A, Lee D, Scally J, et al. Student loan borrowing and repayment trends, 2015. Available at: www.newyorkfed.org/medialibrary/media/newsevents/mediaadvisory/2015/Student-Loan-Press-Briefing-Presentation.pdf. Accessed Apr 16, 2016.
2. Henderson JM. The scary truth about millennials and student loan debt. Forbes 2016;(Apr):7 Available at www.forbes.com/sites/jmaureenhenderson/2016/04/07/the-scary-truth-about-millennials-and-student-loan-debt/#3c5bca4ab8ae. Accessed Apr 16, 2016.
3. Dicks MR, Bain B, Knippenberg R, et al. 2016 AVMA and AAVMC report on the market for veterinary education. Schaumburg, Ill: AVMA, 2016.
4. Career Trends. Available at: cost-of-living.careertrends.com/l/615/The-United-States. Accessed May 10, 2016.