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Saturday, November 15, 2014

The News Gets Worse...New Veterinary Degrees May Not Pay Off

Yes it's time for more bad news for aspiring veterinarians.  However, I think it's more of a reality check.  An article was recently published through the Veterinary Information Network (VIN) about a current study on the economic prospects of a veterinary career.  It should come as no surprise to anyone familiar with the field, or anyone who has followed my blog for the last couple of years, that the news wasn't very encouraging.  Here are some choice quotes from the article (read the full article at the link above).

Michael Dicks, who heads AVMA's economics division, reported that based on projected lifetime earnings potential, the average college graduate may do better financially to take a job immediately after earning a Bachelor of Science degree rather than attend veterinary school and work a full career as a veterinary associate. That is, the increase in lifetime earnings conferred by the DVM degree for the average associate in a companion animal practice will not make up for the average cost (including the loss of potential earnings during veterinary school) of a veterinary education. [emphasis mine]

Despite increasingly prominent warnings about the economics of the profession, student enrollment has continued to grow. New schools as well as class size increases have raised the number of available seats domestically, while a growing number of U.S. students are attending veterinary colleges in other countries. In 2013, more than 25 percent of the 4,460 new U.S. veterinary students were attending foreign colleges, according to data from the Association of American Veterinary Medical Colleges.

The growth in student enrollment has not been accompanied by a proportional increase in applicants. Counting international seats, the ratio of applications to first-year enrollment has fallen to 1.64 to 1, according to figures presented Tuesday by Lisa Greenhill, AAVMC’s associate executive director for institutional research and diversity.

Greenhill also noted that veterinary school applications have in the past followed a strong cyclical pattern — peaking every 16 to 19 years — and that applicant numbers now appear poised to fall. As a result, she said, the applicant-to-seat ratio could fall below 1 to 1 within the next five years, meaning seats would go unfilled.

Yes, the outlook really is that bleak.  Anyone considering a career in veterinary medicine needs to know the reality of the situation. Unless things change soon, you are going to be spending more money on your education than you'll be able to recoup.  A great desire to be a vet is not enough.  Just because you really, really want to do something doesn't mean that it's a good idea to actually go through with it.  I recently hosted a veterinary student for an externship, and she will graduate with over $300,000 in student loan debt, with the prospect of making about $60,000 per year at graduation.  That's a 5:1 debt ratio, far greater than the typically recommended 2:1 ratio.  And it means that she's going to struggle to simply make ends meet with her monthly loan repayment.

This is not really news, as this trend has been happening for several years now.  I've been writing about it for at least three years, and each study only supports the previous data, making a veterinary career even less financially appealing.  Anyone in practice knows the reality of this situation.  However, those in academia seem oblivious to it, to the point of opening new vet schools despite strong data that there is a national oversupply of vets, a lowering demand, and growing difficulty in new graduates getting job offers.

What really frustrates me is that there are more studies being done and more analysis of the situation.  There are proposals thrown around and each subsequent study only strengthens the position that we are graduating too many vets at too high of a debt load for it to be sustainable.  Despite this data, I have yet to see anyone actually doing anything to solve the problem.  There is a lot of talk and a lot of debate, including some solutions, but nothing actually gets accomplished and the problem doesn't get fixed.

Those of us in practice can't change the reality of the economics of private practice.  We can't suddenly raise prices or cause more clients to magically flow through our doors.  I feel that the onus of the problem lies on the AVMA, veterinary colleges, and college presidents to lower educational costs, stop opening new schools, and lower class sizes.  By increasing the number of new graduates at higher debt than ever before, they are setting up their students for struggles and failures, without giving them proper warning about the harsh financial realities of life.