The Student Debt Situation

An unsustainable future for equine practitioners

If you have worked with me, you already know that one of my favorite sayings is, “Our best thinking got us here.” That is certainly the case with the veterinary student debt situation. We need some new thinking regarding what generates student debt and what hampers the ability of students to pay back the debt.

In the course of my management consulting business, I am fortunate to work at the intersection between veterinarians, veterinary practices, veterinary colleges, veterinary students and businesses that provide services and products to the veterinary profession. One of the most common and sincere concerns expressed by people in all of the groups is the impact of student debt on the profession. The student debt situation is a circular process involving veterinary students, veterinary colleges, the AVMA, lenders and veterinary practices (employers).

I don’t have a solution to the problem, but I have some observations and ideas that could be woven into the fabric of a different strategy for financing veterinary education. Although it may happen, my intent is not to offend everyone in the entire veterinary profession with one column, but rather to stimulate creativity and innovation.

Veterinary Pay and Benefits

Because the most common theme in discussions involving student debt is “Veterinary jobs should pay more,” I will enter the circle at the veterinary practice (employers’) point.
The assumption seems to be that every veterinary business is profitable enough to pay whatever is necessary to cover student loans. When graduate veterinarians enter the workforce, a majority are employed by small businesses.

No amount of marketing, posturing, denial or wishful thinking will change the fact that small businesses success or failure is driven by supply and demand. From my position in the industry, in the economy in which we all work, the demand for veterinary services appears smaller than the supply of veterinarians. I routinely look at the financial statements of over 50 veterinary practices—equine, mixed and companion animal. Those financial statements demonstrate that practices do not generate enough profit to pay veterinarians sufficiently to repay student loans under the repayment terms commonly available.

That is a remarkably bad situation since the successful transfer of the veterinary profession from one generation to another is dependent upon the next generation being solvent and content. Many practices are changing management practices to become profitable. That will help when practices generate enough earnings to add higher veterinary compensation to the cost structure of the business and remain solvent. Clearly compensation is not a realistic short-term “fix” until supply and demand for veterinary services shifts back to favor the veterinarian.


As I look at the terms of student debt, the feature that I find odd is the relatively short term of most of the loans. Some of the federal programs discuss a 30-year payoff but I have never met anyone using that option. The reality of the situation is that students are buying a career from a veterinary college and borrowing the money for the purchase from either a government or private lender.

When we purchase a home, an asset with a long life span, a 15-year mortgage is possible to pay off but most loans are for 25 to 30 years in order for family cash flow to service the debt. A veterinary career often has a longer useful lifespan than most of us live in a home. Perhaps we should consider a longer “mortgage” on a veterinary degree so that the cash flow demands of debt service are less onerous.

Of course, I understand that longer terms mean more interest. I am using the same rationale as purchasing a home. If you pay cash or pay the home off in five years, there isn’t much interest. Most people can’t pay cash for a home and it is common practice to finance the purchase over a long period of time. Lenders are rightfully concerned about security when they loan anyone money, including students. Bankruptcy filings on student loans used to be a big loss for lenders. However, under the new regulations, student loans cannot be discharged by bankruptcy so there is significantly less risk now.

Veterinary Colleges

When the dust all settles, veterinary colleges are in the business of selling veterinary medical degrees to students who buy a degree with the intention of using it to make a living. In the age of austerity, veterinary colleges have faced massive budget cuts. One response has been to increase class size, generating tuition revenue for the school. In effect, the colleges are generating more customers for their product and increasing the supply of veterinarians.

From my perspective and experience, the veterinary profession is upside down as far as supply and demand goes. We have inadequate demand for veterinary services to support the number of veterinarians in practice. Increasing class size diminishes the earning potential and therefore the value of a veterinary medical degree, and yet the cost of the degree continues to escalate.

That strategy only works for schools because student loans are easy to acquire and young consumers following their life’s dream are still willing to borrow the money to purchase the degree at an ever higher price with challenging loan terms. The result of this paradigm is that the cost of the veterinary degree goes up, while the value of a veterinary degree goes down and students continue to purchase degrees on borrowed money.

AVMA Accreditation

It is difficult for me, as someone working in the “business trenches” of veterinary medicine, to understand the timing of the AVMA’s decision to accredit more schools. This clearly increases supply of veterinarians in the face of decreasing demand for veterinary services, thereby reducing the value of a veterinary degree and the earning power of a veterinarian, both of which contribute to student debt management challenges.

Another component of accreditation that is an integral part of the challenge of rising student debt is the requirement to have a research program in order for a school to be accredited by the AVMA. The model that effective teaching of veterinary students requires faculty involved in a research programs has never been assessed to be of measurable benefit to student success in general or even specialty practice.

In general, assistant, associate and full professor ranked positions are allotted 50% FTE (Full Time Equivalent) in non-teaching functions which include research. Who is paying for that 50% of their time? Many veterinary schools have chosen to hire instructor-level individuals who are nearly 100% FTE in teaching to release higher-ranked faculty to do research. Why are these instructors who do no or very little research acceptable as educators, when the need for research to enhance education is the paradigm?

The world is changing and we need to have a fresh look at research program requirements for accrediting schools. It is impossible to understand how the cost of faculty in 50% FTE positions is not passed along to the student in the form of tuition fees, etc. That component of tuition is financed by student debt.
Research is a critical piece of veterinary medicine but it is not a critical piece of training general practitioners. Research is important but I don’t believe students should pay for the research via their tuition.


Although I am not in a position to resolve these challenges, I am in a position to share my observations and invite people in policy-making capacities to use some new thinking. After all, our best thinking got us here.

Andrew R Clark, DVM, MBA, runs an innovative virtual CEO program. He provide business coaching, solutions, strategies and development for equine veterinary businesses in 12 states and two Canadian provinces as well as clients in Europe, also facilitating two Veterinary Management Groups.

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