The debt-to-earnings ratio for 2021 full-time U.S. veterinary graduates is 1.67:1, down from 2.09:1 last year and the lowest since 2008.
Compared to last year, more graduates had a DIR between 0.01:1 and 1.99:1 — which is considered a safe ratio — and there was a jump from $90,722 to $99,593 in the 2020 median weighted starting salary for veterinary science graduates full-time employment. Both factors contributed to the overall decrease in DIR, said Bridgette Bain, PhD, associate director of analytics at the AVMA.
Based on data from the AVMA Senior Survey 2021, Dr. Bain at the annual AVMA Veterinary Business and Economic Forum held virtually October 14-16 on “Supply and Demand in the Veterinary Education Market”.
The DIR peaked in 2018 at 2.26:1. In that year, the average debt of all 2021 US veterinary college graduates, including those with no debt, was $147,394 in 2020 dollars. And 18% of veterinary science graduates had no debt — up from 19% in 2020.
Meanwhile, according to Dr. Bain, the average starting salary came closest to reaching the pre-Great Recession trendline in late 2007 through mid-2009. From 2010 to 2014, starting salaries fell after adjusting for inflation. In 2020, starting salaries were around $65,000 in 2001 and increased to around $80,000 in 2010.
“This is a market correction that is 12 years overdue. We haven’t returned to pre-recession trends, but we’re close,” said Dr. Bain, adding that inflation-adjusted debt is growing 3.5% each year, while inflation-adjusted salaries are growing 1.9% each year.
dr Bain encouraged employers to consider personalizing compensation to attract new graduates, whether through relocation bonuses, more time off, or higher signing bonuses. She also recommended communication between institutions, including veterinary colleges, to identify successful debt management strategies.
Looking at data for 15,815 new graduates from 2017-21, 49% joined a pet practice, while a third completed internships, residencies, or some other type of continuing education. dr Bain drew attention to the link between the strength of the economy and the field that recent graduates are choosing by comparing 2013 – not long after the Great Recession – to 2021.
Eight years ago, 37% of graduates went into pet practice, while 38% went on to further education. At that point, only 80% of graduates reported receiving an offer for a full-time position or further education. In the meantime, this year 53% of the graduates went into pet practice and 25% into further training; 96% of graduates had received at least one offer for a full-time position or further education.
dr Bain found that college graduates with higher levels of debt appear to be seeking higher-income jobs. At the same time, corporate-owned or consolidator-owned practices pay new hires more on average than independent private practices and award higher signing bonuses and relocation allowances.
Between 2020 and 2021, the proportion of new graduates who were hired by corporate practices increased from 35% to 39% among 2021 veterinary medicine graduates who secured full-time employment in clinical practice, while the percentage of those going into independent Private practices declined, correspondingly, by 65%. to 61%.
In 2021, the average starting salary was $106,053 for recent graduates entering corporate practice and $93,894 for those entering independent private practice. The average educational debt for those who entered corporate practice was $165,569 compared to $152,941 for those who entered independent private practice.
Additionally, 66% of corporate offers included an average sign-on bonus of $11,738, while only 31% of recent graduates entering independent private practice were offered an average sign-on bonus of $6,596. Additionally, 41% of corporate practices offered a moving fee averaging $4,879; 18% of independent private practices did, and the median offering was $3,207.
Over the past two decades, veterinary graduate tuition has increased by an average of 5.5% per year, but there are large disparities in the average annual increase across veterinary schools.
The lowest debt growth from 2001-21 was a 0.4% annual average at the University of California-Davis. Total UC-Davis veterinary graduate tuition in 2021 was $132,100 for out-of-state students and $181,080 for out-of-state students. Tuskegee University had the highest debt growth from 2001-21 with an annual average of 9.7%. Total Tuskegee Veterinary Graduate Tuition in 2021 was $187,129 for both local and international students.
Disparities in the debts accrued and the manner in which those debts are paid also varied by race and ethnicity. Recent grads who are black have accumulated the highest debt, averaging $249,000 in 2020 and $229,000 in 2021. They were followed by Hispanic or Latino graduates with $196,000 in 2020 and $185,000 in 2021. New graduates who are white averaged $151,000 in debt in 2020 and $153,000 in 2021. Asian graduates in 2020 averaged the same debt as white graduates, but that number dropped to $132,000 in 2021.
At the same time, Black graduates in 2021 reported receiving an average of 11% of financial support for tuition, fees, and living expenses from family, versus 40% for Asian graduates, 26% for White graduates, and 24% for Hispanic or Latino graduates. Black graduates covered 68% of their tuition, fees, and living expenses with educational loans, compared to 62% of Hispanic or Latino graduates, 57% of White graduates, and 46% of Asian graduates.
Overall, 18% of veterinary graduates this year have 76% to 100% of their tuition, fees and living expenses covered by family, which according to Dr. Bain correlated with those who had no debt, while 43% had no family support. Many of these individuals were likely among the 48% who said they covered 76% to 100% of their expenses with education loans. Notably, 58% of recent graduates said they do not use personal savings to cover costs, and 43% of recent graduates reported that scholarships do not cover costs.
Finally, Dr. Bain suggested a link between the number of animals veterinary students own and their education debt. For every additional pet a vet student owns, the debt increases by $7,500.