I remember when I graduated from veterinary school I was talking to a doctor that I had worked for during high school – lamenting about my student loan debt.  My debt load was almost twice what his had been and current grads have a debt load about twice what mine was.

I wonder how often the debt load is going to double like that, what kind of salary increases are going to be needed to support each group of new students, and how close we are to a true debt crisis (i.e. new graduates can’t afford to live on the salary that the practice owners can afford to pay – they’ll have to resort to buying used lawn mowers).  At what point might we see a complete disconnect and inability to move forward??  Hopefully never, but we really need to be mindful of the situation.

Statistics from the UC Davis website have the average debt load in 1994 as about $28K, 2001 at about $58K, and 2008 at $102K.  In 14 years, the debt load has risen dramatically.  Will it continue to double every 6-10 years?

When I was a senior veterinary student one of the residents asked me if I was planning to become a practice owner or ever buy a house.  I answered, “Yes,” to both questions and he laughed.  He explained that my student loan was going to be as much as a mortgage and that I likely wouldn’t be able to do either until I was doing well enough financially to afford a second mortgage.

Luckily, I’ve been able to become a practice owner and manage a home mortgage, but there were a few years where my salary wasn’t keeping up and I had to put my loans on deferral.  By doing this, I racked up interest and my loan balances certainly weren’t going down!

Some intense questions I ponder: What if the debt load really does exceed what practice owners are able to pay their associates?  What if in these difficult economic times the public can’t pay what the practice needs to support owner and associates? What will happen to the owner’s quality of life if she has to work 6 days a week from open to close because she can’t afford associates? What will happen to the associate’s quality of life if he is working 6 days a week from open to close and can’t afford to buy a house or a car or to have children?

Some good thoughts: In general, the veterinary profession is considered stable and veterinarians are looked upon as unlikely to default on loans and the average $1,000/month a veterinarian pays towards student loans is a fraction of the total cash flow for a veterinary hospital. Think about that the next time you have a client ask you ‘Why do cats spray?’

For now, it seems that practices, wages, salaries, and the public have been able to keep pace with each other. The good news is that we are aware of the debt problem and that there are plenty of resources and information out there regarding money management for current college students – how to minimize their debt, borrow less, manage veterinary hospitals and more.  If we all keep on top of the problem, I’m hopeful that we won’t reach a breaking point.