Veterinarians are some of the most highly trained professionals out there. If you think being a physician is tough, try learning and practicing medicine on a bunch of different anatomies. All this with more limited funding, resources and technology.
These hard-working, intelligent people have a tough go if they want to become a Doctor of Veterinary Medicine (D.V.M.).
First of all, there are only 30 vet schools in the U.S., so it’s intensely competitive to get in. Those accepted are in for a grueling four-year education, which isn’t cheap due to the complexity of veterinary medicine.
Finally, once they become a D.V.M., the veterinarian salary isn’t quite where it should be given their training. As an outsider, I would think D.V.M.s would make a better income than they do. Here’s the problem: People love their pets,but they’re often unable to spend unlimited funds on their loving animal like they would on themselves if they had a health issue.
The median veterinarian salary is $90,420, according to the Bureau of Labor Statistics. And the average veterinarian who graduated with student loans in 2016 owed $167,534, according to the American Veterinary Medicine Association (AVMA). We’ve seen even higher average veterinarian student loan debt here at Student Loan Planner. That’s a lot, especially considering the median veterinarian salary for the top 10% of earners is $159,320.
Even the top earners are making less money than the amount owed by the average graduate.
Veterinarians graduate with more student loans than anticipated
It takes about four years to get a D.V.M. after completing a four-year bachelor’s program.
But higher living expenses (Ohio State estimates $93,000 over the life of school), tuition increases each year, interest accruing on the loans and leftover loans from undergrad pushes the cost of becoming a D.V.M. well above what’s anticipated.
We’ve worked with over 250 veterinarians here at Student Loan Planner with an average of $273,000 in student debt.
So is it financially worth it?
How much do veterinarians make?
The average veterinarian salary is about $90,000 per year. But how does that compare to the average college graduate without an advanced degree?
According to the Bureau of Labor Statistics in a 2018 report, the median wage for a college graduate is about $66,000. Here’s a graphical summary from The Balance Careers if you want more info.
So becoming a veterinarian leads to an extra $24,000 in earnings per year by the averages.
Let’s assume that $24,000 in extra income sustains throughout the entire 30 year career of an D.V.M. That works out to an extra $720,000 in lifetime earnings for a veterinarian compared to someone with a bachelor’s degree. That seems like a big number.
Taking out $273,000 in loans to make an extra $720,000 tends to make financial sense on the surface. But remember, those extra earnings will be taxed.
If we assume a combined 40% tax rate for federal and state, then we can reduce that $720,000 in earnings down to about $432,000 in extra take-home pay.
So now we’re talking about a veterinarian having an extra $432,000 to pay off the $273,000 of student loan debt that made it possible for the higher veterinarian salary.
Seems good on the surface, but those numbers are missing a few key facets:
- These numbers don’t show that many veterinarians spend the first 20 to 25 years of their careers saddled with loan payments, staring at student loan balances that don’t seem to change and, in many cases, continue to grow.
- The other piece of the equation is that the cost of paying back the loans will be higher than the actual loan balance.
- The loan forgiveness options for veterinarians are extremely limited. Sure, the American Veterinary Medical Association has many options listed. But they aren’t that easy to get. I’ve worked with only a couple of vets who work for the Department of Agriculture and would qualify for Public Service Loan Forgiveness (PSLF).
Let’s dive deeper into what repayment actually looks like for veterinarians.
D.V.M. student loan repayment options
Our experience at Student Loan Planner shows there are two optimal ways for veterinarians to pay off student loans. But they’re on opposite ends of the spectrum.
- Aggressive Pay Back: For people who owe 1.5 times their income or less (e.g., someone who makes $100,000 with loans at $150,000 or less), their best bet is to throw every dollar they can find into paying back their loans as fast as possible for no more than 10 years.
- Pay the least amount possible: For people who owe more than twice their income (e.g., someone who makes $100,000 and owes $200,000 or more), the goal is to get on an income-driven repayment plan that will keep their payments low and then maximize loan forgiveness, whether it’s PSLF or taxable loan forgiveness. PSLF options are limited for most veterinarians.
Loan repayment for veterinarians
Let’s say Rachel has $225,000 in student loans at 6.8%. Her veterinarian starting salary is $75,000 and will grow about 3% per year. She’s not married.
So let’s compare Income-Based Repayment (IBR), Pay As You Earn (PAYE), and refinancing to a 10-year fixed rate.
Remember how either aggressively attacking the loans (refinancing) or keeping payments as low as possible and maximizing loan forgiveness (PAYE) would save money? IBR is neither of those.
As you can see, IBR is by far the worst option. It’s going to end up costing Rachel over $120,000 more than PAYE and nearly $114,000 more than refinancing.
As for PAYE versus refinancing, the options look relatively close from an out-of-pocket cost. Here are the pros and cons for each option:
- Pro: Affordable monthly payments which will allow her to save, invest and put money toward other financial goals.
- Pro: Has 20 years to save up for the taxes owed.
- Con: Loan balance will grow from $225,000 to $372,000.
- Con: It’ll take her 10 years longer compared to refinancing.
- Pro: She’ll be out of debt in 10 years or less.
- Con: Total out-of-pocket cost is about $8,000 higher and paid back in half the time.
- Con: Once she refinances, the federal loan program benefits are gone for good.
- Con: Stuck with $2,442 monthly payments for 10 years with little to no flexibility.
Looks like PAYE is going to be her best option.
Is vet school worth it?
The purely financial answer is yes — but barely. The projected lifetime earnings of a veterinarian compared to the average college grad is $432,000 after taxes versus the $292,000 in cost of paying back student loans.
To me, that margin is way too close.
The spread between a veterinarian salary and the average college graduate just isn’t all that compelling. Not to mention they start earning a living four years later due to vet school.
Then there’s the psychology between making student loan payments for 20 to 25 years without making a significantly higher salary versus the average college grad.
Someone looking to pursue a veterinary career must have a true passion for it because making student loan payments will also be a way of life. It might get especially tight if the extra costs of getting married and raising kids comes around.
If veterinarians can keep that long-term perspective and still feel compelled to become a D.V.M., they’ll have a nice, long career with great earnings remaining after being student debt-free.
Veterinarians-to-be should only choose to pursue this path if they’re all in and won’t let student loans make them regret their decision after projecting what life will look like 10 and 20 years after graduation.
Having a clear understanding of how loan repayment works and how to mitigate both the financial and psychological aspects of carrying that amount of debt are both a must.
Veterinarians need a plan for student loan repayment
For veterinarians who have six-figure student loans, having the debt doesn’t have to feel like a heavy weight. There are plenty of great student loan repayment options for veterinarians.
It’s critical to have a path that could not only save significant money but also a clear understanding of the actions steps to get it done.
Student Loan Planner has done over 2,000 student loan consults for clients with over $500 million of student loans. We can help you figure out the optimal path in just one hour.
I work with borrowers who owe between $200,000 to $400,000 in student loans. That makes me the point person for most of our veterinarian student loan consults. Feel free to email me at email@example.com to ask any questions and learn more.