“Most DVM’s are making between one and a half to two hundred.”

As in $150,000 to $200,000.

This was in response to a DVM who called into the Dave Ramsey show, looking for advice regarding her student loans that are currently sitting at over $400,000. If you’re at all familiar with Dave Ramsey, you can pretty much guess that his response was going to be along the lines of needing to pay that debt off ASAP. In this case, he highly urged her to work on doubling her income in the next 3-5 years in order to do so. 

There was a lot going on during this radio call. Obviously, there is the issue of an incorrect statistic regarding how much veterinarians make (more on this later). This also digs deep into the state of veterinary medicine and other professions that are grappling with student loan debt and the big impact it’s making in their lives many, many years post-graduation. This underscores an issue that will only continue to spiral out of control if left unchecked. 

I’ve already expressed my thoughts about Dave Ramsey here, but I wanted to take a moment and really unpack what went on during this brief exchange between him and this DVM caller. Here’s what he got wrong, and right, about veterinary medicine:

LET’S TALK ABOUT PAY

First of all, let’s make something very clear. Most veterinarians do not make $150,000-$200,000.

Dave Ramsey repeatedly pointed out that the vets he knows are easily making low six-figures.

The disconnect is that just because HE knows vets who make more than the caller does not mean that this is representative of the ENTIRE profession.

So here are the numbers.  According to this BLS (Bureau of Labor Statistics) report, the median wage for a veterinarian is $93,830. Median. So this caller was earning below this median, which shouldn’t be surprising given that by definition, you need numbers below AND above the median number in order to arrive at the median number.

Why are Dave’s numbers skewed? Because the vets that he knows happen to be practice owners. Although there aren’t any BLS-type reports for how much veterinary practice owners make, one of the perks of being a practice owner over being an associate is that you have a higher earning potential as a result of being a business owner. Comparing her current pay to what practice owners are making is not a fair comparison. This misinformation needs to stop.

SOCIETAL EXPECTATIONS

There are many people who are surprised that veterinarians aren’t earning more money. Especially those who have had to pay for larger than expected veterinary-related expenses.

Veterinarians, in particular, are often reminded of their lower income in relation to other professionals with comparable education. And, unlike other professionals, they are constantly lambasted by the general public for what they charge for their services. “Well, if you really loved animals, you would never charge that much!” is a common phrase that people aren’t afraid to express when they encounter a vet bill. Dave Ramsey himself has not spoken very kindly about the price of veterinary care in the past.

Somehow, veterinary work has been equated with charity work. There is this expectation that because veterinarians have dedicated their lives to animals, they should not be compensated accordingly for their expertise. 

When a veterinarian hears, for the umpteeth time, that they are charging too much for their services, it cuts deep. It’s a direct attack on the value that they’re providing to their pet patients and their clients. Veterinarians and veterinary staff did not enter this field in hopes of it being a lucrative career. They just want to make a decent living doing what they love. If their focus was to make a lot of money, there were plenty of other career options that they could have easily chosen. 

People need to understand that providing veterinary services is just like any other service industry. Veterinary medicine continues to evolve as new diagnostics and treatments become available in order to practice good medicine. This evolution does come with a higher price tag.

Owning pets is a choice that requires an understanding that pet owners have financial responsibilities. Prices are set so that practice owners can give their employees a decent wage, keep the lights on, and have some profit left over to invest more in the business and pay themselves. There is no behemoth insurance middleman that masks the true costs of care. 

Veterinarians are well aware that finances are a limited resource for their clients, and veterinarians and their staff continue to do their best to financially accommodate their clients.

INCREASING INCOME

Dave Ramsey is correct in mentioning that if debt payoff is a goal, then you must absolutely look into increasing income. There is a floor as to how much you can cut from your budget before you simply cannot cut anymore. However, when looking at the income side of the equation, there is no set ceiling.

Now, can she easily double her income in the next 3-5 years? This is dependent on SO many different factors, such as time, motivation, and opportunities. In addition to focusing on her main job as an associate veterinarian, she could also explore other income streams besides her primary job. Her husband can definitely get on board and figure out how he can earn more income as well.

Putting yourself on a path to earning more requires intentionality and purpose.  Just wishing you could make more does nothing. There needs to be action paired with desire. 

However, please note that she was on maternity leave this past year. I’m going to take a wild guess and say that with a newborn in the house, she has a LOT on her plate right now. If she happens to have more than one child, well….let’s just say that adds some additional layers of responsibility! 

Maternity leave policies in this country make it downright difficult for new parents, especially mothers, to really focus on their careers. This is an issue that needs to be addressed on a societal level in order for this country to thrive. When you place the burden on the shoulders of working parents who are desperately seeking support systems that promote work-life balance, then you’re missing a BIG piece of the puzzle here. 

It’s also important to remember that income alone does not fix the problem. There are plenty of high-earners who are living paycheck to paycheck or going into debt. It comes down to understanding your cash flow and learning how to properly manage your money. In other words, it’s about going back to the basics.

THINK TWICE BEFORE PURSUING THAT PROFESSIONAL DEGREE

Dave Ramsey has a word of caution after the end of this call. He warns young people to take note of what this caller is going through and to not repeat the same mistakes.

He’s not alone. According to the 2018 Merck Veterinary Wellbeing Study, only 41% of veterinarians would recommend their  own profession. This number plummets to 24% among veterinarians less than 35 years of age. If you look at the factors that affect veterinary wellbeing, low income and high debt were top reasons why veterinary wellbeing scores were lower compared to the general population. 

Student loan debt has now eclipsed all other types of non-mortgage debt at $1.6 trillion. It is MUCH too easy for young people to qualify for loans that will be difficult, if not impossible to pay back in their lifetimes. And these loans are primarily federal loans. There is no incentive for schools to reign in their tuition prices when students can easily qualify for tens and hundreds of thousands of dollars worth of loans. This is how you end up with an average debt burden of $183,014 for the Class of 2018.

This nearly effortless access to federal loans with high interest rates, plus skyrocketing tuition prices and cost of attendance (projected $168,000-$370,000+ for 4 years of vet school) , makes for a truly vicious cycle that seems to have no end. 

Offering forgiveness is not a long-term solution- it is simply a weak band-aid to a much larger issue. If education were more affordable, then there would be no reason for forgiveness programs to exist, and the ensuing angst and stress could be erased for good. What exactly are the schools and the government doing in order to lower educational costs across the board? Until there is a solution, we’re going to have to keep relying on band-aids as poor substitutes.

THINK ABOUT YOUR RETURN ON INVESTMENT

The return on investment of a degree is seriously coming into question. Gone are the days where a summer job was enough to cover your school’s tuition. We have entered a completely different era. At what cost is it even worth it to pursue any sort of degree, veterinary or not, if your future paychecks will need a separate line item for “student loan payments” for the first 20-25 years of your career? 

Dave Ramsey was correct in saying that going to a more expensive school did not result in a higher pay. This is true in the world of veterinary medicine- there has been no correlation between going to a more expensive school and earning more money as a veterinarian. 

However, in her case, he should not have made an assumption that she went to a more expensive school “for the experience.” Presumably, he meant that she chose this school because of its location and that it sounded like it would be all fun and games while attending veterinary school for 4 years.

Setting aside the fact that veterinary school has a pretty grueling schedule that doesn’t allow for a ton of free time to enjoy your surroundings, in an ideal world, you would only apply to schools that were “affordable.” It was already discussed how affordable programs no longer exist.

Also keep in mind that there are few accredited veterinary programs (only 30 in the US at the time of this writing). Applicants are applying to multiple schools in order to increase their chances of getting accepted. If they happen to get accepted to a school with higher tuition (non-US schools fall under this category), you can imagine that deciding whether or not to forgo this once in a lifetime opportunity is not an easy decision. They may NEVER get this chance again to pursue their dream career. 

When you get that acceptance letter, AND you’ve been given the green light to take on mortgage-sized debt years before you’re even qualified to take out a real mortgage and truly understand the consequences of taking on that much debt…it’s pretty easy to see how so many people find themselves in six-figure educational debt. 

Of course, there is personal responsibility at play here. She could have decided, in the end, that this was too much of a financial burden and walked away. But let’s not forget that this is a complex, multifactorial issue that not only involves personal responsibility, but institutional responsibility and societal responsibility as well.

TRADEOFFS

There are tradeoffs and opportunity costs when it comes to paying off debt. 

Whatever is going towards your debt is NOT being used for other purposes. The more that goes towards your debt means that there is less cash flow for anything and everything else that requires money.

So it’s up to the individual- what are the tradeoffs that I’m willing to make when I pay off debt?

Do I live on rice and beans for the next 10 years, feeling constantly deprived in order to pay off my debt?

Do I focus on making more money by putting in more time at work? Spending more time at work= spending less time everywhere else.

Everyone needs to think about their priorities and where they want to focus their time, energy, and money. This is going to look different for each individual. Debt freedom is a fantastic goal that I encourage everyone pursue. But we cannot gloss over the price that you have to pay in order to get there.

“THERE IS NO FORGIVENESS TAX BILL.” 

Dave Ramsey is not a big fan of government loan forgiveness. In fact, he tells everyone to assume that forgiveness simply isn’t going to happen.

Well, it turns out the government HAS forgiven loans through the PSLF (public service loan forgiveness) program, which happens to be tax-free forgiveness. And yes, the number of loans forgiven has been absolutely miniscule and laughable at this point. However, when you dive deeper into WHY this has been the case, then it will make more sense.

Now, it’s completely understandable that many people are very wary of trusting that the loans will be forgiven. The particular plan that she’s on (IBR) has yet to forgive any loans because no one has reached the end of the loan repayment term (25 years). Since this program started in 2009, the first round of forgiveness for those on IBR should start happening in 2034. This is still a LONG way off from the time of this writing.

But to entirely dismiss that these loans will ever be forgiven? Why completely take that off the table without understanding the issue more deeply? I am in complete agreement that forgiveness is far from the ideal situation and in a perfect world, it wouldn’t even exist. But this doesn’t mean that it’s a good idea to outright assume that it will never happen and eliminate this as a viable option. Doing so, especially for those that have high enough debt to income ratios that they cannot mathematically pay off their debt in a reasonable amount of time, severely limits their choices. 

You can still go for forgiveness AND be gazelle intense with the rest of your finances. This doesn’t have to be a black or white issue.

MORE BALANCED ADVICE

My heart really went out to this caller. She had reached out for help, but likely left the call feeling even more stressed and overwhelmed.

Dave Ramsey had made it clear what he would do in her situation. Here is some advice that provides a bit more balance:

  1. Forgive yourself: You were young. Easy access to massive student loans and a culture of “everyone else is doing it” made it nearly impossible to resist the chance to pursue your passion of becoming a veterinarian. So show some compassion to that younger version of you. Tune out others who want to victim-shame you. Forgiving yourself allows you to move forward.
  2. Figure out a loan repayment strategy: This is one of the top stressors for veterinarians, as the entire situation can get complicated in a hurry. Having a solid, concrete plan will provide you peace of mind. If your numbers are truly showing that you cannot afford to pay off this debt in full, then please explore your other options. There are student loan consultants who are a WEALTH of knowledge when it comes to student loans and repayment strategies. They deal with these issues on a daily basis and keep themselves informed on the latest news. It’s a complex topic that deserves more than blanket statements that completely disregard some viable options. You can find more information here.
  3. Figure out the rest of your finances: Addressing your student loans isn’t enough. This is just one part of your entire financial picture. In order to have true financial health and well-being, you need to look at your finances as a whole. Do you have other types of debt? Do you have an adequate emergency fund? Are you budgeting and watching your expenses? Are you properly insured? Are you saving for retirement? Are you and your husband on the same page when it comes to your finances? Are you looking into ways to increase income? Starting with your budget and figuring out your net worth are some ways that you can start organizing and making sense of your finances.
  4. Find your people: In order to sustain financial health, you need to be around others who think and act in financially healthy ways. Financial health and wellbeing depends on having the right financial habits and behaviors. It’s a lot easier to do this with other people than going solo. Be on the lookout for those that can help encourage and lift you up throughout your journey, both in real life and virtually.
  5. Find a financial professional to help you out: This is not a “must-do” at this point in time, but it’s an option in case you need individualized help. Please be aware that the vast majority of financial advisors and planners are not aware of how student loan repayment plans work. Many are taken aback when you mention six-figure student loan debt. It’s very important that you find a financial professional that is fully aware of the different challenges that crop up when developing a financial plan for someone that has six-figure loans. Do your homework and find someone that is experienced helping people in your position.

CONCLUSION

Yes, this can be overwhelming. This is why the vast majority of people decide that they’d rather do anything BUT deal with their money because they don’t even know where to start. Or they’re given advice that doesn’t resonate and inspire them to make change. They have lost hope that the situation can be improved, so they continue the patterns and habits that do not promote financial health and wellbeing.

But if you’re wanting to make some real change, you are 100% capable of doing so. There are people who are changing their lives for the better every single day, one step at a time when it comes to their finances. Be open-minded and have hope. You WILL be able to tackle this debt and still live a life that is not defined by your student debt.

What are your thoughts about student loans and forgiveness? What do you propose as a solution? Comment below!

11 Comments

  1. Dan Routh on February 12, 2020 at 10:47 am

    Great article Dr. Kim, couldn’t say it any better.

    • RLDVM on February 12, 2020 at 10:13 pm

      Thanks!

  2. The Vetducator on February 12, 2020 at 11:43 am

    Great perspective to add, and a much more supportive one than Dave had. I love the White Coat Investor’s saying, “You can have ANYthing you want but you can’t have EVERYthing you want.” Private vet school, working in a rural area, having a family, paying off debt, and buying a house? Probably not. Going to your state school, working ER, paying off debt, and putting off having a family and buying a house. Probably. I wish more students would think twice about the life-long consequences of going to vet school. http://vetducator.com/words-of-caution-for-the-aspiring-vet-student/

    • RLDVM on February 12, 2020 at 10:22 pm

      It’s so hard to understand debt when it’s essentially Monopoly money. The lack of financial literacy and education certainly doesn’t help the situation. It’s so unfortunate that whenever I come across an aspiring veterinarian, I bring up these financial realities. They may not like to hear it, but it needs to be said.

  3. Steveark on February 12, 2020 at 3:26 pm

    While I don’t have a dog in this fight (I couldn’t help myself there) I think you misstated how vet prices are set. All prices are set by supply and demand, they have nothing to do with the cost of running the business. If the market won’t support the prices you need you go broke, if it does you get rich. Or somewhere in between. There is no right or wrong, no fair or unfair. The market has no feelings. If you pick a career or business that pays poorly its on you, if it pays well, then congrats. If you are a vet it’s not bad pay but not great either. Great information, I would have thought Dave was right until you explained it with data.

    • RLDVM on February 12, 2020 at 10:33 pm

      Nice pun!!

      And yes- you’re correct in that supply and demand are foundational to how prices are set. These services wouldn’t exist if there were no demand for them.

      I’m glad that this post cleared up some misconceptions. He has such a huge and impactful platform- hopefully he’ll become aware of this data at some point and share this with his audience. However, I’m pretty sure that regardless, he would still have the same advice for callers with massive student loan debt!

    • AlanaDVM on February 14, 2020 at 12:56 am

      Ok… Well, thanks for the opinion. The only reason things have managed to stay artificially low is that there are people who had a reasonable amount of debt that haven’t retired yet or they have well paid spouses/parents.

      The reality is if we don’t get the price of school under control a lot of the public is going to be very surprised. New Veterinarians can not afford to be philanthropists, we can hardly afford to be self sufficient single adults. We shouldn’t have to not have families and take second jobs because you can’t afford to care for your pets… Pet’s are a choice too.

      That mutt that you paid 2k for, or your 12th rescue cat, is going to cost you much more to care for and that should not the vet’s problem, that is the owner’s problem. We did not get into this career to get rich, but just because we love animals and do our absolute best to make sure that they get the best care possible, doesn’t mean that we don’t deserve to have a reasonable income and a healthy life balance.

  4. Amiyama on February 21, 2020 at 4:52 am

    This was a very informative read! I’m still a vet student but I’m trying to educate myself in finances as much as possible and have always wondered what does Dave Ramsey think about vet medicine when I see more videos of him answering med school related questions.

    • RLDVM on February 21, 2020 at 9:22 pm

      So glad that you’re taking the initiative to educate yourself early! Keep it up- you are doing your future self a HUGE favor! Best of luck as you continue with your studies!

  5. Heather on March 1, 2020 at 10:23 pm

    Thank you so much for this article!!

    • RLDVM on March 2, 2020 at 9:20 pm

      Of course! Glad you liked it!

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