The Wagging Tail

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). 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.

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.

References & Important Links:

Veterinary Student Debt Statistics
Money Management Guide

I have two kids in college, one at a small private school and one at a large public school. The good news is that one of them is graduating this year. The bad news is that his sister is going to start college in the fall!

The age old question of college students is “How do I fund my education?” Those who are lucky enough to have their parents contribute money have less of a challenge than those who don’t but, unless enough money has been set aside to fully pay for a student’s college experience, students and parents alike need to find ways to raise the money. Savings, loans, grants and scholarships are among some of the options. Certainly, one option is to have the student work. However, with so many people out of work these days, finding work as a student seems like it might be an impossible task.

There is one job that any student, or parent for that matter, can take on and there is no limit to the number of positions available. What could that be? There are both full time and part time opportunities. Still don’t know? How about “Professional Financial Aid Applicant?” That’s right. Employ yourself as a part time or full time student aid application preparer. I will guarantee you that there is no job you can find out there in today’s economy that will pay you more per hour than filling out the forms and applying for financial aid. And, it is much simpler today than when I was in school back in the 70s. Today, you can get on your computer and go on line and fill out as many applications as you want by copying/pasting information into the forms. I had to request the forms by mail, or go copy them at the campus student center, and fill them out by hand, one after the other. Then mail them out and wait for a response.

Don’t think the money is out there? Think again! Even as some of the banks and financial institutions that were participating in student loan programs are going toes-up or exiting the business, many colleges are experiencing alumni and other entities stepping up their private grant activities. I checked my son’s college’s web page, went to “Financial Aid” and found a grant program initiated by an alumnus motivated by the poor economy to offer a no interest loan that would be forgiven when the student graduated. If they don’t graduate, the money would have to be paid back with interest. Now there’s an incentive to stay in school and graduate. My son qualified for $2,500. It took me less than an hour to check the web site and fill out the form. Even an old-school finance guy like me can do the math on that one. $2,500 divided by one hour… I’d say that’s pretty close, if not exactly, $2,500 per hour. I don’t think you’d get that much working at McDonald’s all summer.

The first place to start is completing the Free Application for Federal Student Aid (FAFSA). All universities require that you fill this form out when applying for financial aid. You can find this form on the web at www.fafsa.ed.gov. Now is the time to complete that form for the fall semester. The form can be sent to as many schools as you wish, and there is no charge. Then go to the web site of your preferred schools and see what they are offering themselves. And, just because you looked there once before and didn’t find a match, check in regularly because new grant, loan, and scholarship programs come along at all times of the year.

Additional Resources:
(VSS) http://www.collegescholarships.org/scholarships/vet.html
(FSA) http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp
(FAR for Grads) http://www.rspfunding.com/prod_booksgrad1.html
Student Gateway, US Gov.

http://www.students.gov/STUGOVWebApp/Public?topicID=7&operation=topic

Why is it when people decide to “lose weight and get healthy” they take on a kind of wanton fervor, like those contestants on popular reality shows? The premise of many reality-based shows is rooted in the saying, “He who gets there fast-eth, win-eth”. Take The Amazing Race. I’m not exactly a huge fan of the show, but I’ve seen bits and pieces, so I get the gist. People tune in to watch teams intensely compete with one another, working ’round the clock to arrive first at a particular destination, so they can win the big prize which is a marriage proposal from someone they met three months ago. Wait a minute. I think I might be a little confused. No matter. The point is that imposing time constraints on these shows is paramount to viewablity, not to mention big, big business; after all, nobody wants to watch people strolling leisurely along the Tibetan marketplace, or watch a drawn-out relationship that develops at a natural and healthy progression, right? B.O.R.I.N.G! If you think about it, you probably face the same type of expectation from time to time with clients who assume you will just “cure” their Pet now and don’t consider ongoing management or treatment.

So what about The Biggest Loser? It is currently the eleventh most popular reality show on TV, and If there’s any reality show that can make a difference in the lives of its viewers, it should be this one, right? No big surprise, Americans are progressively becoming more out of shape. (In fact, the populace has grown 1% fatter since you started reading this blog! Not really, but I’m trying to make a point here.) Seriously, if there’s anything to be gained (excuse the pun) from watching a reality show, The Biggest Loser should be the reality show that earns a Golden Globe for it’s role in making a life-changing impact on it’s audience.

So here is my problem with the show:

While I love the fact that people on the show end-up losing weight and, I believe, keep it off, I have concerns about some of the underlying messages. Number one, when I tune into the first few episodes, I see morbidly obese people who haven’t exercised in years, moaning from the pain, struggling to achieve nearly impossible goals, like climbing some huge mountain with a 20 lb. backpack atop their bodies. Good for ratings? Inspiring to watch? Absolutely. Okay for the average overweight Joe or Jenny to attempt? Not so much. Exercising at this intensity is neither necessary nor recommended. Long term results come from small incremental changes that occur gradually, over time.

Imagine if you asked a client with an overweight pet to strap on a five pound weight and run them around the dog park every day. It would be absurd (not to mention dangerous). Instead, you prescribe a logical course of action, that is appropriate for the pet in your care.

The other problem I have with the show is the large amount of weight people lose each week. Losing twelve-pounds a week isn’t a realistic goal and, frankly, doesn’t happen in the real world, yet, no one on the show tells you that. In our profession, we can be “coaches” for our clients. After prescribing a plan for weight loss, we can check in with clients to monitor progress and adjust as necessary for the pet. This not only ensures better long-term success rates, but helps us see potential problems before they arise.

Now, I’m not saying don’t watch The Biggest Loser, I’m just saying, the show is more about drama and less about useful fitness info. Changing an attitude, a set of beliefs and behaviors takes time. It’s so not about getting there quickly because the fast approach never really works. No matter how entertaining it may be.

Building on last week’s theme of student debt, I wanted to give my perspective…

I graduated in 1997 from the Virginia-Maryland Regional College of Veterinary Medicine and brought out with me $68,000 in student loans to re-pay. I thought that was a lot — I hear the numbers now and it is staggering! However, I also only made a little over $30,000 upon graduation in a small animal, feline-exclusive, hospital. So the debt has doubled as has the new graduate salary, and the gap just gets bigger and bigger for our new colleagues.

I tell students all the time, “Please do not take any loans that you don’t absolutely have to have to live on and stay in school.” The payments can really impede your freedom to choose how you want to live your life. A time may come when you want to work part-time or less than five days a week; what you owe will dictate if that can be a reality for you or not.

Going back to my scenario, I owed $68,000 at 6% interest. Little if any of it was tax deductible. I paid just under $1,000 a month for 10 years! During those 10 years I wanted to buy a house, start a family, and live a little (you know grab a bite out every now and then, not travel the world) but I struggled to do all of that. Now everything costs more and our new graduates owe more. In a typical scenario, a reasonable home owner’s bills run about $3,000/mo. and a student loan payment is about $1,000/mo. Combined that’s $4,000 in monthly expenses! Today, many new grad salaries do not even begin to cover that (typical new grad take home is $2,000/month). You are already behind, and we haven’t even discussed buying groceries yet!

I believe students are being told that student debt is good debt and not to worry because of low interest rates. However, all debt has to be paid back in cold hard cash!

Control your own life and don’t be held hostage by your debt. Plan ahead! Be aware of how much you are borrowing. Explore your options and don’t bury your head in the sand. Borrow less if you can, and have a good action plan in place to pay off your loans so you’ll have the freedom to choose your future.