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Education debt weighs heavily on the mind of Dr. John Baker, dean of Michigan State's veterinary medical program. A stack of letters reflects the appreciation of students who received unexpected scholarships.

It was fall 2016, and Baker had dipped into Michigan State University College of Veterinary Medicine's unrestricted gift account to give scholarships to 132 out-of-state students who'd applied for financial aid. To offset the allocation and others like it, he'd trimmed spending. One small but notable cut included $15,000 in leased parking fees for college administrators. Baker redlined his own reserved space.

"It's not nearly enough," he said of the scholarships. "A year ago, we had 15 students graduate with over $300,000 in debt. The economic crisis, I think, is already here."

Since taking the helm of MSU's program in 2014, Baker's no-frills, egalitarian approach to running the veterinary college has inspired a variety of unconventional ideas for tackling what's widely considered to be some of the profession's most pervasive problems: student debt and the high cost of veterinary education. Four years of veterinary education at MSU is approximately $125,846 for residents and $238,031 for nonresidents, and that doesn't include living expenses or possible tuition increases.

The cost to attend MSU is at the high end of the spectrum but far from the priciest veterinary education option. Among the nation's 30 schools, tuition ranges from $100,000 to nearly $300,000 over four years. Midwestern University College of Veterinary Medicine tops the chart at nearly $240,000, as do overseas programs such as Ross University in the Caribbean. Owned by DeVry Education Group, the veterinary school on St. Kitts attracts Americans who pay $203,793 in tuition and an estimated $125,000 to live there.

That kind of price tag has many student-loan borrowers entering the veterinary workforce owing roughly twice their annual starting salaries. American Veterinary Medical Association economists estimate that the 2,930 graduates of U.S. veterinary colleges in 2016 spent $631 million in tuition and fees (interest and living expenses not included) and borrowed $418 million to pay for it. This year, the average graduate accrued $138,066 in student loan debt, while graduates with full-time jobs earn an average $73,626 a year, the AVMA reported in October during the group's Economic Summit in Chicago. (The data does not include Midwestern, which opened in 2014; the program's inaugural class graduates next year.)

The AVMA's 2017 debt averages are low, some observers say, because the calculations include those with no student loan debt (roughly 17 percent of the graduating class, up from 11 percent in 2015). When asked to calculate the average debt of only graduates who borrowed money for school, AVMA Economist Michael Dicks responded that the organization "only produces averages for all students." 

That wasn't always the case. The AVMA reports on its website that 2016 veterinary school graduates with debt owed, on average, $167,534.89, and more than 20 percent owed at least $200,000. For many, that snapshot is rosier than reality. Among those 2016 graduates, 95 percent reported debt between zero and $331,045, and veterinary education isn't getting cheaper. Tuition and fees at U.S. programs increased more than 14 percent from 2015 to 2017, Dicks reported. 

Baker remains concerned about the economic realities facing those financially less fortunate. Across the country, veterinarians continue to enter the workforce under crippling student loan debt, he said. If economic conditions don't improve, he predicts many aspiring veterinarians will choose other career paths.

"Most people make a decision to become a veterinarian at 10 years of age, and this becomes their overriding goal," he said. "But at some point, the economic reality is going to start checking in here."

To ease the financial and emotional burdens shouldered by students, MSU leaders have implemented a series of new programs, starting with a system that simplifies applying for scholarships. Other projects include a curriculum overhaul slated for fall 2018 and a novel partnership between the veterinary college and MSU Federal Credit Union — a not-for-profit financial services option outside the federal student lending system.

Unveiled in September, the MSUFCU Veterinary Medicine Student Loan Program is available to third- and fourth-year students, offering borrowers up to $25,000 per year at 4.6 percent fixed and 4.75 percent variable interest rates. The loan is capped at $50,000 under five-, 10- or 15-year repayment plans. Other perks include percentage rate reductions for bank auto-payments; deferred-payment options; the ability to release co-signers; and no prepayment penalties. "They're certainly not going to finance a complete education, but they may be able to step in and help at a lower interest rate," Baker said.

He added that as a group, veterinary students are a safe investment for lenders. "The college's default rate is .0009 percent," he said. "If you add the zeros and multiply by 1,000, you don't even get part of a student. Here, they have the highest debt-to-income ratio and the lowest default rate (among health-care professionals). I think that says a lot about veterinary students."

How the MSUFCU Veterinary Medicine Student Loan Program compares with federal educational loans depends on a variety of factors, including ever-fluctuating interest rates. Right now, Stafford Loans for professional students carry an interest rate of 6 percent, while GradPlus has a 7 percent interest rate. MSUFCU loans also come without income-driven repayment options that are available through the federal student aid system.

"It's not a perfect solution for every student," Donna Harris, MSU assistant professor, said in a press release. "The creation of this loan is one attempt to get started as we address the debt situation. It's a pilot program, and it's evolving as we learn more about how the program works."

So far, six students have applied. "Keep in mind this is new, and the roll out was in September," Baker said by email. "Since the term had started, students had already lined up other financial aid. It will need some time to grow."

Impact of state funds

Perhaps the most obvious way to lower student debt is to lower the cost of tuition and fees. But the trajectory is moving in the opposite direction. Economist Bridgette Bain reported during the AVMA Economic Summit that tuition and fees collectively climbed 15 percent during the past three years at U.S. veterinary programs. Since 2001, Bain said, mean annual pay for new veterinarians grew an average of $700 per year, while the average debt of new graduate veterinarians increased by $4,900 annually.

That disparity stands to negatively impact the future of the profession, warned Dicks, head of the AVMA Economics Division. "We have more people with debt-to-income ratio that's unsustainable," he said. Considering that the profession might one day be attainable only for wealthy students, he mused, "At what point do people decide they cannot financially afford to become a veterinarian?"

Baker has had some success keeping tuition increases low, a feat that requires working with university leadership, namely the provost. When Baker entered the dean's office in 2014, it was typical for the veterinary college's in-state tuition to increase 4 percent a year.

The following year, "we worked with the provost to get that lowered to 2 percent," Baker said. In the current academic year, in-state tuition increased 2 percent again, but Baker was successful in freezing out-of-state tuition.

The work to restrain tuition increases is ongoing. "This is year-by-year; I do not have a long-term commitment," he said, noting that final decisions about tuition rest with the MSU Board of Trustees, not the dean's office."They get their recommendations from the president and provost. We don't talk to the board directly."

Higher education is a business that gives program administrators little control over how state funding and other nonoperating revenues are allocated across colleges and programs, Dicks stated. Many programs blame their tuition increases on the fact that state appropriations to public education have dropped over time. "In 2001, student cost as a percent of the total education costs was 29 percent across all states; now it's 47 percent," he noted by email.

However, Dicks said, he was surprised to learn that there is "no relationship" between state appropriations and the tuition and fees that veterinary college students pay. When public money declines, tuition and fees go up, he said, "but there isn't any direct relationship between what happens at the state legislature and capitol and the tuition and fees at colleges of veterinary medicine."

Rightly or wrongly, program administrators often are blamed for the escalating cost of education, Dicks asserted, noting that there are a limited number of ways for a program to stay in the financial black. "(Veterinary college deans) can cut budgets; they can raise tuition and fees and they can increase numbers of students," he said, pointing out that while every school has more students and most have higher tuition and fees than in 2007, that doesn't mean they are financially healthier for it.

Lloyd, head of UF's veterinary college, asserts that deans have "very little influence" on how tuition is set — but he's trying.

With greater support from the Florida Legislature, UF's veterinary college tuition has remained static since Lloyd's tenure began in 2013. The price for the 450 or so students enrolled: $28,787 for residents and $45,500 for nonresidents, plus student loan interest and living expenses. 

Students pay the same amount per year from the time they enter the program until they graduate, Lloyd said. While that can change at any time, the dean said he has no plans to let that happen.  

"We continue to toe the line on cost and efficiency," he said. "If they come and ask, my response is always, 'No, tuition is high enough.' Sometimes schools get painted as the bad guy, but we're all doing what we can to help solve this."

Reinventing curriculum for class of 2022

In Michigan, one way Baker aims to do that is by overhauling the veterinary college's curriculum so that it's simultaneously more flexible and streamlined to graduate career-ready veterinarians in a way that's cost-effective for both students and the program.

"The plan for implementation would be fall of 2018," he said. "That's when the first group of students will experience this."

It's unclear what the remodeled program will look like or how it's being constructed, apart from a few publicized details: Under way are weekly meetings by a curriculum committee, charged with mapping competencies and learning objectives. A wellness working group aims to identify how the curriculum reinvention will affect students and look at ways to evaluate their progress. Learning will focus on real-world and hands-on applications, moving away from 50-minute lectures.

The first two years (four semesters) are organized into systems courses that integrate the disciplines of veterinary medicine. 

With the average veterinarian completing 4.5 years of undergraduate education and four years in veterinary school, MSU leaders have widened the pathway into the veterinary college by modifying its prerequisites so they can be completed in two years rather than four. "This can result in early admissions and decreased undergraduate debt," Baker said. 

His goal is to shorten the time it takes to earn a degree and better prepare graduates for the workforce. That could mean attracting aspiring veterinarians who are earlier in their education or refining material so that it focuses solely on real-world applications.

Associate Dean Dr. Michael Chaddock asserts that any adjustments to the curriculum won't risk accreditation. The Council on Education, the accrediting body for U.S.-based programs, is scheduled to visit the program in fall 2019 as part of its review cycle. 

"We're not looking to go off the reservation, but at the same time, we're trying to be open-minded," Chaddock said.

Focused on scholarships

Another project rolled out under Baker's leadership is the the MSU Scholarships Program, which automates the scholarship application process. At the same time, the College of Veterinary Medicine Development Office is focused on attracting more donations to support student scholarships.

Veterinary students save $2.30 in loan payments for every $1 a scholarship provides, administrators estimate. For that reason, Baker wants more students to take advantage of all that's available to them.

"We've got Harvard's tuition, but we don't have Harvard's endowment," he said. "And we've got a lot of work to do on the scholarship side to change it."

The MSU Scholarships Program uses federal student aid information to match students' qualifications to unused scholarships. "You will not need to apply ...," the college's website states.

The result has been a steady uptick in awards. During Baker's first academic year as dean (2014-15), scholarships provided 4.7 precent of the veterinary school's total tuition bill. This year, Baker projects that scholarships will cover 10 percent.

"Right now, more than 50 percent of our student body are awarded scholarships," said Dr. Hilda Mejia Abreu, assistant dean for admissions and scholarships. "On average, they receive about $2,000 a year."

All that's required is a show of gratitude, the website says: "Funds will not be released until a written thank you note to the donor is submitted."

Passing the baton

It seems MSU's efforts to tackle student debt are attracting interest. By email, Baker said he's witnessed growth in the program's popularity.   

"Something is happening," he noted on Saturday. "Our final number of applications in this cycle has increased significantly. Initial applications doubled. We had 1,200 completed applications, which is up by 400 from last year." 

Just as the impact of changes begin to materialize, the dean has announced plans to retire. Baker plans to leave office in July, ending a career that spans neary 36 years at MSU. Conveying his intention in a fundraising letter to alumni, he listed several accomplishments achieved during his tenure.

Among them, he wrote: "The college is viewed as a national leader in addressing the student debt issue, and we have made significant progress in this area for our students."

In an email to colleages, he said it's been an "honor and privilege" to serve as dean.

"It is time to move on to the next adventure," Baker wrote. "... The college is ready for this transition."