“It comes down to this,” said Hayley Schafer, 30. “Is there anything else I’d be happy doing? No. Is there any way around paying off the loans? No. So, what the heck? A lot of it is just trying to put it out of your mind and maybe it’ll disappear.”
Schafer has more than $312,000 in educational debt and earns just $60,000. She must be a lawyer, right?
But Schafer’s not a lawyer or law school graduate. What does she do? The answer might surprise you….
Please call her Doctor Schafer. Hayley Schafer is a veterinarian. And as the New York Times reported over the weekend, the world of veterinary medicine is in a dilemma similar to that of the legal profession: too many graduates with too much debt chasing too few employment opportunities.
The NYT article on vets was written by David Segal — the reporter that law school deans love to hate, due to his harsh and hard-hitting series of stories on law schools. So perhaps law deans and professors will be pleased by Segal’s latest piece; misery loves company.
Whenever someone challenges the value proposition of law school, members of the legal academy frequently respond, “Enough about the so-called ‘law school scam.’ Why don’t we hear about the ‘journalism school scam,’ or the ‘grad school scam’? There are thousands of graduates of J-school and thousands of people with master’s degrees or Ph.D. degrees who take on huge student loans and wind up jobless in the end.”
That certainly seems to be true of vets. The similarities between the worlds of veterinary education and legal education are striking. From the Times:
The problem is a boom in supply (that is, vets) and a decline in demand (namely, veterinary services). Class sizes have been rising at nearly every school, in some cases by as much as 20 percent in recent years. And the cost of vet school has far outpaced the rate of inflation. It has risen to a median of $63,000 a year for out-of-state tuition, fees and living expenses, according to the Association of American Veterinary Medical Colleges, up 35 percent in the last decade.
This would seem less alarming if vets made more money. But starting salaries have sunk by about 13 percent during the same 10-year period, in inflation-adjusted terms, to $45,575 a year, according to the American Veterinary Medical Association….
Rising tuition, declining salaries. Sound familiar?
“We’re calling for more bodies coming through the veterinary educational pipeline at higher and higher cost at the very point in time that we need fewer and fewer,” says Dr. Eden Myers, a vet in Mount Sterling, Ky., who runs the Web site JustVetData, where she crunches numbers about the profession. “And they are going to get paid less and less.”
Some say the same about lawyers. The argument: market demand and therefore compensation for lawyers in the U.S. will likely decline in the future, thanks to technological developments like predictive coding, outsourcing of legal work to places like India and the Philippines, and the rise of “do it yourself” companies like LegalZoom and Nolo.
The similarities don’t end there. Check out this quote from Dr. James Wilson, a veterinarian who’s also a lawyer:
“I have said it over and over to myself and friends, ‘This is as close to predatory lending as anything I’ve ever seen.’ The only reason it’s not a high-profile crime in 2013 is because income-based repayment and pay as you earn have postponed the reality and pain for 20 to 30 years.”
One could say the same thing about IBR’s operation in the law school context, which raises this scary future scenario:
[Hayley Schafer] signed up for income-based repayment, a government program available to federal student loan recipients. (A newer program with slightly more generous terms, called Pay As You Earn, or PAYE, is available to more recent graduates.) Both income-based repayment and PAYE allow graduates to lead relatively normal lives by paying back a modest percentage of their income based on a formula. After a fixed amount of time, from 10 to 25 years, the balance of the debt is discharged.
That’s the good news. The bad news is that the interest on the debt keeps growing and taxes must be paid on the amount discharged, as if it is a gift. Dr. Schafer sends $400 a month to Sallie Mae, a sum that will rise. But what kind of tax bill awaits her? Asked to run the numbers, GL Advisor, a financial services company that specializes in student loans, calculated that Dr. Schafer’s debt is likely to exceed $650,000 when her tax bill lands 25 years after the start of the loan, which means she will owe the Internal Revenue Service roughly $200,000. That will happen while she is still deep in her career, perhaps around the time she wants to send some children to college.
But here’s the flip side of the case against veterinary school, viewed from the perspective of a lawyer or would-be lawyer: it shows how diminishing opportunities across a wide range of fields make law school a not-so-insane, even rational, decision. For more on this subject, please read In Defense of Law School: Because What Else Are You Going To Do With Yourself?
(And options like IBR and PAYE, even if they might be bad public policy or bad for the American taxpayer, are undoubtedly beneficial for people considering law school. The possibility of facing a tax bill a quarter century from now seems too remote to have much of an effect on decisions being made today.)
You can read the full Times piece about the crisis in veterinary education, which is very interesting and worth your time, over here. To anyone reading this who might be considering veterinary school as an alternative to law school, you might want to think again. If you’re going to be in massive debt for decades, you might as well spend those years dealing with figurative rather than literal horses’ asses.
High Debt and Falling Demand Trap New Vets [New York Times]