The Role of Veterinary Scholarships in minimizing veterinary debt
A couple of weeks ago, I discussed the importance of state and federal spending in minimizing veterinary debt. State support of public higher institutions is critical to minimize tuition increases while federal student loan programs can have a big impact on the total amount owed over time. Another way in which student debt can be reduced is by increasing veterinary scholarships.
Scholarships are crucial as they provide money to cover tuition that does not have to be paid back. Every dollar of scholarship helps avoid up to $2.30 in loan repayment because it avoids debt principal and compounded interest.
Scholarships can be awarded based on need or based on merit. Scholarships can come from outside institutions or can come from endowments set up directly with the colleges.
Colleges push to grow Veterinary Scholarships
As discussed previously, some tuition increases are outside the control of veterinary school deans due to state funding cuts and budgetary pressures. A 2017 study estimated of every $1000 in state cuts, at least $257 is passed on to students as higher tuition.
To help with student debt, veterinary colleges have increased their fundraising for scholarships with some successes.
Some notable donations and campaigns include:
University of Missouri received a commitment for a $2.5 million endowment specifically for scholarships from a St. Louis couple in 2014.
NC State received a $5 million gift in 2016 that was matched one to one by the RB Terry Charitable Foundation for a $10 million endowment for scholarships.
University of Florida has made an impressive commitment by creating the UF Veterinary Access Scholarship Program. This scholarship campaign has had $16 million in new dollars committed since 2015, allowing the school to double the number of scholarships they are awarding.
The Treadmill
Despite the increased push for scholarship help, increases in class size make fundraising feel like a treadmill. Colleges have increased class size due to the need to increase revenue in the face of state budget cuts.
However, if your class size increases by 20%, then your current scholarship endowment is spread over more people. In a recent Cornell Alumni article, Major gifts officer, Allison Rose Smith, estimated, that the Cornell scholarship endowment needs to increase by $10 million just to keep the scholarship level THE SAME for incoming students in their new larger class.
Even if you can keep fundraising apace with class size changes, scholarship dollars also have to increase to cover rising tuition. In 2015, the average scholarship availability per student was $2488. In 2017, the average institutional scholarship for DVM students did increase to $5175. However, in 2015, median resident tuition was $22,887 and in 2017 it had increased $24137. The $2687 in scholarship/student increase minus the $1250 tuition increase only translated to a $1437 improvement. For non-resident students, $47,259 was the tuition in 2015 and it rose to $51,125, a $3866 increase. Thus, the $2687 increase in scholarship dollars didn’t keep pace.
The Impact of New Buildings on Veterinary Students
Bigger class sizes dilute available scholarship dollars. In addition, bigger class sizes can lead to a need for bigger classrooms. This need for more space means capital is needed for a building project. Thus, development teams have to direct their efforts into finding donors for the project. These large capital campaigns potentially lead to less time for scholarship fundraising.
In a 2017 article from the VIN News service on the capital campaign for new facilities at UC Davis, Anthony Bartels, DVM MBA, VIN’s debt-education director remarked, “They’ve already raised $57 million in less than two years without a public effort. So, scholarships represent 5 percent of what they raised in two years for facilities upgrades without a public campaign, … Just imagine if a similar effort went into scholarships.”
And what about the impact of new buildings on student costs? Many University administrators claim they do not affect tuition because the construction dollars come from a different pot of money. A capital campaign may cover the full cost of construction. If the project includes new clinical space, new revenue can be created. However, more space means more utility bills, more cleaning and maintenance, and other higher fees for ongoing use. Those increased maintenance costs, without increases in state budgets for education, are likely to get passed on to students.
Universities in general have been on spending sprees in recent years. In 2015, colleges and universities paid for 21 million square feet of new space, despite often having back logs of maintenance on older facilities. Overall, from 2007-2016, there was a 10% growth in campus space but only an 8% growth in overall university enrollment.
Building Dilemmas
That is not to say that some of our oldest veterinary colleges don’t need newer facilities. Despite the astronomical price tag UC Davis has put forth for new facilities ($500 million was an original projection), no one doubts the need to add and update clinical space. The hospital is close to 50 years old and was only built for 3000 patients a year.
Giving to your Veterinary Alma Mater
A statement University of Florida has made during their UF Veterinary Access Scholarship fundraising campaign rings true for me. Those of us who are out of school, owed way less debt than today’s graduates, and have owned practices should look to pay it forward if we care about our profession. Specifically, if you sell a practice, could some amount of the proceeds go to scholarships to help the next generation? Donations have the secondary benefit of also reducing your taxes.
However, before donating to veterinary scholarships, we, as vet school alumni, need to ask our colleges what they are doing to manage their budgets, control tuition hikes, and minimize student debt. An AVMA economics study found that tuition rises are not entirely correlated with state funding and thus college budget priorities do play a part.
I want any veterinary scholarship money I give to have a real impact. Thus, I want Deans to prioritize minimizing tuition increases. When colleges talk about increasing class size, we need to ask whether this is a real improvement or just getting on the treadmill. If our alma maters start talking about building projects, we should be asking hard questions. Deans should need to justify that they have looked for the most cost-effective building solutions aimed specifically at the students, clients, and pets they serve.
If we all work together to find solutions that minimize student debt, we are more likely to have veterinarians entering the profession with more resilience. In addition, with less debt, veterinarians are more likely to be able to continue to own and control our profession.
For information on current scholarship availability, click here.