COE Accreditation of Vet Schools

So, we're still all excited about the COE accreditation of another school outside the US.

You know, we still have the problem that we've lost pharmacy revenue, we've lost spay/neuter and vaccine revenue, and people won't pay what we have to charge for sick work. Addressing oversupply issues won't address those underdemand issues. I don't think stopping foreign accreditation is an effective way to address oversupply. Maybe I'm wrong; I can't know what I don't know. But I think the following sounds plausible...

So, say the USDE does decide, after the Dec 12th hearing to review the COE's standing as a recognized accrediting body, that Title IV funds (which includes most federal student loans) shouldn't be supporting foreign schools just to create more DVMs that can't get a job or pay back their loans. Based on that decision, federal student loans become unavailable to students attending non US schools.

How will that affect supply?

Well, first of all, Title IV funds are for making education accessible to US citizens, which is exactly what happens when US citizens go to an accredited vet school. The fact that the funds are paid to an accredited school outside the US- I don't know if that's within the scope of the USDE's charge or not. I know there are US students attending enough schools outside the US- not just a scattered handful in vet med- that there is an entire section of the US Dept of Ed website dedicated to helping personnel at those schools secure, administer and disburse those loans to those US citizens.

So say the USDE decides to restrict COE's accreditative authority regarding schools outside the US, or decides Title IV funds may not be used to access schools outside the US. All such schools would then not be accredited and students at these schools would not be allowed access to Title IV funding. Or maybe it would be just new schools from then on. While the US DOE has never made changes retroactive to loans already issued, future loans are fair game so students enrolled at non US schools could lose access to future loans, leaving them facing the Concorde fallacy. Then throw in the consideration that the way COE accreditation specifically is currently structured, any change in accreditation status only affects future students. In other words, if your school is placed on provisional or terminal accreditation, you still graduate from an accredited school. I don't know which way the USDE would view that. I could see it either way. Anyway... How will this affect supply in the US? We'll have made at least an incremental change toward decreasing the supply of vets in the US, right?

Maybe not; maybe just the opposite. Unfortunately, this change could affect supply in the wrong direction, as it could lead to a large and permanent expansion in the total number of veterinary seats.

What? Huh?!? HOW??!??! We shut down foreign accreditation! According to the 2011-2012 NAVLE technical report that's a thousand fewer people entering our job market every year! We've cut the supply by a quarter!

But... the first year that those funds aren't available.... what do the 1000 or so students who would've gone overseas do?

I think it's likely they submit applications to US schools. These are not quitters, these thousand willing to go halfway around the world, some after not getting into US schools. Many are people of tremendous determination and life experience who just don't fit the usual metrics. Vet schools have been using the same criteria to pick who gets in for decades: GPA, GRE, work experience, the infamous LOR. Well, the applicant pool they're picking from is different now; the reasons people are in the applicant pool are different; the professional landscape they face coming out is certainly different. The non US schools have historically offered those students an alternate route- everybody gets in, not everybody gets out. That population is not easily dissuaded. Making funding unavailable for seats at overseas schools isn't goign to make that thousand people give up. They will still seek a seat.

By making only seats overseas more difficult to access, we shift the demand for those seats to the US. That's at least a thousand more applicants a year pouring almost 4000 applications into the 28 US schools.

if we succeed in applying a funding control mechanism to only the non us schools, we risk effectively driving up demand for US seats by 35% in a single year. I don't see the deans passing on the $28 million in tuition dollars those 1000 kids can bring in, do you? Think the moral weight of creating more crushingly indebted grads will prevent the administrations and state officials in Arizona and New York and Alaska and Tennessee from pursuing their new schools?

Applicant to seat ratios at US schools will go up. I think it's plausible that deans at cash strapped existing schools will respond to the increased demand by expanding to capture these available tuition dollars. State legislatures will view proposals for new programs much more favorably in light of increased demand.

The market forces acting on the demand for seats are still disconnected from the market demand for veterinarians. Making Title IV funding unavailable to schools outside the US does nothing to address this. Gainful employment does, and the Gainful Employment regs do too. More on that later.

I don't know for sure how this will play out. Sure, it may be a year or two before any new regs from USDE take affect. Some US schools could fold before then. The economy could continue to recover. Gunderson could succeed in getting programs the authority to limit loans. And yeah, you can do a lot of educating of the prevet pool in that time as to how bad of a return on investment DVM training currently is.

But it won't make a big difference. You can't touch the dream. We don't know why so many people want to go to vet school in the face of an objectively terrible outcome. There are unappreciated market forces at work making it the most attractive course of action available to those people. It's not because they are young and idealistic and inexperienced. I don't buy the argument and you shouldn't either, according to Dan Ariely's work. In a recent series of studies, this groundbreaking researcher into economic decision making has demonstrated that we do not make economic decisions differently as we gain experience with purchasing assets.

I worry that we have run a specific risk here, a risk we might not have appreciated. I know I didn't. I know one outcome might be a permanent and significant increase in the capacity to train DVMs in the US. Once created that capacity wants to stay filled. I'm pretty sure the general short to medium term outlook for individuals trained as DVMs in the US consists of incredible debt loads, tight employment opportunities and stagnant or falling compensation.

I'm not a big fan of anythign that puts more people in that situation. But if limiting supply by making overseas seats won't work- may even make it worse- what are we going to do about it?

Enter Gainful Employment. I've written about GE in a previous post; it is the set of regs that require schools to meet ridiculously low benchmarks for employment and debt repayment of graduates from that program. It only applies to for-profit schools, and it's not currently in force anyway. But the required system for accumulating and retrieving the data already exists and is working.

Since the schools are not required to fulfill the regs, there is no threat of losing eligibility for federal student aid. There is no need to meet the ridiculously low benchmarks called for in the regs. Fulfilling the requirements of the regulations is not the point here. Rather, it is a low cost way to get accurate, real time, objective data that the schools can use to improve their performance. If a given school is in fact doing a better job than other programs of keeping cost to students low, or getting them into higher paying jobs after graduation, they should be able to tout that as a recruiting point. If there are opportunities for improvement, this helps the school identify where those are and gives the school a timely, responsive metric for assessing progress.

If the schools voluntarily request the information they are entitled to under the Gainful Employment regulations, this information will clearly document the value proposition a DVM represents. At the moment, it isn't favorable. Well, that's what we all suspect- but we do not have access to the data defining how bad it is. Gainful Employment reg data will allow us to know not only the extent of our current problem but also detect when it starts to improve. That is a benefit to the schools and profession; there's benefit to the student as well.

These regulations are not currently in force and the colleges weren't subject to them anyway, but as noted in Dr Donna Harris' report to the AAVMC Student Debt Initiative, colleges believe that providing financial tools helps students whether it's required or not. In this case it would make available to the students objective data on debt and compensation- collected directly from the Department of Education and Social security Administration, respectively. Students deserve access to accurate information on what they are buying with the money they are borrowing.

The debt, earnings and debt to earnings measures provided by this program will help ensure students make the wisest possible choices about whether and where to pursue DVM training.

This is a fair, market based measure that PREVENTIVELY addresses oversupply and student debt at minimal cost to the schools. Best solution I've seen come down the pike yet. I'll talk about a couple others here in subsequent posts.

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commented 2013-12-23 14:15:25 -0500 · Flag

Thank you

COE accreditation of vet schools outside the US

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