A Comparative Analysis of Repaying the AuD Student Loan Debt

By Amyn Amlani, PhD

According to a recent Forbes report,¹ US student loan debt is the second-ranked consumer commitment, trailing only mortgage debt. Several factors² contribute to the rising costs associated with higher education, such as the cost of instruction (but not faculty salaries), operation and maintenance, student services, and research.

For graduate students enrolled in a professional audiology program and for those professionals that recently received their Doctor of Audiology (AuD) degrees, the ability to re-pay student loan debt could mean the difference between professional longevity and professional attrition. This dilemma is well established and supported by facts such as:

• 41% of graduating audiologist who earn a Master’s degree leave the profession within a decade of graduation;³
• 44% of AuD students question why they are choosing audiology as their profession;⁴
• Roughly 20% of students enrolled in an AuD program drop-out prior to degree completion;⁵ and
• Roughly one-third of graduate admissions offer funding to incoming students⁶

In this month’s blog, an example of student loan debt has been created, along with corresponding loan repayment estimates. Data from this example is then compared to mean salaries from other professions.

Hypothetical Example

Table 1 highlights assumes that a hypothetical student was granted subsidized loans only for four years of undergraduate studies (i.e., $40,000 debt) and four years of graduate audiology studies (i.e., $60,000 debt). Interest rates during undergraduate and graduate studies is 4.45% and 6%, respectively, or 5.23% combined. The rationale to use $100,000 in student debt was reported by Gaffney

.⁷

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Table 1: Hypothetical example of student loan debt accrued over an 8-year period (i.e., 4-years of undergraduate education; 4-year professional education). The example also estimates repayment estimates over a 10-, 20-, and 30-year period, along with the minimum annual salary required to repay the student debt.

The data shown in Table 1 are predicated on:

1. Subsidized loans only, where the government pays interest while the student remains enrolled and in good standing;
2. The model excludes additional expenses, such as administrative fees and loan origination fees;
3. The interest rates are weighted accordingly given differences in undergraduate and graduate principle;
4. Student repayment periods of 10-, 20-, and 30-years; and,
5. Repayment values are capped at a debt-to-income ratio of < 8%.

Relationship Loan Repayment Estimates and Professional Salary

For borrowers of student loans, living within one’s means can become problematic. In our example, the student has earned both a bachelor and doctoral degree, but managed to rack up $100,000 in student loan debt. To pay off this debt, below are three standard options:

1. If the student wanted to pay off this debt over a 10-year period, while retaining an 8% debt-to-income ratio, he/she would require a minimum annual salary of $160,789.95 for the next decade (Figure 1).
2. If the student wanted to pay off this debt over a 20-year period, while retaining an 8% debt-to-income ratio, he/she would require a minimum annual salary of $100,909.11 for the next two decades (Figure 1).
3. If the student wanted to pay off this debt over a 30-year period, while retaining an 8% debt-to-income ratio, he/she would require a minimum annual salary of $82,644.84 for the next three decades (Figure 1).

Figure 1. Student loan principal and interest for a 10-, 20-, and 30-year repayment plan, along with the minimum salary required for repayment at an 8% debt-to-income ratio.

A problem with these options is that the average audiology salary is markedly less than the amount of debt borrowed. According to the US Department of Labor, the average salary for an audiologist is $75,920 (i.e., $36.50 hourly; $6326.67 monthly).

With this average salary, and making minimum payments towards the $100,000 in student loan debt + 5.23% average interest at an 8% debt-to-income ratio, it would take the average audiologist roughly 38 years to pay back this loan.

This finding suggests a negative correlation between student education costs and professional outlook, and serves as a threat to professional growth.

Audiology Student Loan Debt Compared to Other Professions

Table 2 reports on the time needed to repay the same student loan debt compared to other professions’ average salaries.

Summary

If the profession of audiology is to meet the immediate and future needs of the US population that requires hearing healthcare, then action is required at many levels to circumvent the potential attrition that looms with the next generation of AuD graduates, many of whom will be burdened with a negative debt-to-income ratio.

It is incumbent on universities to find avenues that reduce the costs associated with higher education (e.g., graduate assistantships, three- versus four-year degree programs, credit hours to graduation). In addition, professional organizations should assess demand and supply needs within the public health domain and guide the profession with a revised strategic mission to ensure that the needs of the public and the profession are met.

A failure to assess the student loan debt issue now only entices new avenues of growth for other professions and new models of service delivery that excludes audiology.

References:

1. Friedman, Z. (2018, June 13). Student loan dent statistics in 2018: A $1.5 trillion Crisis. https://www.forbes.com/sites/zackfriedman/2018/06/13/student-loan-debt-statistics-2018/#1c3c55e27310
2. Adams, M. (2017, June 20). What contributes to rising college costs? https://www.eab.com/research-and-insights/facilities-forum/expert-insights/2017/factors-affecting-college-tuition
3. Windmill, I.M., & Freeman, B.A. (2013). Demand for audiology Services:  30-year projections and impact on academic programs. J. American Academy of Audiology, 24, 5: 407-416.
4. Bennett, H.N., & Steiger, J.R. (2009) Au.D. student attitudes toward the profession: a 2002 survey repeated in 2009. Audiol Today, 22(6):53–63.
5. Higher Education Data Services (2013). Higher Education Data Systems (2013) https://www.asha.org/Academic/HES/Archived-HES-Data-Reports/
6. https://www.asha.org/uploadedFiles/2013-2014-CSD-Education-Survey-National-Aggregate-Data-Report.pdf
7. Gaffney, T. (2016). The rising cost of AuD education. https://hearinghealthmatters.org/hearinprivatepractice/2016/rising-cost-audiology-education-debt/