Paying back loans after graduating from psyd/phd?

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ClinicalPHD5

Hi Everyone:

Can people post about their ability to pay back their loans, and about how much are the monthly payments after graduating? My friends told me that taking out $100,000 in loans amounts to about $1,000 per month and even that is really hard to pay off with a psychologist salary. I read that the average debt levels for clinical psychology PHD and PsyD's nationally is $77,000 (according to APPIC surveys).That seems very high as an average.
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I have a significant amount of loans from undergrad. If I had to pay them back myself, I would have to use option where the amount you owe depends on your income level.

Luckily, my parents are paying for my undergrad and they are now in a financial place where they can pay off more. However, the whole loan experience has made me really face the consequences of having loans. Over the loan lifespan, we will end up paying 3 times what we took out. I have applied only to funded PhD programs because I know that taking out $100,000 in loans isn't a good option for me. I would caution anyone to really think about how much you can afford to take out before doing it. I have friends who are lawyers who managed $150,00+ debts but also have a friend in psy who didn't match for internship a couple years ago and was ineligible for further loans as she had already maxed out.

I think if you are financially savvy, you can figure out how to balance your desire for higher education with your ability to pay for it.


ClinicalPHD5 said:
Hi Everyone:

Can people post about their ability to pay back their loans, and about how much are the monthly payments after graduating? My friends told me that taking out $100,000 in loans amounts to about $1,000 per month and even that is really hard to pay off with a psychologist salary. I read that the average debt levels for clinical psychology PHD and PsyD's nationally is $77,000 (according to APPIC surveys).That seems very high as an average.
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I also have a very significant amount of loans from undergrad, most of which are through Sallie Mae (ughhhh). That's why I really want to attend at least a partially, if not fully, funded program. I would have only applied to funded PhD programs, but am at a disadvantage because I'm applying straight from undergrad, so I ended up applying to PhD AND university-based PsyD programs. If I get into a program that's going to cost me a significant amount of money (for example, some of the programs I'm applying to offer ONLY a fellowship/assistantship or ONLY a tuition waiver and are in a high cost of living area), I'm not going to go. I refuse to take out any more loans, so if it comes down to it, I would be willing to wait another year or two before re-applying. In fact, I applied to two fully funded experimental M.A. programs as a back-up plan, in case things don't pan out. Taking out even more loans is just not worth it for me.
 
Yes, I have heard horror stories about student loans and how especially those who are (or graduated) from various professional schools are enduring massive debt. Actually, I am in process of trying to figure out if I can handle taking out massive loans as I was recently accepted to a PsyD program in Chicago. My main concern is that living in Chicago is costly and even taking out the annual max (I believe its $35,000) is not going to cover my the tuition and my living expenses. Essentially, I have a tough decision to make because leaving Chicago is not an option and I'm at a point in my life where I need to either get back to school or forget about it.
 
ClinicalPHD5 said:
Hi Everyone:

Can people post about their ability to pay back their loans, and about how much are the monthly payments after graduating? My friends told me that taking out $100,000 in loans amounts to about $1,000 per month and even that is really hard to pay off with a psychologist salary. I read that the average debt levels for clinical psychology PHD and PsyD's nationally is $77,000 (according to APPIC surveys).That seems very high as an average.
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With Income Based Repayment, federal loans such as Stafford and Gradplus loans may be repaid based on your income and number of dependents. It will not exceed 15% of your annual income. The actual amount varies depending upon number of dependents and tax filing status. However, a single person making 45,000 per year owing 150,000 with no dependents would have a monthly payment of $450. A married couple filing taxes jointly and making $80,000 a year with 2 dependents will pay 590 per month. After 120 payments under income based repayment, persons working for non-profits or in any government or publicly funded job will have the *entire balance of their loans forgiven tax free.*:thumbup::thumbup: The person does not have to be working at the same job and it does not have to be 10 consecutive years. One need only have made 120 payments under income based repayment while working at any state local or federally funded job or 501C nonprofit. Go to http://www.ibrinfo.org/ for more information.
 
Oh, my goodness. I need to consolidate and just used the income-based repayment calculator. There is a HUGE difference between what my payments would be if I file my taxes as married with dependents versus if I file as married-filing-separately with (or without) dependents. Basically, filing as married would mean monthly loan payments that are more than DOUBLE what I would owe if went the married-filing-separately route. I'm just not sure how much larger a tax bill filing separately would mean for us. We've always filed with TurboTax, but it may be time to consult an accountant!
 
Hello everyone. I need some advice. I deferred an offer to a phd program in an expensive area because the school was too expensive with little aid. I studied and improved my GRE score a little to try to get into more funded programs. I loved the program I got into and will lose the status on Dec 1st. My husband would be working while I am in school and family has offered to send money each month but not much by NY status- 1500. What would you do? Take the chances and reapply to cheaper programs or take on the debt?
 
There aren't too many clinical PhD programs that do not offer full tuition remission and give you a stipend. Do you have options for fully funded programs? Does this program have good stats (high accredited match rate, high EPPP pass rate)? Also, what will your debt load be after graduating (after accounting for tuition, books, rent, cost of living, etc)?
 
WisNeuro said:
There aren't too many clinical PhD programs that do not offer full tuition remission and give you a stipend. Do you have options for fully funded programs? Does this program have good stats (high accredited match rate, high EPPP pass rate)? Also, what will your debt load be after graduating (after accounting for tuition, books, rent, cost of living, etc)?
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Total debt is hard to calculate given that aid fluctuates by year and there is no way to be sure how much my husband will make but he does have a degree and work experience. I can tell you the program only offers like 10k to 15k in aid a year but is like 40k. I liked the theoretical orientation of the program which will be hard to find elsewhere and in a funded program. Stats of the program are pretty good.
 
What's the theoretical orientation? If it's CBT or dynamic, there are dozens upon dozens of each. After that, the debt thing has to be something that you're comfortable with. I don't recommend anyone go over 50k at the very top end. After that, those loans hang over your head into retirement.
 
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It is dynamic and I am having trouble finding funded programs for that. I know Tennessee but I applied there before and did not get in but that was before the GRE increase. It would be over 50k likely with the other school. Even with a two income household is it a problem? I went ahead and picked some schools less desirable and revamped my personal statement but am unsure if I am doing the right thing.
 
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WisNeuro said:
There are a TON of funded programs that will train you in both CBT and psychodynamic therapy. All depends on your geographic restriction.
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My guess is they probably want a mostly psychodynamic training. It tends to happen w a lot of tge Northeastern programs.
 
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I'm in a clinical PhD program now with a roughly 60% behavioral/ABA/CBT emphasis and 40% psychodynamic emphasis. It's pretty much an even split in faculty interests. The program is fully funded, and I'm not taking out any loans (I live with my partner, which helps, but it wouldn't be impossible even by myself). Our program got around 200 applicants last year and extended offers to about a dozen with an incoming cohort of nine. The program is 15 minutes from two major U.S. cities, and is more clinically focused than research focused, but it offers excellent training in both areas.
 
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OP, I would recommend using a loan repayment calculator (e.g., http://www.finaid.org/calculators/loanpayments.phtml) to figure out what your monthly payments would be.
Then just look up how much people earn when they are doing what you are likely to do. Note that salaries vary widely and are based on numerous factors.

It's not difficult to repay $100,000 in student loans for many psychologists, but the payments are not small and they do make it harder to save for retirement and/or to afford a nice house. But if you married into money or have family money, then you should be fine.
 
Many qualify for NHSC loan forgiveness up to $25,000 per year for two-year commitment to an underserved area. This is how I am paying back my student loans over a seven- year time span. Many of these sites do not get filled every year as rate of pay is in the 60-80 thousand range but the perk is the $25,000 per year is non taxable so basically you could be making over $100,000 a year and still only be in your 30's when you can acquire much higher income and be loan free the rest of your career.

$77,000 average seems low to me as I would think it would be over $100,000. With NHSC help and paying an additional $700 to $1000 per month mine will be paid off in seven years. Most pay off their loans in 5 years.
 
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Honestly I feel like I have trouble finding funded programs that teach both - I am not sure what school you are speaking of and you probably do not want to share but could you name some that you know of?
 
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LauraH8214 said:
Honestly I feel like I have trouble finding funded programs that teach both - I am not sure what school you are speaking of and you probably do not want to share but could you name some that you know of?
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I think the majority of programs will at the very least, offer some form of psychodynamic supervision options during your internal practicum, and you should always have the option to seek this type of supervision out on external practicum.

Our program offers course offerings in both psychodynamic and behavioral approaches to psychotherapy, and students start out taking coursework in both orientations and then start to focus more as they progress through the program.

To find programs like this, I would look at Boulder model (scientist-practitioner PhD programs; that offer funding) and are more clinically oriented (as opposed to research oriented). If you do a search of SDN, there are past threads discussing more clinically oriented programs that offer funding. Feel free to PM me if you have any specific questions.
 
LauraH8214 said:
Total debt is hard to calculate given that aid fluctuates by year and there is no way to be sure how much my husband will make but he does have a degree and work experience. I can tell you the program only offers like 10k to 15k in aid a year but is like 40k. I liked the theoretical orientation of the program which will be hard to find elsewhere and in a funded program. Stats of the program are pretty good.
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That sounds very expensive. You could easily get to over 200k in loans and that would be really hard to pay off. It takes a long time to get to where you are bringing in income.
 
While I generally like SDN, I have found a lot of "loan shaming" to go on around here which may keep some people quiet on the topic.
For that reason, I don't want to get into specifics about how much I owe, but suffice it to say that I went to a fully funded program but did not have a liveable stipend and had to borrow. I found that paying back my loans out of pocket was difficult as smaller payments would only partially hit the balance. I cannot tell you how frustrating it felt to pay a significant chunk of my income each month and see the loan balance going UP instead of down.
Fortunately, I now have a VA position that will pay off my loan fully. Would I do it again? Knowing that I got the full loan repayment, probably. But not knowing that? I really am not sure.
 
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I don't see it as much of "loan shaming" rather than actually asking people to look at the actual numbers. I know of very few people who actually do. The thing is, these loan repayment opportunities are not universal, nor are they guaranteed depending on Congressional actions. Nothing wrong with having people think about the specifics. And, nothing wrong with the notion that the money has to come from somewhere. I'd rather have money to fix our nation's crumbling infrastructure than pay for poor decisions and FSPS's.
 
I think both goes on - I've seen people get hassled for saying that they took out x amount in loans, seen people get pretty harsh with them, and I've also seen fair, nuanced opinions on the necessity to look at the numbers before taking on debt. Agreed that the opportunities are not universal. I see myself as quite fortunate to be able to get my loans paid by my workplace. I've thought about it some and believe that without loan repayment, or a small loan (less than 30K) I don't think the degree is worth it. So, I would not do it again.
 
I do get the humiliation factor about talking about student loans and rarely talk with other psychologist about my loan amount or being in the NHSC loan repayment program. Everyone seems to have a negative slant about student loans and that graduate students should be in poverty during grad school.

It seems that many psychologist are judgmental towards other psychologist on a number of subjects. I have learned to keep many of these points frequently judged private as it is no one else business my GRE scores, EPPP scores, Loan amount, etc...
 
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Like Psycycle, I attended a fully-funded program with a low (~11-12k) stipend, and opted to take out loans. I ended up staying at my program a bit longer than intended, and took out more loans than intended. If I had to do that part again, I'd have attempted to stretch my stipend quite a bit further and minimized the loan amounts.

As Psycycle mentioned, for smaller loan totals, I would say it's fine. For larger amounts (i.e., $100-150+k), it's generally not. It's still manageable to repay those amounts using the existing income-based repayment and forgiveness options, but in those instances, you're essentially gambling on the programs remaining available and intact for the entirety of the repayment and forgiveness periods. Given how many people are currently likely enrolled or nearing enrollment, do I see them being completely eliminated in the near future? No. But I also don't know that they're sustainable at the current rate, and so I could certainly see the benefits being cut back.

In my case, my loan payments are certainly feasible without feeling like I'm scraping by. But are there lots of other things on which I'd rather spend that money? Without a doubt.
 
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Issues such as EPPP pass rates and funding one's doctoral program primarily through loans with no realistic way of repaying IS actually all of our business, since we all end up with the same license (well--those who eventually pass the EPPP do), and the value and quality of the license depends, to some extent, collectively on the skills and quality of those who hold it. Those with a PsyD from a reputable program should care even more than I do. These loans are far too easy to obtain--bottom tier law schools are playing the same game--and it affects all of us.
 
I think there's a difference between broader discussions of loan amounts, repayment, EPPP pass rates, etc. vs. individuals revealing their personal information in a space that hasn't always been safe to do so. I agree that the loans are dangerously easy to obtain and additionally are often obtained by young & inexperienced people who do not know much about money and interest rates, not to mention compound interest and other factors that make paying the loans very difficult.
 
Peacemaker36 said:
According to one Harvard Law School professor, there is no problem with lower tier schools admitting students who will never practice law and who will go into crushing six-figure debt:
http://www.slate.com/blogs/moneybox...ends_admitting_students_who_probably_won.html

My guess is that his mentality is similar to that of the heads of FSPSs.
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The simple solution is to lower the bar. Pun intended. Everyone can be a lawyer, everyone can be a doctor. Everyone gets a trophy. Having winners and losers is so unfair. What is so funny is how the real winners are the people who make money taking advantage of this naive mindset.
 
smalltownpsych said:
The simple solution is to lower the bar. Pun intended. Everyone can be a lawyer, everyone can be a doctor. Everyone gets a trophy. Having winners and losers is so unfair. What is so funny is how the real winners are the people who make money taking advantage of this naive mindset.
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Although reading the article, I think that particular person's take is that it isn't the school's job to screen these folks out; that's for the bar to decide. Thus, if they're unfit to be lawyers, it'll eventually shake itself out.

That'd be akin to the "worst offender" psychology programs stating that it isn't their job to screen people out and stand in the way of people's dreams; that's what the internship match process and EPPP are for. We see how well that's been working out for us.
 
AcronymAllergy said:
Although reading the article, I think that particular person's take is that it isn't the school's job to screen these folks out; that's for the bar to decide. Thus, if they're unfit to be lawyers, it'll eventually shake itself out.

That'd be akin to the "worst offender" psychology programs stating that it isn't their job to screen people out and stand in the way of people's dreams; that's what the internship match process and EPPP are for. We see how well that's been working out for us.
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I know that wasn't his take - yet, but I would not be surprised to see more pressure being put on lowering the standards for the exams. I was definitely not advocating that it should be that way and the internship example is a great one. In other words, the bottom tier schools feed off the easy student loan money, take in tons of students, and then the cries to increase the APA internship slots abound. Maybe I am a cynic, but I think that making it easier to pass the tests will be next. Think about a few years from now when the student loan "crisis" really hits the news. All of the politicians and news stories will be talking about how these poor individuals paid their money, went to school, but can't work because they can't pass the exam. There will be pressure to lower the standards, we just have to resist that. Even his stance that it isn't their job to screen people is an example of lowering standards.
 
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smalltownpsych said:
I know that wasn't his take - yet, but I would not be surprised to see more pressure being put on lowering the standards for the exams. I was definitely not advocating that it should be that way and the internship example is a great one. In other words, the bottom tier schools feed off the easy student loan money, take in tons of students, and then the cries to increase the APA internship slots abound. Maybe I am a cynic, but I think that making it easier to pass the tests will be next. Think about a few years from now when the student loan "crisis" really hits the news. All of the politicians and news stories will be talking about how these poor individuals paid their money, went to school, but can't work because they can't pass the exam. There will be pressure to lower the standards, we just have to resist that. Even his stance that it isn't their job to screen people is an example of lowering standards.
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I'm hoping not. It seems to be the case that not as many folks are as knee-jerk sympathetic to the "plights" of the average college student as they are various other groups and situations. I'd second that I don't at all agree with his take on things (I do, in fact, feel it's the school's responsibility to screen applicants), and that removing this responsibility from schools is a step in the wrong direction. Cognitive dissonance at work.
 
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There seems to be an underlying feeling of entitlement w. many applicants. Wanting to dictate where they live, when they need to learn/take classes, how long it takes, etc. Money seems to be noticeably absent...until the bill is due, then it becomes everyone else's problem.
 
The one good thing I take out of this is even though I took on a lot of debt that is a bit of a financial anchor, it could have been way worse. In other words, if I couldn't have passed the EPPP, I would have all of the debt and nothing to show for it. For someone to run an institution where they know a significant number of people will be in that situation and completely absolve yourself of any responsibility for that is pretty despicable.
Therapist4Chnge said:
There seems to be an underlying feeling of entitlement w. many applicants. Wanting to dictate where they live, when they need to learn/take classes, how long it takes, etc. Money seems to be noticeably absent...until the bill is due, then it becomes everyone else's problem.
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It sort of reminds me of the "liar loans" that were sold in poor neighborhoods to people with no ability to pay. There is a fine line between helping someone get an education or a house and making it so anyone can do it.
 
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The world is incredibly unfair, and it does seem true that apart from a few exceptional cases, the cosmic lottery of who your parents are dictates much of your life that follows. Getting into a funded PhD program requires so much social capital on top of academic achievement that they probably are out of reach for the majority of applicants, even those who are talented. I really understand why some of these students go on to defend even the bottom feeders of clinical programs, because they at least give the appearance of access to the top rungs. I believe the students when they make that argument. When the representatives of the programs do, it's a cynical ploy.
 
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Hasn't really been my experience all that much. In the 2 programs I was in, it was fairly diverse in terms of a lot of variables. I was one of only a few guys. And it was predominantly a minority cohort. I was the minority being a white male. Also, while there were a few in the programs who came from money, I remember many of us commiserating over growing up in lower than middle class backgrounds. If anything, I think access to clinical psych is better than it is for other things if you have the grades, GRE, and research to get in. Does APA collect any of this data as part of it's larger salary survey.
 
If you can get into an APA approved program, you have the mathematical and "research" skills necessary to calculate the implications of any relevant debt. The choice is the students', as are the consequences.
 
PSYDR said:
If you can get into an APA approved program, you have the mathematical and "research" skills necessary to calculate the implications of any relevant debt. The choice is the students', as are the consequences.
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Meh, I don't know. Fielding is APA accredited, I don't think APA accreditation necessarily means that these students have those skills. :)

Also, the choice is theirs, but other people are correct when they say that the debt is something that affects all of us. The debt repayment comes from somewhere, usually tax dollars. I'm not a huge fan of my tax money lining the pockets of these for profit corporations engaging in predatory practices. Also, these students make the whole profession look bad once they are "doctors."
 
Re: Debt affects us all. Doesn't the government actually make a lot on loans? I read last year that there was considerable profit. I am not sure if it is accurate to say taxpayers are actually paying for it.

Just to be clear, I completely disagree with how easily people access loans. But I want to be sure our assumptions are accurate.
 
Not quite that simple. They make money when borrowers are reliable and pay off their loans. They lose a good amount on defaults and loan repayment programs. There are a lot of new analyses out there concerning ballooning graduate debt and how it is erasing the profit made by undergrad loan issuance. And, the PSLF program is relatively new, but I imagine that it is not exactly cost neutral, especially when you have people with 250k+ in debt paying a small monthly fee and getting most of that erased.
 
WisNeuro said:
Not quite that simple. They make money when borrowers are reliable and pay off their loans. They lose a good amount on defaults and loan repayment programs. There are a lot of new analyses out there concerning ballooning graduate debt and how it is erasing the profit made by undergrad loan issuance. And, the PSLF program is relatively new, but I imagine that it is not exactly cost neutral, especially when you have people with 250k+ in debt paying a small monthly fee and getting most of that erased.
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According to this analysis it is the opposite of what you say with regard to ug vs. grad loans and profitability. They argue that because it is so profitable that the government should leave it to the private sector.

http://www.forbes.com/sites/jeffrey...ment-should-get-out-of-student-loan-business/

To date PSLF has cost taxpayers $0. We'll have to see how much is actually being forgiven when people start collecting. Do we know how many have signed up already?
 
I haven't looked at this extensively, but anyone know where data like the default rate, net profit, breakdown by types of loans might be available? I always hear this talk of burden on taxpayers but I'd like to see the data. One could argue taxpayer backed loans are actually profiting off of students too depending on the data.
 
If I understand it correctly, schools profit most and have little incentive to control tuition, government profits on interest despite some defaults, and it's the student who loses (particularly those making bad choices, which are on them).
 
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Thanks for the articles, Wis. I think you and I and most of the more established posters on SDN would agree that the student loan system as is will not be sustainable. Students have too easy of access to loans without safeguards in place, but remain on the hook for the debt even if they made very poor choices. Their responsibility is one component but the easy access is another issue that will hopefully get reformed at some point. I agree with others that have indicated that making loans dischargeable in bankruptcy would make lenders more risk-averse, and that would probably be a good way for the system to correct itself over time. I'd consider more of the undergraduate subsidized options to be important to keep around for folks to provide access to those who don't traditionally get it, but the free-for-all that we have does not work out.

What I take issue with is folks walking around assuming that they are paying things that they might not be actually paying for. I like the Bloomberg article you posted but it still highlights how we have been profiting (the US Government) on loans for quite some time now, and trends in borrowing are making it less profitable (not necessarily a loss at this stage). I might be wrong here, but from what I understand it is not like someone's tax dollars go into a fund that then gets transferred to Suzi Joe Student's account - we borrow money at a lower rate and then charge students a higher rate. Taxpayers take on liability but to date the system has been profitable. That is a different animal to me than taxpayers that pay for federal government employee salaries (e.g., yours, ergs, AA's, mine) directly. I think people make the mistake of conflating these two concepts.

The Bloomberg article you posted noted that the system is estimated to continue to be profitable until 2025. I'd be interested in some more specific breakdowns for graduate education borrowers that engage in the income-based repayment systems. If you are a high earner or are married you pay a lot monthly anyways in these systems. So most MDs and any successful folks in other graduate professions are going to be paying back their loans before they are forgiven. Those that do take the whole 25 years will ultimately still pay taxes on what they get back, which certainly does not make up the difference but depending on their income, the actual hit on the US government is going to vary. At this stage, a lot of this is speculation. I think that once the system nets a loss instead of a profit, things will change. PSLF is already under siege in budgetary discussions with a cap of 57K or so on the table as a proposal.

So as a taxpayer, we've made money on the student loan system. We have to pay attention to projections and the system is certainly broken. But I personally feel more entitled to anger if I hear about a VA psychologist that is not using evidence-based practices than I am about an individual that has made tons of poor loan decisions. We are paying for the VA psychologist directly. Hopefully we won't give students an opportunity to make those bad loan decisions and can create some reasonable limits and safeguards to make the system sustainable.
 
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