A fun little graphic about debt

[LadyHalcyon]

Was researching about student loan debt for psychologists and this website popped up first. Thought the attached pic was cute, and terrifying.

Also.....does anyone know of someone who has actually received PSLF? I have honesty only heard of horror stories where people think they are going to get it and then something goes wrong somewhere in the process.

Got debt?View attachment debt.pdf

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[Sanman]

That APA, trying to crush our collective dreams and keep us down.

Nope, don't know anyone that actually made it through the PSLF process.

 

[LadyHalcyon]

That APA, trying to crush our collective dreams and keep us down.

Nope, don't know anyone that actually made it through the PSLF process.

I know. I'm feeling sad . And a similar article from apa published in 2011 showed the average debt was significantly lower. It just keeps climbing and climbing.

Every single person I know who has tried to get PSLF has gotten hung up in the red tape. Their paperwork gets messed up, they fail to recertify, or some other thing goes wrong. One person I know thought he was going to have his debt forgiven only to find out the 10 years didn't count because he failed to consolidate.. Or something like that. Is PSLF just this mythical creature that doesn't really exist? Maybe it was only created by the government to encourage students to take out more loans. Blah

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[PsyDr]

Was researching about student loan debt for psychologists and this website popped up first. Thought the attached pic was cute, and terrifying.

Got debt?View attachment 239734

"How much will I earn? $65,000 median, full time non post doc salaries from 2010-2014."





The median income of truck drivers at like $70,0000. You could literally drop out of high school, get a CDL, and earn more than what psychologists make by 22 without all those pesky years of education.


I swear, one day I'm going to force everyone to actually work, and actually make money.

 

[LadyHalcyon]

"How much will I earn? $65,000 median, full time non post doc salaries from 2010-2014."





The median income of truck drivers at like $70,0000. You could literally drop out of high school, get a CDL, and earn more than what psychologists make by 22 without all those pesky years of education.


I swear, one day I'm going to force everyone to actually work, and actually make money.

Do it!!! But the question is... How?

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[LadyHalcyon]

Cool. Thanks!!

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[Justanothergrad]

The problem with reporting 'mean' debt or 'mean' earning is that it is dragged by outliers. This is especially problematic in discussions of debt as we have a clear bimodal distribution in terms of average debt accrued (e.g., none is ~25% and above 100k is approximately 25% as well; see graphic). This is an increasingly pronounced problem as predatory programs (typically, although not exclusively, PsyD) represent a larger and continually growing portion of the workforce. Around 40% have under 30k in debt - a manageable debt load, even if not ideal. The already extremely skewed distribution is likely pronounced further by historically including both accredited/non-accredited internships into a single description since we know that internship outcome is highly depedent on the starting quality of the program. The thing that matters most is not 'average' but what characteristics steady predict the 25% of folks who have zero debt.

FYI, Skew = 4.358


TLDR; never report means for a non-normal distrubtion kids- it violates a statistical assumption.

 

[LadyHalcyon]

That graphic is pretty outrageous. I can't even fathom going into hundreds of thousands of dollars of debt just for grad school. Damn.

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[Justanothergrad]

It caused me substantial anxiety to even create. For a truly frightening experience remember that reported debt excludes (1) any additional debt taken on during internship because of when the survey is distributed by APPIC and (2) any debt during undergrad or other graduate training not in psychology. Thus, this is likely not all of the debt held by graduates.

 

[LadyHalcyon]

"How much will I earn? $65,000 median, full time non post doc salaries from 2010-2014."





The median income of truck drivers at like $70,0000. You could literally drop out of high school, get a CDL, and earn more than what psychologists make by 22 without all those pesky years of education.


I swear, one day I'm going to force everyone to actually work, and actually make money.

Or how about this. As I type this, two men are installing crown molding in two rooms of my house. These rooms are 10x12. I already had the materials and the paint (failed DIY home project). I will pay them 500 bucks. It will take them TOPS two hours, but likely just one hour.

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[LadyHalcyon]

It caused me substantial anxiety to even create. For a truly frightening experience remember that reported debt excludes (1) any additional debt taken on during internship because of when the survey is distributed by APPIC and (2) any debt during undergrad or other graduate training not in psychology. Thus, this is likely not all of the debt held by graduates.

This is outrageous. I'm becoming increasingly anxious about my own debt, which is not 6 figures but VERY close. I was so stupid in undergrad. I am kicking my 18 year old self.

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[PsyDr]

Do it!!! But the question is... How?

Beyond $65k? Take medicare, which bills out at like $88/hr for psychotherapy. Do the thing where you see 6 patients a day for psychotherapy. That's $2640/week or around $10k/month. Split office rent and a billing service with like 2 other psychologists. Take a whole month off every year, and you're still at around $100k. That's not even including an assessment or group here and there. Or even more specialty stuff like marriage counseling, forensics, neuro, consulting, late hours, etc.

 

[LadyHalcyon]

Beyond $65k? Take medicare, which bills out at like $88/hr for psychotherapy. Do the thing where you see 6 patients a day for psychotherapy. That's $2640/week or around $10k/month. Split office rent and a billing service with like 2 other psychologists. Take a whole month off every year, and you're still at around $100k. That's not even including an assessment or group here and there. Or even more specialty stuff like marriage counseling, forensics, neuro, consulting, late hours, etc.

That's literally my exact plan.

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[Justanothergrad]

Some numbers to show what debt does with a few basic assumptions
1. Earning income with the mean
2. 2% increase in pay per year
3. No other debt
4. Starting career age of 30 (did a 25year career trajectory, but folks can easy expand for 30-35, whatever)

I'm in the lab with an undergrad RA right now and she finds this "painful" and "unsettling"

 

[PsyDr]

That's literally my exact plan.

You should try for better or try to innovate. I doubt this model is going to last another 50 years.

 

[Sanman]

You should try for better or try to innovate. I doubt this model is going to last another 50 years.

If you have patience, my non-innovative plan is this. However, I plan on owning real estate including the office building as a second income stream. I have more innovative plans that need to fail first.

 

[Ollie123]

Don't have the actual numbers to back it up, but one of the things that I find most unsettling is I would wager there is an inverse relationship between debt load and salary (i.e. those with the most debt are stuck in the lower paying jobs). 65k is unfathomable to me. 90k is about the norm starting salary in AMCs these days, even in mid-low COL areas. And the benefits are usually impressive (my total comp adds on about 30-35%). Yet these jobs are tough to get coming from the types of program that come with a 200k cost. I don't think we have a single grad from the usual suspects in my entire department.

Wife and I are DINKs, both earning WELL above the median numbers in a mid COL area. We're fine, but I still feel like we're playing financial catchup after all the years in school. And most of that catchup (saving the down payment for the house, hardcore retirement savings) would have been far more difficult with even a $500/month loan payment, let alone a $2000/month one.

 

[Justanothergrad]

Don't have the actual numbers to back it up, but one of the things that I find most unsettling is I would wager there is an inverse relationship between debt load and salary (i.e. those with the most debt are stuck in the lower paying jobs). 65k is unfathomable to me. 90k is about the norm starting salary in AMCs these days, even in mid-low COL areas. And the benefits are usually impressive (my total comp adds on about 30-35%). Yet these jobs are tough to get coming from the types of program that come with a 200k cost. I don't think we have a single grad from the usual suspects in my entire department.

Wife and I are DINKs, both earning WELL above the median numbers in a mid COL area. We're fine, but I still feel like we're playing financial catchup after all the years in school. And most of that catchup (saving the down payment for the house, hardcore retirement savings) would have been far more difficult with even a $500/month loan payment, let alone a $2000/month one.

Yup. The non-equal distribution of wages is also likely compacting this trend

My salary puts me in the ~90% for new assistant profs at R1s (estimated since APA releases means but not SD for new faculty salaries - an odd statistical absence one has to note) and I have a nice package to go along with it and 0 debt. Still, I'm playing catch up from lost income over the years of grad school. Compound interest over time on small retirement is a major loss- folks need to be doing EVERYTHING they can to put some money in retirement during graduate school. It's not always possible, but its a major long term gain.

 

[Sanman]

Yup. The non-equal distribution of wages is also likely compacting this trend

My salary puts me in the ~90% for new assistant profs at R1s (estimated since APA releases means but not SD for new faculty salaries - an odd statistical absence one has to note) and I have a nice package to go along with it and 0 debt. Still, I'm playing catch up from lost income over the years of grad school. Compound interest over time on small retirement is a major loss- folks need to be doing EVERYTHING they can to put some money in retirement during graduate school. It's not always possible, but its a major long term gain.

Actually, I find grad school to be the worst time to put money away for retirement. I didn't put anything away then. However, I contributed to a Roth IRA every year from ages 14-21.

 

[Ollie123]

Had some money sitting in a low-yield savings account at a brick & mortar during grad school because stupid. Didn't put a penny in retirement. Definitely regret it, but extremely grateful to be in a position I can afford to make up some lost ground now.

 

[Justanothergrad]

Actually, I find grad school to be the worst time to put money away for retirement. I didn't put anything away then. However, I contributed to a Roth IRA every year from ages 14-21.

Yeh, well- that would be ideal. Not having that base egg at the start of a career is problematic though. I had a second job in grad school and used it to ensure I was able to live how I wanted and then put some into my already existing IRA-roth (cause post tax when you make nothing is the way to go) just to grow it.

 

[DynamicDidactic]

I am using both graphics for teaching! Thanks @Magick91683 and @Justanothergrad

FWIW, the original graphic uses median debt, which is a very useful number for undergrads. I will show them the more detailed bar graph as well but undergrads need more simple info.

 

[LadyHalcyon]

I am using both graphics for teaching! Thanks @Magick91683 and @Justanothergrad

FWIW, the original graphic uses median debt, which is a very useful number for undergrads. I will show them the more detailed bar graph as well but undergrads need more simple info.

I REALLY wish this stuff would have been covered in both undergrad and grad school.

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[LadyHalcyon]

You should try for better or try to innovate. I doubt this model is going to last another 50 years.

Ack... Ok. Well firsts thing first is I have to get licensed so my plan is to take the EPPP in December. After I pass I'll be able to get licensed in one of that states I want to work. Then I can start doing forensic evals with my old supervisor and work toward abpp in forensic psychology.

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[LadyHalcyon]

Yup. The non-equal distribution of wages is also likely compacting this trend

My salary puts me in the ~90% for new assistant profs at R1s (estimated since APA releases means but not SD for new faculty salaries - an odd statistical absence one has to note) and I have a nice package to go along with it and 0 debt. Still, I'm playing catch up from lost income over the years of grad school. Compound interest over time on small retirement is a major loss- folks need to be doing EVERYTHING they can to put some money in retirement during graduate school. It's not always possible, but its a major long term gain.

I can't even begin to think about retirement. This stuff really stresses me out. I think I may need a financial planner or something.

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[Justanothergrad]

I can't even begin to think about retirement. This stuff really stresses me out. I think I may need a financial planner or something.

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It'd be wise to get comfortable with your own retirement planning. It may stress you out, but thats a poor reason to not be informed about it. You'll be more stressed later if you don't plan now. The more you know the better choices you can make. I'd suggest the Bogelhead strategy as a good starting point for learning key principles. Even if you're not trying to make enough to be the next bill gates, the ideas will put you in a good place with a stable future.

 

[Sanman]

It'd be wise to get comfortable with your own retirement planning. It may stress you out, but thats a poor reason to not be informed about it. You'll be more stressed later if you don't plan now. The more you know the better choices you can make. I'd suggest the Bogelhead strategy as a good starting point for learning key principles. Even if you're not trying to make enough to be the next bill gates, the ideas will put you in a good place with a stable future.

Very true. Being a bit of a financial geek, my take away from all the reading and strategies is that doing the simple stuff means you will be okay. The last 10% is the only stuff that is complicated. By simple stuff, I mean get comfortable with maxing out your 401k/IRA early in your earning years and keep doing that consistently until you retire. Stick that money into a diversified portfolio. There are many easy options for this. The 10% is when you have maxed out all the traditional avenues and still have more money. However, that is a good problem to have and no matter what you do from there you won't die broke.

 

[Justanothergrad]

Very true. Being a bit of a financial geek, my take away from all the reading and strategies is that doing the simple stuff means you will be okay. The last 10% is the only stuff that is complicated. By simple stuff, I mean get comfortable with maxing out your 401k/IRA early in your earning years and keep doing that consistently until you retire. Stick that money into a diversified portfolio. There are many easy options for this. The 10% is when you have maxed out all the traditional avenues and still have more money. However, that is a good problem to have and no matter what you do from there you won't die broke.

Yup.

I calculated it and I invested 20% of my earnings last year, including my match, into retirement, not counting the % in accessible savings accounts. I don't ever want to be poor again. Been there, done that, and I wasn't particularly impressed with the experience.

 

[LadyHalcyon]

Very true. Being a bit of a financial geek, my take away from all the reading and strategies is that doing the simple stuff means you will be okay. The last 10% is the only stuff that is complicated. By simple stuff, I mean get comfortable with maxing out your 401k/IRA early in your earning years and keep doing that consistently until you retire. Stick that money into a diversified portfolio. There are many easy options for this. The 10% is when you have maxed out all the traditional avenues and still have more money. However, that is a good problem to have and no matter what you do from there you won't die broke.

It's like you are speaking German to me. I need to do a lot of research on all these things because no one has ever taught me them

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[DynamicDidactic]

I can't even begin to think about retirement. This stuff really stresses me out. I think I may need a financial planner or something.

If I am accurate, I think you are on internship. If yes, I didn't think about retirement till my first real job, which was after a 2-year postdoc. We have some very savvy and committed savers on this forum, which I don't think represents most psychologists. Now that I have a real job I started actively thinking about retirement, which is funny. Things change a lot once you are actively working as opposed to barely getting by with stipend/internship/postdoc money. I was lucky that my job comes with a good state retirement plan. I also just bought my first home and that also makes me feel much more prepared for the future.

 

[Therapist4Chnge]

Had some money sitting in a low-yield savings account at a brick & mortar during grad school because stupid. Didn't put a penny in retirement. Definitely regret it, but extremely grateful to be in a position I can afford to make up some lost ground now.

Not investing during grad school/internship/fellowship was regrettable for me. I thought i’d make it up on the back-end, but the economy stalled and well...i’m playing catch-up. I can’t imagine doing this at <$100k/yr; we need to do better as a profession.

 

[Ollie123]

It's like you are speaking German to me. I need to do a lot of research on all these things

The Millionaire next door - Thomas Stanley
Bogleheads guide to investing - Lindauer
White coat investor - James Dahle

Can get them used for $30 total if not available via other means. Read them slowly and expect to go through them twice before you remember some of the nuance. If you follow the advice, you are probably 98% of the way to being on a (very) good financial path. There is a lot of posturing and complexity to the remaining 1% but it won't have much meaningful impact on your financial life in the grand scheme of things. I think folks worry about it more as a hobby than anything.

One key you will pick up on from the books is that paralysis and ignoring it is extremely common, but just about the worst thing you can do. Getting started early is hugely important. Good investing should be simple (until you get to the last 1-2% or so I reference above), so if it seems overly complicated it is probably bad advice.

PS - I got zero education in this too. Grew up in a lower middle class blue collar family that has now probably eeked into middle class by retirement. Any savings went in a savings account. Retirement came via pensions (Teamsters) and social security. No real career advice to be had and finances were never discussed.

I mention all this just to make a point that it doesn't need to be scary. It WILL seem overwhelming coming in with zero background. It was for me. Learning to do therapy was too. Both got easier. Both were worth it.

 

[LadyHalcyon]

The Millionaire next door - Thomas Stanley
Bogleheads guide to investing - Lindauer
White coat investor - James Dahle

Can get them used for $30 total if not available via other means. Read them slowly and expect to go through them twice before you remember some of the nuance. If you follow the advice, you are probably 98% of the way to being on a (very) good financial path. There is a lot of posturing and complexity to the remaining 1% but it won't have much meaningful impact on your financial life in the grand scheme of things. I think folks worry about it more as a hobby than anything.

One key you will pick up on from the books is that paralysis and ignoring it is extremely common, but just about the worst thing you can do. Getting started early is hugely important. Good investing should be simple (until you get to the last 1-2% or so I reference above), so if it seems overly complicated it is probably bad advice.

PS - I got zero education in this too. Grew up in a lower middle class blue collar family that has now probably eeked into middle class by retirement. Any savings went in a savings account. Retirement came via pensions (Teamsters) and social security. No real career advice to be had and finances were never discussed.

I mention all this just to make a point that it doesn't need to be scary. It WILL seem overwhelming coming in with zero background. It was for me. Learning to do therapy was too. Both got easier. Both were worth it.

Thank you so much!

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[LadyHalcyon]

If I am accurate, I think you are on internship. If yes, I didn't think about retirement till my first real job, which was after a 2-year postdoc. We have some very savvy and committed savers on this forum, which I don't think represents most psychologists. Now that I have a real job I started actively thinking about retirement, which is funny. Things change a lot once you are actively working as opposed to barely getting by with stipend/internship/postdoc money. I was lucky that my job comes with a good state retirement plan. I also just bought my first home and that also makes me feel much more prepared for the future.

I just graduated and am completing my post - doc now. And I think I'm also a little rattled bc I have been in this student role for so long and this transition feels a tad overwhelming.

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[PsyDr]

@Magick91683 @Ollie123


FIRECalc: Why another retirement calculator?

 

[LadyHalcyon]

Well here is the answer to one of my questions, kinda:

"As of December 31, 2017, there are 802,040 cumulative Public Service Loan Forgiveness borrowers.
Since 2012, 1,361,184 employment certification forms have been approved and 705,362 have been denied."


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[Pragma]

Well here is the answer to one of my questions, kinda:

"As of December 31, 2017, there are 802,040 cumulative Public Service Loan Forgiveness borrowers.
Since 2012, 1,361,184 employment certification forms have been approved and 705,362 have been denied."


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You submit those forms every year. Could be people submitting with employment that doesn’t qualify.

 

[LadyHalcyon]

You submit those forms every year. Could be people submitting with employment that doesn’t qualify.

True. I know people who submit these forms. I have yet to know someone who has received the money after 10 years.

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[MAClinician]

True. I know people who submit these forms. I have yet to know someone who has received the money after 10 years.

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I thought I read PSLF didn’t become an option until 2007, so the first group wouldn’t be eligible until 2017. I could be very wrong though

 

[LadyHalcyon]

I thought I read PSLF didn’t become an option until 2007, so the first group wouldn’t be eligible until 2017. I could be very wrong though

That I don't know... I shall go Googling

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[LadyHalcyon]

I thought I read PSLF didn’t become an option until 2007, so the first group wouldn’t be eligible until 2017. I could be very wrong though

At least one person has received it.

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[Pragma]

I thought I read PSLF didn’t become an option until 2007, so the first group wouldn’t be eligible until 2017. I could be very wrong though

Yeah people just became eligible for forgiveness recently.

 

[LadyHalcyon]

Public Servants Do Get Student Loan Forgiveness. Meet One of the First.

Meet the one guy who has gotten it!

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