How much is/is any debt okay for a psych PhD?

[futureapppsy2]

I've read (and written myself) the reasons why one shouldn't take on debt for a psych PhD, but I was wondering if there is any "acceptable" level of debt that people think is managable. I'm deciding between two programs--one that would likely require $0 debt (assuming my GAship remains intact for all four years) and another that would likely require $15k-30k in total debt (smaller stipend and higher COL area). I'm generally very debt averse and have no debt from undergrad, but in this case, the program that would require debt feels like a better fit, and I'm wondering if a small level of debt may be worth it.

So, is any level of debt "acceptable" for a psych PhD? If yes, what do you think the cut-off for such debt would be?

 

[Featheredwyngs]

I've asked myself the same question.

I think I could live completely off of the stipend I've been offered, but I think maybe 2k extra a year could make me much more comfortable...

I'm sure there is a more objective mathematical way to figure this out - may be by estimating what your future income will be once you have a Ph.D. (conservatively) and then figuring out what percentage of that you are willing to pay a year and for how long and then that be your max debt. E.g., Salary: 70k, willing to pay 5% of that a year (i.e., 3.5k), and only want to do that for 5 years = 17.5 k in loans (keeping in mind this will include whatever you will have in interest). ...Does that make any sense?

My gut feeling though (for my specific situation only) - is that for a PhD program that will take me maybe 5-6 years... I would maybe do 2k a year... so 10-12k is what I'd want to graduate with in loans max.

Your level will need to be higher if the COL makes it necessary (whereas with me it doesn't, making it more of a luxury than a necessity). I think some people will say that 15-30k in loans may not be so bad... I don't have any loans from undergrad either, so loans make me nervous and sound heftier to me than they may realistically be.

 

[JockNerd]

I'm sure there is a more objective mathematical way to figure this out - may be by estimating what your future income will be once you have a Ph.D. (conservatively) and then figuring out what percentage of that you are willing to pay a year and for how long and then that be your max debt. E.g., Salary: 70k, willing to pay 5% of that a year (i.e., 3.5k), and only want to do that for 5 years = 17.5 k in loans (keeping in mind this will include whatever you will have in interest). ...Does that make any sense?

Not really

If you're estimating a 70k gross, your net is much, much different from that. Taxes will take a big chunk and suddenly 3.5k seems like a lot more, especially when you're also paying for a condo/house/apartment, car, and living expenses.

After 5 years, a 17.5k loan is more like 20k, even at a good interest rate. It goes up non-linearly as the amount of the loan increases (because your payments take up more of the interest and do less damage to the principal). So, you're paying maybe 4k per year on that loan, and making, oh, let's say, 55k after taxes (something something Obama something something). Now your monthly income is something like 4500, and you're sucking up about 350 paying for that loan. So, definitely not as bad as taking 100k in loans to get into a nonfunded program, but still not a fun place to be.

Depending on COL and such, stipends can be more or less livable--$20k makes you a king at Iowa State and a pauper at SUNY. So, the loans might really be necessary to live in grad school. But, also consider just living like a student for that time, and avoiding loans altogether--you'll have plenty of loans when you get out.

 

[Markp]

I've read (and written myself) the reasons why one shouldn't take on debt for a psych PhD, but I was wondering if there is any "acceptable" level of debt that people think is managable. I'm deciding between two programs--one that would likely require $0 debt (assuming my GAship remains intact for all four years) and another that would likely require $15k-30k in total debt (smaller stipend and higher COL area). I'm generally very debt averse and have no debt from undergrad, but in this case, the program that would require debt feels like a better fit, and I'm wondering if a small level of debt may be worth it.

So, is any level of debt "acceptable" for a psych PhD? If yes, what do you think the cut-off for such debt would be?

30k of total of graduate debt is really noise. If it's a better fit, I would go for it. I would first play the "is there any more funding available, I'm having a tough time choosing between school x and school y" game. However if the program with the additional debt is really a much better fit, then go for it.

Remember this will impact your career trajectory. If you are at a better program for what you want to accomplish, your long term success may outweigh any downsides associated with debt. I agree with JN's advice, as I am really anti-debt as well, but with a $70k salary your net is not too bad either. Swinging a $300 a month payment with even a $1500 bi-weekly net is just not a problem. Keep your eye on the target as accrue as little debt as possible... but the right program is worth it.

Remember, there are additional scholarship opportunities available as well, this can help reduce the amount of debt you accrue.

Mark

 

[futureapppsy2]

The stipend guaranteed to me for year 1 is a partial stipend (7k), and most students find hourly RA work to supplement that--and second, third, and fourth year stipends are often higher, "full" stipends--but it's not guaranteed and when thinking about about debt, I find it most helpful to look at the "worst case scenario."

Thanks for the input!

 

[PsychPhDStudent]

I think it's just a really personal decision. Maybe you can ask current students in those programs how they feel about their funding level? Also, as others have mentioned, look into other sources of funding (eg scholarships) that may help later on.

Personally, I was not willing to incur any debt so that was a factor in making my own decision (and I only applied to programs that would allow for that).

 

[Markp]

The stipend guaranteed to me for year 1 is a partial stipend (7k), and most students find hourly RA work to supplement that--and second, third, and fourth year stipends are often higher, "full" stipends--but it's not guaranteed and when thinking about about debt, I find it most helpful to look at the "worst case scenario."

Thanks for the input!

It absolutely makes sense to make a worst case analysis and then ask yourself if you could live with that outcome. So yes, makes sense to me. Good luck with everything.

Mark

 

[worry]

30k of total of graduate debt is really noise. If it's a better fit, I would go for it. I would first play the "is there any more funding available, I'm having a tough time choosing between school x and school y" game. However if the program with the additional debt is really a much better fit, then go for it.

Remember this will impact your career trajectory. If you are at a better program for what you want to accomplish, your long term success may outweigh any downsides associated with debt. I agree with JN's advice, as I am really anti-debt as well, but with a $70k salary your net is not too bad either. Swinging a $300 a month payment with even a $1500 bi-weekly net is just not a problem. Keep your eye on the target as accrue as little debt as possible... but the right program is worth it.

Remember, there are additional scholarship opportunities available as well, this can help reduce the amount of debt you accrue.

Mark

Personally, I would go with the program that is the better fit. As Mark said, if the program is better for you, you will pobably end up getting a better internship and/or career opportunities in the long run. Also, if it's a better fit you're going to enjoy the program more, and it will be more of what you're wanting versus more money and not so much what you're wanting... just my two cents.

 

[joonscribble]

I'd put in my vote for the better fit program. As worry said, a better fit will most likely mean you'll be happier, be more productive and will lead to better opportunities.

And thinking long term, your grad school sets up the rest of your career so even if you do have debt upon exiting, if your career flourishes thanks to the investment you'll eventually be able to pay it back.

I've heard some truly large numbers from people who are currently in graduate school and in debt because of it. The numbers you've estimated seem small to me in comparison though people's relationships with debt and money all vary. But just to let you know that I've heard larger numbers and these people seem incredibly relaxed about it.

 

[zzzz2]

I've read (and written myself) the reasons why one shouldn't take on debt for a psych PhD, but I was wondering if there is any "acceptable" level of debt that people think is managable. I'm deciding between two programs--one that would likely require $0 debt (assuming my GAship remains intact for all four years) and another that would likely require $15k-30k in total debt (smaller stipend and higher COL area). I'm generally very debt averse and have no debt from undergrad, but in this case, the program that would require debt feels like a better fit, and I'm wondering if a small level of debt may be worth it.

So, is any level of debt "acceptable" for a psych PhD? If yes, what do you think the cut-off for such debt would be?

I suggest calling Suze Orman's "Can I afford it?" segment. I believe she will give you a concise and concrete answer. And I would love to hear what she will say.

 

[futureapppsy2]

I suggest calling Suze Orman's "Can I afford it?" segment. I believe she will give you a concise and concrete answer. And I would love to hear what she will say.

I love "Can I afford it?"

I talked to my PI about it today and she said that the cheaper/debt free option seems better, due to the very nice stipend I'll get first year (~30k) and the connections I could get through the GAship. It's a very tough decision, and one I need to make within the week (in order to send in fellowship paperwork, etc).

Thanks again for the input!

 

[PsycOut]

I love "Can I afford it?"

I talked to my PI about it today and she said that the cheaper/debt free option seems better, due to the very nice stipend I'll get first year (~30k) and the connections I could get through the GAship. It's a very tough decision, and one I need to make within the week (in order to send in fellowship paperwork, etc).

Thanks again for the input!

Suze would probably give you a "Suze Smackdown" and say you can't afford to go at ALL!!!

If not, then the debt free option ... she's always talking about nutty parents who send their kids to "expensive" private schools when they can get a great education at a state school, etc.

My thoughts are -- what are you willing to sacrifice in order to go to the "better fit" program? Are you willing to put off owning a home for a few years? Are you willing to live as a "grad student" for a few extra years after you finish up? After 6 years of poverty you may really be kicking yourself for taking on debt when you simply want to be a "grown up" ... that being said, i don't think $30K is that much money. This is a good way to take on debt (i personally don't think all debt is evil); if you are responsible with it and truly manage it as a way to invest in your future then go for it!

I LOVE Suze, of course ... although she's not perfect

 

[katciao]

I agree with virtually all of the responses so far. Based on my sister's experience as a self-employed clinical psychologist and my experience deciding between MBA (finance) programs several years ago, I have a few things to add.

Which position do you see yourself in after graduation? What is the current average salary in that position? Where do you think you might live after graduation? If possible, talk to psychologists who are doing what you think you might do where you might live after you finish the PhD.

I took the "cheaper" option in deciding on business schools (MBA). In hindsight, I'm not sure that that was a good idea. I didn't like the program (on the west coast) nearly as much as I liked the ones on the east coast. The few job ads directed at my class were for jobs that I didn't think were a good fit for more interests on the west coast, where I did not want to live. I like you, did not incur debt in undergrad and have a fairly debt-averse personality. $30k is not the hugest debt load I've encountered, esp. for a doctoral program, but it's not nothing, so I guess the main question is how much better of a fit is the program that currently feels like a better fit.

Another thing to keep in mind is that your opinion of a program may change over time. How sure are you that the "better fitting" program will still be a better fitting program for you in five or more years?

Finally, it seems to me that you have two attractive offers. I don't think that you can go really wrong with either choice!

 

[Therapist4Chnge]

Student loans have historically been looked at as "good debt", because it generally meant a higher earning potential, and eventually a great net gain. Things are very different now. The cost of schooling (undergraduate and graduate) has jumped, and the cost to pay back each dollar has increased as interest rates rise.

From a purely economic standpoint, most graduate school education is not "worth" it anymore, but there is much more than just $'s to consider. There will always be jobs where a person with a bachelor's level degree can make a good wage, though the person may be miserable. Most of us went into psychology for other reasons than money, and those who went in for money definitely added a few too many zeros in their head.

From an economic perspective I made a horrid choice (left a $100k+ career path to work for next to nothing for 8 years,forfeiting probably ~$1.5 million in earnings and retirement) Though, from a more holistic perspective, my quality of life will eventually surpass where I would have been in my prior career, regardless of how much money I made. A number of former lawyers on here have shared similiar perspectives, so I am far from the only one. Eventually I'll be doing what I want, when I want, and still be making a decent wage, and that is worth much more to me than having a bunch of $ in a bank, and being miserable every day earning it.

 

[futureapppsy2]

Another thing to keep in mind is that your opinion of a program may change over time. How sure are you that the "better fitting" program will still be a better fitting program for you in five or more years?

That's a good point--the "better fit" program is much more narrowly focused in terms of its training and unapologetically so--most training is school-based and prevention-focused and there's not available training in neuro, for example, while the other program seeks to provide a strong range of training options (neuro, health, etc.), to its students). I'm comfortable with the scope of the "better fit" program now, and the research match is better, but I don't know if that would always be the case.

I think the reasons that I'm attracted to the "better fit" program are both realitively unimportant ones (e.g., the ability to do a practicum at an immersion school in my second language, how much I clicked with the current grad students, etc.) and the fact that I generally loved the philosphy of the program and the high emphasis put on serious, grant-funded research by the faculty (something that was somewhat lacking at my undergrad). I think I could be happy and successful at the other program, but it wouldn't be as seamless of a "fit," and I guess I'm having a hard time putting a number on how much that "seamlessness" of program and research fit is worth to me. Either way, it will hard to turn the other program down.

Thanks again, so much, for the input.

 

[jnine]

Student loans have historically been looked at as "good debt", because it generally meant a higher earning potential, and eventually a great net gain. Things are very different now. The cost of schooling (undergraduate and graduate) has jumped, and the cost to pay back each dollar has increased as interest rates rise.

From a purely economic standpoint, most graduate school education is not "worth" it anymore, but there is much more than just $'s to consider. There will always be jobs where a person with a bachelor's level degree can make a good wage, though the person may be miserable. Most of us went into psychology for other reasons than money, and those who went in for money definitely added a few too many zeros in their head.

From an economic perspective I made a horrid choice (left a $100k+ career path to work for next to nothing for 8 years,forfeiting probably ~$1.5 million in earnings and retirement) Though, from a more holistic perspective, my quality of life will eventually surpass where I would have been in my prior career, regardless of how much money I made. A number of former lawyers on here have shared similiar perspectives, so I am far from the only one. Eventually I'll be doing what I want, when I want, and still be making a decent wage, and that is worth much more to me than having a bunch of $ in a bank, and being miserable every day earning it.

there's a fascinating psychosocial construct in there somewhere!

 

[jnine]

just an observation that may or may not be accurate, but (IMO) we really havent heard you give personally meaningful reasons for program "B". on the other hand, your second paragraph sounds pretty inspired to me

That's a good point--the "better fit" program is much more narrowly focused in terms of its training and unapologetically so--most training is school-based and prevention-focused and there's not available training in neuro, for example, while the other program seeks to provide a strong range of training options (neuro, health, etc.), to its students). I'm comfortable with the scope of the "better fit" program now, and the research match is better, but I don't know if that would always be the case.

I think the reasons that I'm attracted to the "better fit" program are both realitively unimportant ones (e.g., the ability to do a practicum at an immersion school in my second language, how much I clicked with the current grad students, etc.) and the fact that I generally loved the philosphy of the program and the high emphasis put on serious, grant-funded research by the faculty (something that was somewhat lacking at my undergrad). I think I could be happy and successful at the other program, but it wouldn't be as seamless of a "fit," and I guess I'm having a hard time putting a number on how much that "seamlessness" of program and research fit is worth to me. Either way, it will hard to turn the other program down.

Thanks again, so much, for the input.

 

[Luxe]

Perfect debt would be $100,199.98

 

[Markp]

From an economic perspective I made a horrid choice (left a $100k+ career path to work for next to nothing for 8 years,forfeiting probably ~$1.5 million in earnings and retirement) Though, from a more holistic perspective, my quality of life will eventually surpass where I would have been in my prior career, regardless of how much money I made. A number of former lawyers on here have shared similiar perspectives, so I am far from the only one. Eventually I'll be doing what I want, when I want, and still be making a decent wage, and that is worth much more to me than having a bunch of $ in a bank, and being miserable every day earning it.

Funny how many of us have stopped chasing dollars that left us jaded. Doesn't mean we've taken a vow of poverty either... I'll take the quality of life over a few dollars.

Mark

 

[Therapist4Chnge]

Funny how many of us have stopped chasing dollars that left us jaded. Doesn't mean we've taken a vow of poverty either... I'll take the quality of life over a few dollars.

Mark

Exactly. I'm trading most of a decade for the opportunity to increase my quality of life. I don't have a problem making money, I have a problem needing to pay back my loans from undergrad and graduate school.

 

[ILGirl]

I think the reasons that I'm attracted to the "better fit" program are both realitively unimportant ones (e.g., the ability to do a practicum at an immersion school in my second language, how much I clicked with the current grad students, etc.) .

I think clicking with other graduate students is pretty important. You're going to be around these individuals for many years.

 

[futureapppsy2]

just an observation that may or may not be accurate, but (IMO) we really havent heard you give personally meaningful reasons for program "B". on the other hand, your second paragraph sounds pretty inspired to me

I guess the reasons for B are more concrete--zero debt, strong match history, GAship *perfectly* in line with my interests, close to family, possibility for great connections through said GAship, etc.

 

[ILGirl]

Ten years from now are you going to be upset that you didn't choose your first choice school? Are you always going to be wondering what if? From what I've noticed, correct me if I'm wrong, you would go to the school with the higher cost of living, if you had a stipend which equaled the $0 debt school.

I cannot advise you to go to the school in which you would take on some debt because that is a very personal decision. Only you know if you can handle taking on some debt to further your education.

But, personally, would I be willing to do it? Yes, if I absolutely loved the school and felt it was the perfect fit for me, I definitely would be willing to take on that debt. For me, the "what ifs" would get to me more than taking on the debt that you described.

But, for you, it could be the opposite.

Good luck! The good news: They both sound like good programs for you. : )

 

[futureapppsy2]

Ten years from now are you going to be upset that you didn't choose your first choice school? Are you always going to be wondering what if? From what I've noticed, correct me if I'm wrong, you would go to the school with the higher cost of living, if you had a stipend which equaled the $0 debt school.

I cannot advise you to go to the school in which you would take on some debt because that is a very personal decision. Only you know if you can handle taking on some debt to further your education.

But, personally, would I be willing to do it? Yes, if I absolutely loved the school and felt it was the perfect fit for me, I definitely would be willing to take on that debt. For me, the "what ifs" would get to me more than taking on the debt that you described.

But, for you, it could be the opposite.

Good luck! The good news: They both sound like good programs for you. : )

Thanks. Yes, like I said before, they are both great school, and I'm extremely lucky to have this choice and feel I could be happy at either! Part of it is that I'm just not very good at making really long-term decisions like this lightly--I made sure not to "fall in love" with any school throughout the process and so now, making this decision is five months worth of reserved judgment at once. FWIW, I had a similar-ish approach-approach conflict when picking my undergrad, and it was similarly difficult. (And I ended up happy ).

 

[futureapppsy2]

I've made my decision--PM me if curious!

Thank you *so much* for your input. You all really helped me process my decision in full (and it was a hard one). Thank you!

 

[ILGirl]

I've made my decision--PM me if curious!

Thank you *so much* for your input. You all really helped me process my decision in full (and it was a hard one). Thank you!

Congrats!!! It feels really good to make a decision, doesn't it?

 

[student til 30]

.

 

[Therapist4Chnge]

Beware that any gov't program can be cut with a flick of the wrist of a horse-trading politician. I wouldn't plan on any payback program, though when you are on the other side I would definitely look to use them.

 

[futureapppsy2]

Congrats!!! It feels really good to make a decision, doesn't it?

Yes, it does!