Jan 12, 2013
223
84
Philadelphia, PA
Status
Occupational Therapy Student
So I'm sure this is something all of us applying to grad school are pretty concerned about! I have been researching this and have a whole bunch of questions, so was hoping current OT students or current OTs might be able to offer a bit of insight, or creative solutions to making grad school affordable. I know in the end it'll all be worth it, even with debt, but I want to be smart going into this!

First of all, Loans:

It definitely sounds like 99% of aid available is in the form of loans, the federal ones being Stafford, Perkins and Graduate Plus. From what I understand, Stafford pays for up to 20,000, and Graduate Plus can cover the rest of expenses including cost of living expenses. So what is the Perkins loan and how does it differ? I haven't really researched private loans, but from what I can tell the benefits are minimal compared with federal, especially considering some loan forgiveness plans in place.

Public Service Loan Forgiveness:

I know there is a Public Service Loan Forgiveness Plan that after 120 monthly payments (essentially 10 years) working at least 30 hrs a week as an OT in certain settings, whatever is left in federal loans, including interest, is forgiven. It seems I would probably have to take approx. $100,000 of loans out for grad school, so this sounds like it would make a huge difference for me. How permanent is this and what are the odds of it disappearing by the time I would need it? Also, it sounds like it really covers a majority of OT work - is that correct, or would it greatly limit the amount of employers/settings I could pursue?

The student aid website also says the Public Servie Loan Forgiveness Plan can be combined with the Income-Based Repayment plan, for lower cost monthly payments (whatever is left in 10 years would still be completely forgiven.) To qualify for the IBR, you have to have a partial economic hardship at the time of application, even though if after you have IBR and no longer have economic hardship, you can stay on it. It doesn't make a lot of sense to me and maybe I'm wrong, but sounds like if you start with the standard repayment plan and have economic hardship down the line, you can't switch it. As a single person with no additional debt, would it be difficult to qualify? Would it be worth it then to take a lesser paying job right out of grad school in order to qualify?

Additional Loan Forgiveness/Cancellation:

It took a lot of digging, but I found a few places that mention an additional loan forgiveness program for OTs, where for the first 5 years of repayment up to $2000 a year ($10,000 overall) can be forgiven if you work with children, adolescents or veterans. Anyone have any additional info on this? AOTA's website just said this:

"AOTA recently succeeded in getting occupational therapy recognized as a profession of national need making occupational therapists who work with children, adolescents, and veterans eligible for additional loan forgiveness. The program will authorize loan forgiveness for up to $10,000 in loans over a 5 year period. This program is still in the process of being designed and implemented, and information will be posted on the AOTA Web site as it becomes available."

This website (http://ifap.ed.gov/sfahandbooks/attachments/0304Vol5Ch6.pdf) says that schools may cancel 100% of a Perkins Loan for full-time "qualified professional provider of early intervention services
in a public or other nonprofit program under public supervision." at the bottom of the page, it defines "qualified professional provider" to include OT, but at the same time this seems to be a part of the "Teacher Loan Cancellation" and it says OTs don't count as teachers. Can anyone offer some insight to this? Does this mean school-based OTs may have their loans forgiven or cancelled by their employer?

Grants:

I have heard that certain hospitals/employers offer to pay for tuition in exchange for working 2-3 years for them after graduating, because they are in rural areas that have a hard time attracting OTs.I have searched online but haven't really found many examples of this. Is this something that used to be done but isn't as much anymore? Does anyone know of specific employers who offer this, or know anyone who has done this and feels it was worth it or not?

Aside from AOTA and specific schools/states with scholarships, there really doesn't seem to be much out there for OTs in the way of grants. Anyone know of a good place to search, or any that exist in Pennsylvania? Are there any out there at all for first year OT students? From what little I've seen out there, they all seem to apply to 2nd year or graduating students.

Websites:

I know this was super long but hopefully it helped some of you trying to figure this out too. If anyone else has any info, websites or experience to share please do! Thanks!

http://www.aota.org/en/Education-Careers/Find-School/Aid/Loan-Forgiveness.aspx
http://www.professionaldevelopmentpath.com/occupational-therapy-schools-costs.html
http://ifap.ed.gov/sfahandbooks/attachments/0304Vol5Ch6.pdf
http://studentdoctor.net/2013/11/six-smart-ways-to-pay-off-your-student-loans/
http://www.finaid.org/loans/forgiveness.phtml
 
May 18, 2012
92
34
Status
Great info. Thanks for the post. I sure hope some of these loan forgiveness programs are still around when we graduate. Even assuming I get a top-paying OT job (which is unlikely), it's still going to take me forever to pay these off.
 
OP
lcs2074
Jan 12, 2013
223
84
Philadelphia, PA
Status
Occupational Therapy Student
Great info. Thanks for the post. I sure hope some of these loan forgiveness programs are still around when we graduate. Even assuming I get a top-paying OT job (which is unlikely), it's still going to take me forever to pay these off.
I know! Apparently they tried to pass a bill in 2012 that would have lowered/capped the amount students repay in their monthly payments, AND would have lowered the repayment time for the Public Service Forgiveness Loan from 120 payments (10 years) to 60 payments (5 years). Getting out of debt in 5 years instead of 10 would make such a HUGE difference. Unfortunately Congress killed it... :(

http://www.usnews.com/education/blogs/student-loan-ranger/2012/03/21/learn-what-the-student-loan-forgiveness-act-could-mean-for-you
https://www.govtrack.us/congress/bills/112/hr4170#overview
 
Oct 29, 2013
33
1
Status
Pre-Rehab Sci [General]
lcs2074- thanks for taking the time to post all of that. Super helpful!
 
May 31, 2013
113
29
Status
DPT / OTD
Public Service Loan Forgiveness:

I know there is a Public Service Loan Forgiveness Plan that after 120 monthly payments (essentially 10 years) working at least 30 hrs a week as an OT in certain settings, whatever is left in federal loans, including interest, is forgiven. It seems I would probably have to take approx. $100,000 of loans out for grad school, so this sounds like it would make a huge difference for me. How permanent is this and what are the odds of it disappearing by the time I would need it? Also, it sounds like it really covers a majority of OT work - is that correct, or would it greatly limit the amount of employers/settings I could pursue?...

Additional Loan Forgiveness/Cancellation:

It took a lot of digging, but I found a few places that mention an additional loan forgiveness program for OTs, where for the first 5 years of repayment up to $2000 a year ($10,000 overall) can be forgiven if you work with children, adolescents or veterans. Anyone have any additional info on this?
So, I did a little digging to try and find out some more information about the different loan forgiveness plans you mentioned and to hopefully answer some of the questions you asked. Here is what I found:

Public Service Loan Forgiveness- I found a small fact sheet on the Public Service Loan Forgiveness Plan at: http://studentaid.ed.gov/sites/default/files/public-service-loan-forgiveness.pdf. This fact sheet was updated in fall of 2013, so all the information should be current. If I'm reading the information correctly, you would need to work as an OT in specific settings (looks like either government organizations and specific non-profits) to be eligible for the Public Service Loan Forgiveness Plan. I read somewhere (though I don't remember where) that you should ask during the hiring process if an employer qualifies. Other than simply asking during the interview process, I'm not sure how you would easily know which companies qualify.

Additional Loan Forgiveness- So, this one really sucks! Basically in 2008 Congress enacted the The Higher Education Opportunity Act. This act allowed for loan forgiveness of $2,000 a year for up to five years or a maximum of $10,000 of employees in fields designated as national need. Occupational therapists "employed full-time providing occupational therapy services to children, adolescents, or veterans" were determined to qualify for loan forgiveness through this act due to national need. (You can see the whole act here if you like: http://www.gpo.gov/fdsys/pkg/PLAW-110publ315/html/PLAW-110publ315.htm) Unfortunately for us, funds were never appropriated for this act and it looks like funding will not happen any time soon. According to the American Speech-Language-Hearing Association, (they would also qualify under this act as well), "It is unlikely that this program will receive any or even a modest amount of funding in the near future. There are many demands and constraints on the federal budget. Congress and the Obama Administration will weigh all of these priorities and determine which ones will receive funding." (You can read more of what the American Speech-Language-Hearing Association says on the topic here: http://www.asha.org/advocacy/FAQLoanForgiveness/#congress funding)

I hope that answers some of the questions about loan forgiveness that were mentioned. I did not find anything that spoke to whether or not the Public Service Loan Forgiveness Plan would be around for a long time.
 
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May 31, 2013
113
29
Status
DPT / OTD
Sorry, I forgot to add this to the last post.

Additional Loan Forgiveness/Cancellation:
This website (http://ifap.ed.gov/sfahandbooks/attachments/0304Vol5Ch6.pdf) says that schools may cancel 100% of a Perkins Loan for full-time "qualified professional provider of early intervention services in a public or other nonprofit program under public supervision." at the bottom of the page, it defines "qualified professional provider" to include OT, but at the same time this seems to be a part of the "Teacher Loan Cancellation" and it says OTs don't count as teachers. Can anyone offer some insight to this? Does this mean school-based OTs may have their loans forgiven or cancelled by their employer?
I took a look at the link, but it is from 2003-2004, so we should probably look for more current information regarding what is being said. Basically the page is saying that there appears to be a loan cancellation policy of Perkins loans for employees that work with early intervention children, high risk children, head start children, and other areas. From how I'm reading the information, teachers are discussed in one category, military in another, head start in another and so on. I think the information for teachers is separate from the sections which would apply to OTs.

Regardless, I would like to look into whether or not the The Higher Education Act (which is the act this page is breaking down) still stands and if so does if it includes the possibility of Perkins loan cancellations for OTs in specific fields. The College Cost Reduction and Access Act of 2007 was the act that created the Public Service Loan Forgiveness Plan, so the information from this page (though old) is discussing a totally different act than what we have discussed above. Maybe there is something here..?

[EDIT] Apparently, the Higher Education Act is currently up for renewal by Congress. I read one article that stated it should come before congress this month. We will probably have to wait to see if it is renewed/if any changes are made before we can find out about any potential loan cancelation through this act.
 
Last edited:
Oct 19, 2013
244
17
Status
Pre-Health (Field Undecided)
So I'm sure this is something all of us applying to grad school are pretty concerned about! I have been researching this and have a whole bunch of questions, so was hoping current OT students or current OTs might be able to offer a bit of insight, or creative solutions to making grad school affordable. I know in the end it'll all be worth it, even with debt, but I want to be smart going into this!

First of all, Loans:

It definitely sounds like 99% of aid available is in the form of loans, the federal ones being Stafford, Perkins and Graduate Plus. From what I understand, Stafford pays for up to 20,000, and Graduate Plus can cover the rest of expenses including cost of living expenses. So what is the Perkins loan and how does it differ? I haven't really researched private loans, but from what I can tell the benefits are minimal compared with federal, especially considering some loan forgiveness plans in place.

Public Service Loan Forgiveness:

I know there is a Public Service Loan Forgiveness Plan that after 120 monthly payments (essentially 10 years) working at least 30 hrs a week as an OT in certain settings, whatever is left in federal loans, including interest, is forgiven. It seems I would probably have to take approx. $100,000 of loans out for grad school, so this sounds like it would make a huge difference for me. How permanent is this and what are the odds of it disappearing by the time I would need it? Also, it sounds like it really covers a majority of OT work - is that correct, or would it greatly limit the amount of employers/settings I could pursue?

The student aid website also says the Public Servie Loan Forgiveness Plan can be combined with the Income-Based Repayment plan, for lower cost monthly payments (whatever is left in 10 years would still be completely forgiven.) To qualify for the IBR, you have to have a partial economic hardship at the time of application, even though if after you have IBR and no longer have economic hardship, you can stay on it. It doesn't make a lot of sense to me and maybe I'm wrong, but sounds like if you start with the standard repayment plan and have economic hardship down the line, you can't switch it. As a single person with no additional debt, would it be difficult to qualify? Would it be worth it then to take a lesser paying job right out of grad school in order to qualify?

Additional Loan Forgiveness/Cancellation:

It took a lot of digging, but I found a few places that mention an additional loan forgiveness program for OTs, where for the first 5 years of repayment up to $2000 a year ($10,000 overall) can be forgiven if you work with children, adolescents or veterans. Anyone have any additional info on this? AOTA's website just said this:

"AOTA recently succeeded in getting occupational therapy recognized as a profession of national need making occupational therapists who work with children, adolescents, and veterans eligible for additional loan forgiveness. The program will authorize loan forgiveness for up to $10,000 in loans over a 5 year period. This program is still in the process of being designed and implemented, and information will be posted on the AOTA Web site as it becomes available."

This website (http://ifap.ed.gov/sfahandbooks/attachments/0304Vol5Ch6.pdf) says that schools may cancel 100% of a Perkins Loan for full-time "qualified professional provider of early intervention services
in a public or other nonprofit program under public supervision." at the bottom of the page, it defines "qualified professional provider" to include OT, but at the same time this seems to be a part of the "Teacher Loan Cancellation" and it says OTs don't count as teachers. Can anyone offer some insight to this? Does this mean school-based OTs may have their loans forgiven or cancelled by their employer?

Grants:

I have heard that certain hospitals/employers offer to pay for tuition in exchange for working 2-3 years for them after graduating, because they are in rural areas that have a hard time attracting OTs.I have searched online but haven't really found many examples of this. Is this something that used to be done but isn't as much anymore? Does anyone know of specific employers who offer this, or know anyone who has done this and feels it was worth it or not?

Aside from AOTA and specific schools/states with scholarships, there really doesn't seem to be much out there for OTs in the way of grants. Anyone know of a good place to search, or any that exist in Pennsylvania? Are there any out there at all for first year OT students? From what little I've seen out there, they all seem to apply to 2nd year or graduating students.

Websites:

I know this was super long but hopefully it helped some of you trying to figure this out too. If anyone else has any info, websites or experience to share please do! Thanks!

http://www.aota.org/en/Education-Careers/Find-School/Aid/Loan-Forgiveness.aspx
http://www.professionaldevelopmentpath.com/occupational-therapy-schools-costs.html
http://ifap.ed.gov/sfahandbooks/attachments/0304Vol5Ch6.pdf
http://studentdoctor.net/2013/11/six-smart-ways-to-pay-off-your-student-loans/
http://www.finaid.org/loans/forgiveness.phtml
Did you get accepted into a program? I was looking over how much students (graduate) that receive for financial aid and its 20,500 but we all know that tuition and fees are at least 16,000 to 30,000 a year.
 
Jul 5, 2013
61
17
Status
DPT / OTD
Something to consider that a lot of schools don't advertise (but are options if you ask the right person) are graduate assistantships. I was just awarded one for 20 hours/week that covers tuition (no fees though) plus a $3,500 per semester stipend. It'll be stupidly hard to balance the two things, but at the end of the day I know it'll be worth it to significantly reduce my loan debt.
 

CurlyHairedGirl

5+ Year Member
Sep 12, 2010
191
14
Status
Pre-Rehab Sci [General]
Makingmoves2014 "we all know that tuition and fees are at least 16,000 to 30,000 a year."

If I had gotten into an in-state school, it would have been about $10,000, but since I'm going to a public school as out-of-state student, its going to be more like $50,000 a year. <Sigh>.
 
Oct 19, 2013
244
17
Status
Pre-Health (Field Undecided)
I'm
Makingmoves2014 "we all know that tuition and fees are at least 16,000 to 30,000 a year."

If I had gotten into an in-state school, it would have been about $10,000, but since I'm going to a public school as out-of-state student, its going to be more like $50,000 a year. <Sigh>.
I'm looking into Tennessee State University and its going to expensive.....Since I'm consider out of state.
 

CurlyHairedGirl

5+ Year Member
Sep 12, 2010
191
14
Status
Pre-Rehab Sci [General]
Attending Tennessee out of state schools isn't as expensive as attending University of Alabama Birmingham out of state. TSU also has some sort of graduate assistantship that only out of state students can apply for that gives you in-state tuition.
 

ExceptionalSea

5+ Year Member
Nov 15, 2012
136
89
Status
Occupational Therapy Student
i have some knowledge about the student loan world because i had to take out loans for undergrad. the only difference between a stafford loan and a perkins loan is that the stafford loan is funded directly from the government while the perkins loan is typically funded by your school and is a much smaller award. they are the best way to go in terms of student loans because they do not accrue interest while you're in school. they also have a pretty generous grace period after you finish school and before you start repayment - i think something like 9 months. private student loans have a shorter grace period, sometimes as little as 3 months up to 6 months, and they also accrue interest while you are in school. that interest is then capitalized and then added to your principal balance once you go into repayment. in addition, stafford loans and perkins loans generally have a fixed interest rate (something like 5 or 6%) while private student loans are market variable and dependent on your credit history. i got lucky with one of my private loans with a 3.25% interest rate, but got reamed with my other ones at a 9.25% interest rate. plus i have the slight worry that the interest will go up with the market while i know my federal loans will not. in other words, i highly recommend NOT taking out private student loans if at all possible - they are a pretty bad deal. DON'T TAKE OUT PRIVATE STUDENT LOANS. i learned the hard way.

the grad plus loans are also funded by the government but i think they run similar to a private loan in that they accrue interest while you are in school. however, these are still a much better deal because they qualify for the Public Service Loan Forgiveness and IBR under the law. i also believe that they have a fixed interest rate so that you don't have to worry about it going up with the market. and although the grad plus loans are also dependent on your credit history like private student loans, i've heard they are much easier to obtain and secure even with a semi-poor credit history (the government wants you to be educated, whew!) :)

hope that helps some.
 

CurlyHairedGirl

5+ Year Member
Sep 12, 2010
191
14
Status
Pre-Rehab Sci [General]
Work a lot first 1 or 2 years and pay it off.
I expect that my student loan totals will be more than my entire salary for the first two or three years put together. Rather than picking the job with the best pay (might be travel?) I'd go for the job with the best mentoring opportunities. Plus, OT is my second career. I've already messed up my health by overworking in my first career, so I'd like to avoid that when I start out as an OT.
 

ExceptionalSea

5+ Year Member
Nov 15, 2012
136
89
Status
Occupational Therapy Student
oh, and i have some knowledge/history about the Public Service Loan Forgiveness program too. despite whatever your political affiliations are, we all can thank the Obama administration for pushing this one through. :)

this originally came about because lawyers in particular were graduating from law school with tremendous amounts of debt. this meant that most young lawyers wanted to go into fields where they could make the most money instead of other much-needed fields like public defense and non-profit, where they got paid substantially less. our lawmakers, seeing a need to fill these gaps, pushed the Public Service Loan Forgiveness program through so that young lawyers with tons of debt could go into needed fields and not worry about paying off their loans. so after 10 years of public service and making all monthly payments the rest of their loans would be forgiven. when combined with Income-Based-Repayment, if you do the math, it's a hell of deal and a really great thing that it was passed. again, only your federal student loans, not private student loans, qualify for these programs.

anyways, so the nice thing about lawmakers pushing issues through that are important in particular to them (law school debt, ha!) means that the benefits were expanded to anyone who went into student debt so they could work in public service. although yes, wanting to qualify for the Public Service Loan Forgiveness program may limit your workplace settings, a lot of OT settings do qualify. most hospitals will qualify, school systems, etc. - anything with a 501(c)(3) tax identification (non-profit) or working for the government. as far as i know, the IBR part of it means that the amount of your monthly loan payment is based on whatever you make in relation to how much debt you have, which they calculate based on what percentage of your income they think you should be able to afford to pay on your student loans and still have money to live and eat. so i don't think it really matters what salary you have - you can still benefit from IBR if you have high debt, even if you have a high(ish) salary. to the OP - having over $100k in student loans is a high enough debt that i think you could still benefit from IBR, even with no other student debt. obviously this is something that is figured out on a case by case basis which you will have to do on your own after you graduate and begin working - but it's worth a shot seeing if it would end up benefiting you.

hope that helps too!
 
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OP
lcs2074
Jan 12, 2013
223
84
Philadelphia, PA
Status
Occupational Therapy Student
i have some knowledge about the student loan world because i had to take out loans for undergrad. the only difference between a stafford loan and a perkins loan is that the stafford loan is funded directly from the government while the perkins loan is typically funded by your school and is a much smaller award. they are the best way to go in terms of student loans because they do not accrue interest while you're in school. they also have a pretty generous grace period after you finish school and before you start repayment - i think something like 9 months. private student loans have a shorter grace period, sometimes as little as 3 months up to 6 months, and they also accrue interest while you are in school. that interest is then capitalized and then added to your principal balance once you go into repayment. in addition, stafford loans and perkins loans generally have a fixed interest rate (something like 5 or 6%) while private student loans are market variable and dependent on your credit history. i got lucky with one of my private loans with a 3.25% interest rate, but got reamed with my other ones at a 9.25% interest rate. plus i have the slight worry that the interest will go up with the market while i know my federal loans will not. in other words, i highly recommend NOT taking out private student loans if at all possible - they are a pretty bad deal. DON'T TAKE OUT PRIVATE STUDENT LOANS. i learned the hard way.

the grad plus loans are also funded by the government but i think they run similar to a private loan in that they accrue interest while you are in school. however, these are still a much better deal because they qualify for the Public Service Loan Forgiveness and IBR under the law. i also believe that they have a fixed interest rate so that you don't have to worry about it going up with the market. and although the grad plus loans are also dependent on your credit history like private student loans, i've heard they are much easier to obtain and secure even with a semi-poor credit history (the government wants you to be educated, whew!) :)

hope that helps some.
ExceptionalSea, stafford loans for undergrad students don't accrue interest while in school, but when you receive a stafford loan as a graduate student they DO accrue interest while you are in school, unfortunately. I believe this was a recent change within the past few years. There is still a grace period when you graduate, but it still accrues interest during this time as well.