Staggering student loans

[PsychBoxe]

I will be entering a Clinical Psych PsyD program this fall, and I can't help but worry about the amount of debt that I will be accruing over my five years of school. After one year of MA classes along with the cost of tuition for the PsyD program I am looking to be owing approximately 150k in loans (plus some interest). This seems astonishing to me? How do people afford to pay this and still afford to live at a somewhat comfortable level? My school assures me that no one in the history of the program has ever defaulted on their loans, which is encouraging. My academic mentor (a PsyD) assured me that he had no problems paying back his loans of 170k. Will anyone else be in this seat? How have people gone through this arduous process?

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[Sunny329]

It sucks, doesn't it?

I thought about reconsidering the Psy.D. and applying next year for a Ph.D. simply because of the finances.

$150K sounds (unfortunately) like a possible post-Psy.D. figure to me.

I've been advised to take out Stafford as much as allowable, then go to GradPlus Loans since you can consolidate them with Stafford after graduation--they're both guaranteed by the government. GradPlus looks like 8.9% interest now, and Stafford runs 6.8%. You can take $8500 subsidized and around $20500 unsubsidized annualy with Stafford. I've been advised if it's at all possible during your grad years, make quarterly interest payments toward your balance--apparently it helps a lot.

I'd be interested to know what others have to say about this.

 

[phillydave]

Many schools offer assistantships in several different forms. In my program, if I participate in an assistantship as say a T.A., I can cut out roughly 30% of tuition costs. Next, take into account a certain small amount of money made during internships that can be used to take some more of the edge off of tuition costs. It's not crazy to hope to have half of tuition paid before your done. My tuition is nowhere near 150k, but I certainly worry about the future.

 

[lamorena]

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[lamorena]

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[deleted176373]

I will be entering a Clinical Psych PsyD program this fall, and I can't help but worry about the amount of debt that I will be accruing over my five years of school. After one year of MA classes along with the cost of tuition for the PsyD program I am looking to be owing approximately 150k in loans (plus some interest). This seems astonishing to me? How do people afford to pay this and still afford to live at a somewhat comfortable level? My school assures me that no one in the history of the program has ever defaulted on their loans, which is encouraging. My academic mentor (a PsyD) assured me that he had no problems paying back his loans of 170k. Will anyone else be in this seat? How have people gone through this arduous process?

You might talk to some of them... Many of us have asked this same question, think long and hard before incurring this debt, because you will need to pay it back.

While your academic mentor paints a rosy picture, you might ask for specifics and run the numbers yourself. I did the top ramen thing as a young man... I'll say it wasn't much fun. Someone is lying to you... no problem paying back his loans??? Is it the math below, or this mentor?

Below is ripped off from: http://www.finaid.org/calculators/scripts/loanpayments.cgi


Here, I'll do the math for you:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA]$150,000.00 .
[FONT=ARIAL, HELVETICA]Adjusted Loan Balance: .[FONT=ARIAL, HELVETICA]$150,000.00 .
[FONT=ARIAL, HELVETICA]Loan Interest Rate: .[FONT=ARIAL, HELVETICA]6.80%.
[FONT=ARIAL, HELVETICA]Loan Fees: .[FONT=ARIAL, HELVETICA]0.00%.
[FONT=ARIAL, HELVETICA]Loan Term: .[FONT=ARIAL, HELVETICA]10 years.
[FONT=ARIAL, HELVETICA]Minimum Payment: .[FONT=ARIAL, HELVETICA]$50.00 .
[FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA]$1,726.20 .
[FONT=ARIAL, HELVETICA]Number of Payments: .[FONT=ARIAL, HELVETICA]120.
[FONT=ARIAL, HELVETICA]Cumulative Payments: .[FONT=ARIAL, HELVETICA]$207,144.85 .
[FONT=ARIAL, HELVETICA]Total Interest Paid: .[FONT=ARIAL, HELVETICA]$57,144.85 .
​

[FONT=ARIAL, HELVETICA]It is estimated that you will need an annual salary of at least $207,144.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $138,096.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1..

Wow! You're borrowing a lot of money to pay for your college education. Maybe you should think about attending a less expensive college? A good rule of thumb is that your total education debt should be less than your expected starting salary. If you borrow more than twice your expected starting salary you will find it extremely difficult to repay the debt. Live like a student while you are in school so you don't have to live like a student after you graduate.

Salary for Psy.D. doing EXTREMELY well fresh out of school? $85,000 perhaps? So your take home would be what, about $2400 every 2 weeks or $4800 a month. Leaving you 3k a month to live on... and that's if you have a GREAT job.

 

[PrisonPsych]

You might talk to some of them... Many of us have asked this same question, think long and hard before incurring this debt, because you will need to pay it back.

While your academic mentor paints a rosy picture, you might ask for specifics and run the numbers yourself. I did the top ramen thing as a young man... I'll say it wasn't much fun. Someone is lying to you... no problem paying back his loans??? Is it the math below, or this mentor?

Below is ripped off from: http://www.finaid.org/calculators/scripts/loanpayments.cgi


Here, I'll do the math for you:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA]$150,000.00 .
[FONT=ARIAL, HELVETICA]Adjusted Loan Balance: .[FONT=ARIAL, HELVETICA]$150,000.00 .
[FONT=ARIAL, HELVETICA]Loan Interest Rate: .[FONT=ARIAL, HELVETICA]6.80%.
[FONT=ARIAL, HELVETICA]Loan Fees: .[FONT=ARIAL, HELVETICA]0.00%.
[FONT=ARIAL, HELVETICA]Loan Term: .[FONT=ARIAL, HELVETICA]10 years.
[FONT=ARIAL, HELVETICA]Minimum Payment: .[FONT=ARIAL, HELVETICA]$50.00 .
[FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA]$1,726.20 .
[FONT=ARIAL, HELVETICA]Number of Payments: .[FONT=ARIAL, HELVETICA]120.
[FONT=ARIAL, HELVETICA]Cumulative Payments: .[FONT=ARIAL, HELVETICA]$207,144.85 .
[FONT=ARIAL, HELVETICA]Total Interest Paid: .[FONT=ARIAL, HELVETICA]$57,144.85 .
​

[FONT=ARIAL, HELVETICA]It is estimated that you will need an annual salary of at least $207,144.00 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 0.7. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $138,096.00, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.1..


Wow! You're borrowing a lot of money to pay for your college education. Maybe you should think about attending a less expensive college? A good rule of thumb is that your total education debt should be less than your expected starting salary. If you borrow more than twice your expected starting salary you will find it extremely difficult to repay the debt. Live like a student while you are in school so you don't have to live like a student after you graduate.

Not that it's any better, but the repayment timeline is usually 30 years, like mortgages, so the numbers then look like this:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA] $150,000.00 . [FONT=ARIAL, HELVETICA] Adjusted Loan Balance: .[FONT=ARIAL, HELVETICA] $150,000.00 . [FONT=ARIAL, HELVETICA] Loan Interest Rate: .[FONT=ARIAL, HELVETICA] 6.80%. [FONT=ARIAL, HELVETICA] Loan Fees: .[FONT=ARIAL, HELVETICA] 0.00%. [FONT=ARIAL, HELVETICA] Loan Term: .[FONT=ARIAL, HELVETICA] 30 years. [FONT=ARIAL, HELVETICA] Minimum Payment: .[FONT=ARIAL, HELVETICA] $50.00 . [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA] $977.89 . [FONT=ARIAL, HELVETICA] Number of Payments: .[FONT=ARIAL, HELVETICA] 360. [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA] Cumulative Payments: .[FONT=ARIAL, HELVETICA] $352,037.80 . [FONT=ARIAL, HELVETICA] Total Interest Paid: .[FONT=ARIAL, HELVETICA] $202,037.80 .
[FONT=ARIAL, HELVETICA]Note: The monthly loan payment was calculated at 359 payments of $977.89 plus a final payment of $975.29..
[FONT=ARIAL, HELVETICA]It is estimated that you will need an annual salary of at least $117,346.80 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 1.3. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $78,231.20, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.9. .

 

[AcronymAllergy]

Not that it's any better, but the repayment timeline is usually 30 years, like mortgages, so the numbers then look like this:

[FONT=ARIAL, HELVETICA]Loan Balance: .[FONT=ARIAL, HELVETICA] $150,000.00 . [FONT=ARIAL, HELVETICA] Adjusted Loan Balance: .[FONT=ARIAL, HELVETICA] $150,000.00 . [FONT=ARIAL, HELVETICA] Loan Interest Rate: .[FONT=ARIAL, HELVETICA] 6.80%. [FONT=ARIAL, HELVETICA] Loan Fees: .[FONT=ARIAL, HELVETICA] 0.00%. [FONT=ARIAL, HELVETICA] Loan Term: .[FONT=ARIAL, HELVETICA] 30 years. [FONT=ARIAL, HELVETICA] Minimum Payment: .[FONT=ARIAL, HELVETICA] $50.00 . [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA]Monthly Loan Payment:.[FONT=ARIAL, HELVETICA] $977.89 . [FONT=ARIAL, HELVETICA] Number of Payments: .[FONT=ARIAL, HELVETICA] 360. [FONT=ARIAL, HELVETICA]
. [FONT=ARIAL, HELVETICA] Cumulative Payments: .[FONT=ARIAL, HELVETICA] $352,037.80 . [FONT=ARIAL, HELVETICA] Total Interest Paid: .[FONT=ARIAL, HELVETICA] $202,037.80 .
[FONT=ARIAL, HELVETICA]Note: The monthly loan payment was calculated at 359 payments of $977.89 plus a final payment of $975.29..
[FONT=ARIAL, HELVETICA]It is estimated that you will need an annual salary of at least $117,346.80 to be able to afford to repay this loan. This estimate assumes that 10% of your gross monthly income will be devoted to repaying your student loans. This corresponds to a debt-to-income ratio of 1.3. If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $78,231.20, but you may experience some financial difficulty.This corresponds to a debt-to-income ratio of 1.9. .

I was going to make the same statement. 10 years would definitely be preferable if you can swing it, as that would minimize interest charges, but most student loans (especially those in the six-figure range) have 20-30 year repayment periods.

Also, many loan companies are integrating graduated repayment schemes. Thus, you pay less initially when you're just getting established professionally, and then your payments increase annually (hopefully alongside your income).

 

[AlaskanJustin]

Hm see this is all fine and dandy if you haven't already accrued a massive debt from UG. I didnt have the luxury of going to a small state school (in-state) or having parents that could help me pay, so I accrued a ton. Even if I take out minimal loans during grad school to get by, I will still be in the 6 figure loan range (maybe around 120 to 130k).

So let me ask this, am I ignorant to think that with the help of a program such as NHSC or NIH that i could eliminate most if not all of that debt by working a few years under the auspices of these programs?

sounds as though many of oyu have either experienced or considered this so you might know.

For instance I know the NIH offers a program that pays up to 35k a year towards your loans while also providing the normal government wages and benefits.

Lets say I did that for 3 years (3 years is standard although you can apply to extend it for more years if necessary). lets also start at the 150k loan mark.

So then you take ~150000
Subtract 35000 x 3 = 105000
Leaving 45000. Seems much more manageable? This is also assuming you don't do a 4th year of it.

Also the NHSC gives a little less, but its still 30k a year towards your loans. I just have to believe that doing something like this is plausible???

 

[Therapist4Chnge]

Here are some more thread about debt management, salaries, repayment options, and loan forgiveness programs. Some of the threads veered off track, but there is still some info work reading.

Doctoral Debt
Psychologist Salary Discussion
Income Based Repayment Program Bill & Discussion
Loan Advice For A New Student
Pay & Stuff
"Average Salary" <--I pulled some info from one of my lectures on the Business of Psychology, for anyone wanting to look at private practice considerations. I'm turning it into a presentation for early career psychologists, though that is at least 1 year off, so stay tuned.

 

[Therapist4Chnge]

So let me ask this, am I ignorant to think that with the help of a program such as NHSC or NIH that i could eliminate most if not all of that debt by working a few years under the auspices of these programs?

sounds as though many of oyu have either experienced or considered this so you might know.

For instance I know the NIH offers a program that pays up to 35k a year towards your loans while also providing the normal government wages and benefits.

Lets say I did that for 3 years (3 years is standard although you can apply to extend it for more years if necessary). lets also start at the 150k loan mark.

So then you take ~150000
Subtract 35000 x 3 = 105000
Leaving 45000. Seems much more manageable? This is also assuming you don't do a 4th year of it.

Also the NHSC gives a little less, but its still 30k a year towards your loans. I just have to believe that doing something like this is plausible???

I have looked at a few different ways to eliminate debt, and this is definitely one of the best ways....if you can secure a spot. People should have multiple plans if they take on 100k+ of debt, because gov't funding can sometimes be hard to project 5-7+ years down the road.

Does anyone know if an academic medical center/med school, and/or non-gov't position have any sort of debt repayment program? I haven't been able to find much information about those areas, and they are a distinct possibility if I continue on my current path. I have looked at the VA options and they are nice, but I may not be able to do what I want if I work at a VA.

 

[deleted176373]

So let me ask this, am I ignorant to think that with the help of a program such as NHSC or NIH that i could eliminate most if not all of that debt by working a few years under the auspices of these programs?

Lets say I did that for 3 years (3 years is standard although you can apply to extend it for more years if necessary). lets also start at the 150k loan mark.
Leaving 45000. Seems much more manageable? This is also assuming you don't do a 4th year of it.

Also the NHSC gives a little less, but its still 30k a year towards your loans. I just have to believe that doing something like this is plausible???

Sure, it's plausible and the only fly in that ointment is actually landing a job there. What happens if you go to an expensive private school and don't get an APA approved internship? Most of these jobs in government REQUIRE both an APA school and an APA internship. What happens if you make it 3 years through only to realize that you cannot complete the degree? There is a bucket of risk and a cup of reward.

It's precisely why many Psy.D.'s enter the military, the government will pay off these loans, and it's a great deal when they do... getting into the military, much like working for the federal government is not guaranteed, but possible. So it's not naive to envision this as one path to resolving the large loans, but to bank on it is risky.

Mark

 

[Thirdxthecharm]

I have also heard of programs that if you work with an underserved population for x amount of years that you can get your loans paid off. Has anyone else heard of this or have more knowledge about it. I know of a psychiatrist who is doing this so I wasn't sure if it was true for all types of loans or just medical.

 

[phillydave]

By the time one is finished a PsyD program, their bottom line shouldn't be the full amount if they were doing assistantships or working part time as lamorena mentioned. For example:

My program total costs are a little over 90k, including books
Working as a TA or RA cutting out 3 credits of tuition costs per semester for 5 years = $35000
Working part time, or considering internships earnings, and contributing just $200 per month to tuition costs over 5 years = $12000

Between the two, one could knock out half or more of the bottom line before they're even finished.

 

[Therapist4Chnge]

I have also heard of programs that if you work with an underserved population for x amount of years that you can get your loans paid off. Has anyone else heard of this or have more knowledge about it. I know of a psychiatrist who is doing this so I wasn't sure if it was true for all types of loans or just medical.

Yes, clinical psychologists qualify. The money can vary based on the level of need and location, but it can knock off $15-$25k a year pre-tax. I would recommend checking on the numbers, but that is what I recall from looking into this last year.

 

[LM02]

Hm see this is all fine and dandy if you haven't already accrued a massive debt from UG. I didnt have the luxury of going to a small state school (in-state) or having parents that could help me pay, so I accrued a ton. Even if I take out minimal loans during grad school to get by, I will still be in the 6 figure loan range (maybe around 120 to 130k).

So let me ask this, am I ignorant to think that with the help of a program such as NHSC or NIH that i could eliminate most if not all of that debt by working a few years under the auspices of these programs?

sounds as though many of oyu have either experienced or considered this so you might know.

For instance I know the NIH offers a program that pays up to 35k a year towards your loans while also providing the normal government wages and benefits.

Lets say I did that for 3 years (3 years is standard although you can apply to extend it for more years if necessary). lets also start at the 150k loan mark.

So then you take ~150000
Subtract 35000 x 3 = 105000
Leaving 45000. Seems much more manageable? This is also assuming you don't do a 4th year of it.

Also the NHSC gives a little less, but its still 30k a year towards your loans. I just have to believe that doing something like this is plausible???

The NIH loan repayment program (LRP) is great, but it is for people who are in research positions. So this PsyD student will most likely not be eligible (although it is possible).

Also, there is a difference between the intramural LRP and extramural LRP. You get normal government wages/benefits if you work in the intramural program. But if you have a job elsewhere, and receive extramural LRP funding, your salary/benefits are set by your employer.

Although the LRP provides "up to $35K per year," there is a lot of math that goes into what they actually pay. In two years, they will only pay at most 50% of your debt, and from that 50%, they subtract a portion that is the "participant obligation." This is based on your salary.

So for example, let's say you have $100K in debt and get the LRP. They will immediately halve that to $50K that they will pay over two years. Let's say you are a postdoc with a $40K salary. They will take 10% of your salary as your "participant obligation," and substract it from the $50K. So then they are only paying $46K over two years. When you split that over the two years, you are only eligible for $23K per year.

So even though you can get "up to $35K per year," it often doesn't happen - unless, of course you have major loan debt (like physicians do).

The good news is that you can apply for a competitive renewal, and they can extend the LRP for several more years, as you pay down your debt. It's still a great program, but it's important to know the limitations going in before you accrue a lot of debt with the assumption that you will just get repayment down the road. It is also getting more and more competitive. In FY 2009, only 410 out of 1135 applicants got funded for the extramural clinical research LRP. And that includes MDs in the mix.

 

[psychgrad10]

Yes, clinical psychologists qualify. The money can vary based on the level of need and location, but it can knock off $15-$25k a year pre-tax. I would recommend checking on the numbers, but that is what I recall from looking into this last year.

what about school psychologists working in low-income schools? I know teachers, etc can get loan forgiveness but I couldn't find info if that could apply to school psych as well.

If I don't get a GA, my program will be 6 figures including my UG debt . I really liked the program and being a school psych program, their match rate (even in APA internships were really high, I think all of this years cohort was matched in an internship) is really high but they don't have a lot of funding unless you can find a GA....

 

[AlaskanJustin]

The NIH loan repayment program (LRP) is great, but it is for people who are in research positions. So this PsyD student will most likely not be eligible (although it is possible).

Also, there is a difference between the intramural LRP and extramural LRP. You get normal government wages/benefits if you work in the intramural program. But if you have a job elsewhere, and receive extramural LRP funding, your salary/benefits are set by your employer.

Although the LRP provides "up to $35K per year," there is a lot of math that goes into what they actually pay. In two years, they will only pay at most 50% of your debt, and from that 50%, they subtract a portion that is the "participant obligation." This is based on your salary.

So for example, let's say you have $100K in debt and get the LRP. They will immediately halve that to $50K that they will pay over two years. Let's say you are a postdoc with a $40K salary. They will take 10% of your salary as your "participant obligation," and substract it from the $50K. So then they are only paying $46K over two years. When you split that over the two years, you are only eligible for $23K per year.

So even though you can get "up to $35K per year," it often doesn't happen - unless, of course you have major loan debt (like physicians do).

The good news is that you can apply for a competitive renewal, and they can extend the LRP for several more years, as you pay down your debt. It's still a great program, but it's important to know the limitations going in before you accrue a lot of debt with the assumption that you will just get repayment down the road. It is also getting more and more competitive. In FY 2009, only 410 out of 1135 applicants got funded for the extramural clinical research LRP. And that includes MDs in the mix.

Of course there are caveats and I forget this was originally talking about PsyD programs. I will be doing PhD so its less of an issue. Also having already worked at the NIH and having a branch that I could come back to helps immensely, so I could in fact do the intramural LRP through the clinical research program. I agree you need to know what is involved and what it takes before hand. They really fine print some of the catches, for instance you cannot be a post-doc IRTA or CRTA and receive the award, you have to be, say, an adjunct investigator. Knowing these things will save you a headache later.


To respond to the working in disadvantaged populations bit, have you scanned the HRSA and/or NHSC websites? (here http://nhsc.hrsa.gov/loanrepayment/ and http://datawarehouse.hrsa.gov/GeoAdvisor/ShortageDesignationAdvisor.aspx and http://hpsafind.hrsa.gov/)

There are a LOT of different mental health sites catering to A LOT of different things, i.e., in Washington I could work at one of the many correctional facilities and be eligible for the loan repayment bit. its not as much as the NIH one, but an IDEAL plan would be to do the HRSA/NHSC LRP first, then after you have served your years there do the position at the NIH LRP. Remember you cannot do both concurrently, you have to satisfy one obligation before having another (in the eligibility criteria of both) however I have checked and you could potential do one then the other...

ideal I know I know... but nonetheless, I think persistence and vigilence pays off in the end when it comes to this.

 

[Therapist4Chnge]

Sure, it's plausible and the only fly in that ointment is actually landing a job there. What happens if you go to an expensive private school and don't get an APA approved internship? Most of these jobs in government REQUIRE both an APA school and an APA internship. What happens if you make it 3 years through only to realize that you cannot complete the degree? There is a bucket of risk and a cup of reward.

I highlighted this in another thread, but this is why I harp on APA everything. Some programs discount the "need" for APA acred for programs and internship, but repayment is a BIG issue if you are taking on 100k or more in loans. I have some significant loans because of undergrad and grad school, but it can be much more managable with some good financial planning...which includes leveraging loan repayment programs.

Trust me now ane believe me later, the best path to ensure financial stability and a decent quality of life is through APA acred. programs and internships. Be very very wary of any program that does not not push APA internships. The "true cost" of a non-APA internship is not just missing out on VA and some other gov't jobs.

 

[AlaskanJustin]

I highlighted this in another thread, but this is why I harp on APA everything. Some programs discount the "need" for APA acred for programs and internship, but repayment is a BIG issue if you are taking on 100k or more in loans. I have some significant loans because of undergrad and grad school, but it can be much more managable with some good financial planning...which includes leveraging loan repayment programs.

Trust me now ane believe me later, the best path to ensure financial stability and a decent quality of life is through APA acred. programs and internships. Be very very wary of any program that does not not push APA internships. The "true cost" of a non-APA internship is not just missing out on VA and some other gov't jobs.

yeah this is amazing to me, it would be like an MD or DO not going to an accredited residency program, just seems like mass suicide?

I mean I understand some of the BoP spots pay really well, but ffs its not worth it in the long run unless they get their accreditation together?

 

[ILGirl]

what about school psychologists working in low-income schools? I know teachers, etc can get loan forgiveness but I couldn't find info if that could apply to school psych as well.

If I don't get a GA, my program will be 6 figures including my UG debt . I really liked the program and being a school psych program, their match rate (even in APA internships were really high, I think all of this years cohort was matched in an internship) is really high but they don't have a lot of funding unless you can find a GA....

Check out this link: http://www.nasponline.org/advocacy/loanforgiveness.pdf

The loans will not be forgiven though until you've worked 10 years in public service. This loan forgiveness program is good for all who work in public service careers, including careers in public schools.

 

[AlaskanJustin]

Check out this link: http://www.nasponline.org/advocacy/loanforgiveness.pdf

The loans will not be forgiven though until you've worked 10 years in public service. This loan forgiveness program is good for all who work in public service careers, including careers in public schools.

is this the one where you also have to pay 120 consecutive payments?

 

[Thirdxthecharm]

is this the one where you also have to pay 120 consecutive payments?

Yeah I just read through it and it is, seems a lot less helpful than others that i have been looking at.

 

[PsycOut]

Yeah I just read through it and it is, seems a lot less helpful than others that i have been looking at.

I'm not a fan of taking on a lot of debt, especially if you expect to be in a low-paying field ... which psychology is (yes, there are exceptions to this rule, but the averages are low).

However, it's not all doom and gloom.

The spirit of the "new" loan forgiveness legislation is to forgive excess student debt for persons who work in public service careers at low pay (public service lawyers, MD's in low SES communities, etc.). It's an incentive to get well-educated folks in low-pay public service fields, instead of losing them to high pay, corporate gigs just because they are saddled with debt.

Yes, you must make 120 payments; however, you also must be enrolled in a payment schedule that considers your income. In other words, those 120 payments will only represent 10% of your income (your loan amount doesn't matter; it's a payment that is based on your earnings).

Once you pay for 120 payments all of the rest is forgiven.

(There are a number of caveats and requirements that must be considered and rules that must be followed, so be careful and thorough).

Of course, laws can change ... this is CURRENT law.

Best of Luck!

 

[futureapppsy2]

The NIH loan repayment program (LRP) is great, but it is for people who are in research positions. So this PsyD student will most likely not be eligible (although it is possible).

Also, there is a difference between the intramural LRP and extramural LRP. You get normal government wages/benefits if you work in the intramural program. But if you have a job elsewhere, and receive extramural LRP funding, your salary/benefits are set by your employer.

Although the LRP provides "up to $35K per year," there is a lot of math that goes into what they actually pay. In two years, they will only pay at most 50% of your debt, and from that 50%, they subtract a portion that is the "participant obligation." This is based on your salary.

So for example, let's say you have $100K in debt and get the LRP. They will immediately halve that to $50K that they will pay over two years. Let's say you are a postdoc with a $40K salary. They will take 10% of your salary as your "participant obligation," and substract it from the $50K. So then they are only paying $46K over two years. When you split that over the two years, you are only eligible for $23K per year.

So even though you can get "up to $35K per year," it often doesn't happen - unless, of course you have major loan debt (like physicians do).

The good news is that you can apply for a competitive renewal, and they can extend the LRP for several more years, as you pay down your debt. It's still a great program, but it's important to know the limitations going in before you accrue a lot of debt with the assumption that you will just get repayment down the road. It is also getting more and more competitive. In FY 2009, only 410 out of 1135 applicants got funded for the extramural clinical research LRP. And that includes MDs in the mix.

Another thing to consider is that for the extramural LRP, you have to do certain types of research to eligible (health disparities, for example) or be from a low-income background. Not everyone who works in a research position will even be eligible to apply. Also, if you are applying for an extramural LRP, your mentor/PI/boss needs to behind you 100%, as the things the application requires from THEM are really extensive and time-consuming. The informal post-doc in our lab applied for an extramural LRP this year, and it was as extensive, if not more so, than a grant application. We all hope she gets it!

 

[AlaskanJustin]

I'm not a fan of taking on a lot of debt, especially if you expect to be in a low-paying field ... which psychology is (yes, there are exceptions to this rule, but the averages are low).

However, it's not all doom and gloom.

The spirit of the "new" loan forgiveness legislation is to forgive excess student debt for persons who work in public service careers at low pay (public service lawyers, MD's in low SES communities, etc.). It's an incentive to get well-educated folks in low-pay public service fields, instead of losing them to high pay, corporate gigs just because they are saddled with debt.

Yes, you must make 120 payments; however, you also must be enrolled in a payment schedule that considers your income. In other words, those 120 payments will only represent 10% of your income (your loan amount doesn't matter; it's a payment that is based on your earnings).

Once you pay for 120 payments all of the rest is forgiven.

(There are a number of caveats and requirements that must be considered and rules that must be followed, so be careful and thorough).

Of course, laws can change ... this is CURRENT law.

Best of Luck!

My other concern with this program is I believe this program is for ONLY federal loans, so if you are like me and had to take out a private laon from a government/institutionally approved lender (i.e. chase) then this program would not cover those loans.

The other programs I am looking at DO cover these loans, so thats a big deal.

 

[Thirdxthecharm]

I'm not a fan of taking on a lot of debt, especially if you expect to be in a low-paying field ... which psychology is (yes, there are exceptions to this rule, but the averages are low).

However, it's not all doom and gloom.

The spirit of the "new" loan forgiveness legislation is to forgive excess student debt for persons who work in public service careers at low pay (public service lawyers, MD's in low SES communities, etc.). It's an incentive to get well-educated folks in low-pay public service fields, instead of losing them to high pay, corporate gigs just because they are saddled with debt.

Yes, you must make 120 payments; however, you also must be enrolled in a payment schedule that considers your income. In other words, those 120 payments will only represent 10% of your income (your loan amount doesn't matter; it's a payment that is based on your earnings).

Once you pay for 120 payments all of the rest is forgiven.

(There are a number of caveats and requirements that must be considered and rules that must be followed, so be careful and thorough).

Of course, laws can change ... this is CURRENT law.

Best of Luck!

I apologize for speaking without much knowledge on the subject thank you for that information.

 

[CApsych]

I am also doing a Clinical PsyD and the loans are very scary, but the income contingent loan repayment is fairly comforting, even if I wasn't able to do the federal loan forgiveness after 10 years plan.

 

[ILGirl]

Yeah I just read through it and it is, seems a lot less helpful than others that i have been looking at.

Without a doubt, the ones that Alaskan Justin pointed out are better because they forgive the doubt more quickly. HOWEVER, this one is the one loan forgiveness program that I have seen which covers school psychologists who are working in school systems.

If someone knows of loan forgiveness programs that are better that will help school psychologist who plan to work in schools, please let us know.

 

[PsychBoxe]

My mentor that I mentioned in the beginning of this thread did this exact thing. He worked in a hospital in a rural area and was able to have much of his debt chopped off. I am not quite sure how that works at this point.

 

[PsychBoxe]

In my last post I was referencing working in rural or areas in need of attention areas in order to chop down student loans. Does anyone know how this works?

 

[CApsych]

You can check info out here http://nhsc.hrsa.gov/

Cool program. I'm geographically limited to the Bay Area, so I thought I wouldn't be able to participate, but I found job listings in areas like Petaluma etc. You should check it out.

 

[dynapsych]

Yes, I think it is important to highlight that the NHSC loan repayment program is for underserved populations, not necessarily just rural populations. There are a number of participating sites in urban areas around the country as well.

 

[deleted176373]

I think this thread is highlighting some great opportunities, and while I am a big fan of avoiding debt, some will not have that luxury. I think that speaks to the importance of having 2 or 3 solid plans for paying back the debt which do not leave you penniless or paying for 30 years (can you imagine still paying back your student loans well into your 50's!!!) I can assure you that making loan payments gets old quickly. I don't even like making my car payments and that's only a 4 year loan!

Mark

 

[PsycOut]

My other concern with this program is I believe this program is for ONLY federal loans, so if you are like me and had to take out a private laon from a government/institutionally approved lender (i.e. chase) then this program would not cover those loans.

The other programs I am looking at DO cover these loans, so thats a big deal.

You (and others) MAY be able to participate with those loans (or similar loans). I believe loans qualify from private lenders if they were FFEL (???) loans. Those are loans that are from a private lender but with a government connection (government subsidizing interest while you're in school?). Anyway, a strict private loan does not qualify, you're right (as I understand it, anyway).

I had a loan from a private lender, Sallie Mae; I consolidated that loan with my Federal Direct loans into ONE direct loan from the US Dept. of Ed. That process put all of my loans under the Direct Federal Loan Program. After the consolidation, my entire NEW loan was eligible for the program. If, and when, I go back to school I'll have to consolidate any new loans with this latest loan to get enrolled in the program again, but the point is that there is a mechanism (in some cases) for bringing "private" loans into the program.

 

[AlaskanJustin]

You (and others) MAY be able to participate with those loans (or similar loans). I believe loans qualify from private lenders if they were FFEL (???) loans. Those are loans that are from a private lender but with a government connection (government subsidizing interest while you're in school?). Anyway, a strict private loan does not qualify, you're right (as I understand it, anyway).

I had a loan from a private lender, Sallie Mae; I consolidated that loan with my Federal Direct loans into ONE direct loan from the US Dept. of Ed. That process put all of my loans under the Direct Federal Loan Program. After the consolidation, my entire NEW loan was eligible for the program. If, and when, I go back to school I'll have to consolidate any new loans with this latest loan to get enrolled in the program again, but the point is that there is a mechanism (in some cases) for bringing "private" loans into the program.

hmmm that is very interesting I might have to look into the Direct Federal Loan Program, because my understanding was that Private loans and Federal loans could never be consolidated into one loan, but if they could that would be sexy...

 

[PsycOut]

hmmm that is very interesting I might have to look into the Direct Federal Loan Program, because my understanding was that Private loans and Federal loans could never be consolidated into one loan, but if they could that would be sexy...

The following website offers useful info. about loans, including consolidation and loan forgiveness.

http://www.finaid.org/

Specifically, info. on the Loan Forgiveness Program:
http://www.finaid.org/loans/publicservice.phtml

 

[codetype4/9]

150,000 at 6.8% = 10 years or 120 payments of forking out $1726.20 per month! I'm sorry, but actually makes me scared to think about. A good rule of thumb is that your total education debt should be less than your expected starting salary. If you borrow more than twice your expected starting salary you will find it extremely difficult to repay the debt!

That's 1726 bucks a month that you could have used to pay for your kids educations, a fat retirement account at the end of your career, opportunities to see the world, a mortgage on a nice home (or heck a mortgage on a modest home plus the mortgage on your sick parents modest home). Psychologists can make a comfortable living, but when 1/3 of your income each moth is dissolved like that - financially it's just not logical.

I went and got my doctorate, came out with about $20,000 in debt from undergrad and another 10k from gradschool- and still lament the skimpy living conditions I put my family through during this time and having to pay back even that sum. Plus, going to gradschool also means a loss of wages over five to seven years where you could have been working full time, making headway on a home, retirement, etc. which is something most don't consider.

I see many challenges in our field right now, but I'd say the debt psychologists are going into is one of the most prominent

 

[deleted176373]

+1, YEP!!! This is why trade-persons sometimes come out ahead of those with professional degrees. If you were a plumber with 7 years of experience, by the time you are 25 you might even own your own business and making decent money.

Plumber III (salary.com) is making 56k per year, has no debt, and has 5 years of making $43k or more per year.

Psychologist for the same area is making 90k per year in the same area, but has debt that is sucking up 1/3 of their income... This has the effect of making their quality of life not significantly better than a plumber with a high school education. If we look at independent plumbers the numbers can be even more skewed in their favor.

Mark

 

[phillydave]

How many new PsyD graduates exit their program with the full tuition to still pay off? Is it the case that most PsyD students graduate their programs having paid nothing towards their bottom line?

 

[lamorena]

/

 

[futureapppsy2]

also, on a related note, i have a good friend getting her phd at an R1 school. she has a tuition waver + stipend, but the stipend is not enough, and she still needs to take out loans to live and support herself while in school. she is still going to graduate with a significant amount of debt as a result. so, its not just psyd students who end up in the red upon graduation.

Yes, but supplemental stipend support must be significantly less than full tuition + full living expenses, no?

 

[lamorena]

.

 

[AlaskanJustin]

Just because someone happened to get into a PhD program doesn't make them fiscally reasonable. I know folks that went through their fully funded PhD programs taking out as much as the government would given them in subsidized and unsubsidized loans for living expenses. Defining "need" can be quite different between people.

At my program, I lived in a studio apartment, had an old car (no car payments), and maintained a fairly strict budget. Others might live in a nicer apartment but have roommates. . . then you have the people that are still out buying nice clothes every month (hobby = shopping), going on vacations to resorts, traveling to visit friends several times a year, buying new cars, etc. . .

I will say that having the hindsight now is irrelevant to the past. As I have mentioned before I had no clue about the repercussions of things like private loans.

My goal at this point is to take out my max amount of federal loans to pay off any private loans, while living pretty strict (Ive been doing that for some time now anyways, DC area ya know).

My reasoning is that at least if all the loans are federal, at a better interest rate, they can be consolidated and would be eligible for different programs... That is the idea at least we will see if it works.

Anyone disagree with that idea? Taking out federal loans to pay off the private loans, then being able to consolidate all the federal loans instead of having separate, non-consolidatable private loans?

Cheers

 

[Therapist4Chnge]

Fiscal responsibility has no degree bounds. Some of the worst people with money...have money. I can't tell you how many people I used to work with in the business world that pulled in good money (mid-6 figures), but if they lost their job, they'd be cashing out their 401k's in a matter of months and selling their homes shortly thereafter.

 

[Therapist4Chnge]

Anyone disagree with that idea? Taking out federal loans to pay off the private loans, then being able to consolidate all the federal loans instead of having separate, non-consolidatable private loans?

Cheers

I'm not a licensed financial advisor/CPA/tax lawyer, etc....though, in general, paying off higher interest rate private loans is a good idea. Of course, there are all sorts of snags to watch out for (early payoff fees/penalties in particular).

Consildation isn't always a great idea either, because it can limit you to what is eligible for other repayment programs, not to mention it can cost more in the long-run. Some consolidation costs an up-front fee, while other consildation plans will limit consolidation options down the road. It can get really tricky, which is a real problem because defaulting on gov't loans can absolutely screw your credit. They closed all of the loopholes for bankruptcy dumps (thanks early career law students/lawyers who bailed on their loans in the 80s), as well as increased penalities and collection options for people who try and skip out. A lawyer friend of mine is up to his neck in loans because he defaulted and was hit with all sorts of penalities. His wages were garnished and he'll be collecting SS by the time he pays them off.

Paying a financial planner (not some guy off the street, but someone who has specific experience working with professionals with student loans, and holds license(s) in the right areas) can really make a difference. It may cost you $500-$1000+, but in the long-run it will pay off.

 

[AlaskanJustin]

Fiscal responsibility has no degree bounds. Some of the worst people with money...have money. I can't tell you how many people I used to work with in the business world that pulled in good money (mid-6 figures), but if they lost their job, they'd be cashing out their 401k's in a matter of months and selling their homes shortly thereafter.

yeah my poker playing friends are great examples of that, its a novel concept for them to put some money aside for things like rent.

On a side note, if Psychology doesnt work out I might just move to Vegas

 

[erg923]

If anyone is an opponet of schools that charge 25 and 30k per year for a doctorate, its me, but Im wondering why we seem to be treating this like we are all going to be schizoid hermits after grad school... Hello,.... many of us are married already, or will have spouses by the end of all this. My "honey-bunnies" salary is nothing to scoff at, and it helps significantly.

 

[AlaskanJustin]

I'm not a licensed financial advisor/CPA/tax lawyer, etc....though, in general, paying off higher interest rate private loans is a good idea. Of course, there are all sorts of snags to watch out for (early payoff fees/penalties in particular).

Consildation isn't always a great idea either, because it can limit you to what is eligible for other repayment programs, not to mention it can cost more in the long-run. Some consolidation costs an up-front fee, while other consildation plans will limit consolidation options down the road. It can get really tricky, which is a real problem because defaulting on gov't loans can absolutely screw your credit. They closed all of the loopholes for bankruptcy dumps (thanks early career law students/lawyers who bailed on their loans in the 80s), as well as increased penalities and collection options for people who try and skip out. A lawyer friend of mine is up to his neck in loans because he defaulted and was hit with all sorts of penalities. His wages were garnished and he'll be collecting SS by the time he pays them off.

Paying a financial planner (not some guy off the street, but someone who has specific experience working with professionals with student loans, and holds license(s) in the right areas) can really make a difference. It may cost you $500-$1000+, but in the long-run it will pay off.

yeah thing is a) I have 3 separate private loans, technically one is a state loan thats considered private, that is the one I REALLY need to pay off because its ridiculous, not much only like 10k but I figured get that out and that would be great.

My other loans consist of the federal loans, which have different interest rates but none over 6% so thats not awful, however my main Private loans (1 each year of going back to school costs) are around 60k, so obviously I couldnt pay those off with federal money, but those rates are higher and I would need to consolidate those two into one.

My idea is that if I can consolidate into two loans, then it might be more managable at some point. I figure eventually I will need to speak to a financial advisor, just have to find one

 

[Therapist4Chnge]

yeah my poker playing friends are great examples of that, its a novel concept for them to put some money aside for things like rent.

On a side note, if Psychology doesnt work out I might just move to Vegas

My buddy paid for most of his condo with poker winnings, and I paid for a good chunk of a degree in another field with gambling winnings (all reported to the IRS and bet at legal betting establishments). The biggest irony is that I learned more statistics building experimental stats models to try and predict in-game performance measures than I did doing straight psychology research.

A couple years ago I built a successful model to accurately predict an NFL RB's rushing totals for the 2nd half of the season, which I used to make prop. bets for/against him, and also inform on some shakey spreads for his team. I went something like 9-1, though I had to scrap everything at the end of the season because the offensive coordinator brought in too many new players.

Statistics...they are good for more than EBT.