VOLUME 30 , NUMBER 2 -February 1999

Some clinical psychology students' growing debt burden triggers response from training programs.

By Bridget Murray
Monitor staff

Psychologist Erica Sharkansky, PhD, feels financially secure. Just three years out of graduate school in clinical psychology, she's earning a salary of more than $50,000 as a clinical staff psychologist working with women veterans with post-traumatic stress and substance-abuse problems. She has long ago paid back a school loan of $1,000, and is considering buying a condo.

But not all her colleagues are as financially comfortable. Heidi Lilienthal, PsyD, also living in Boston and also a recent graduate in clinical psychology, is dogged by financial worries. She's earning just over $25,000 in a year-long postdoctoral fellowship at Dartmouth Medical School treating patients with severe and persistent mental illness.

Meanwhile her loan debt gathers interest and balloons well over $100,000. For her, a house is a far-off dream.

Their stories point to the spectrum of debt burden carried by psychology graduates in clinical and health-service provider areas. Some students attend programs that support their tuition and living expenses, and they incur little or no debt. Others, however, attend programs that offer little financial support. Those students usually cover their cost of tuition with loans.

And more students are taking out larger loans: The proportion of students in health-service provider areas with loan debt of more than $30,000 has increased from less than 20 percent in 1989 to more than 40 percent in 1996, according to APA's Research Office.

The reason? Tuition costs have risen steadily at graduate schools across all fields, well ahead of inflation, says Peter Syverson, vice president for research at the Council of Graduate Schools.

"The cost to play the [education] game has gone up," he says. Meanwhile starting salaries have stayed flat in most areas of psychology, and even decreased in private practice, says Patricia Pike, PhD, dean of the Rosemead School of Psychology at Biola University in La Mirada, Calif.

"The jobs are there in psychology, but they're often not paying as much as students' loans demand," says Pike. "Salaries aren't going up as fast as tuition's going up. Our alumni from the past four years have twice the loans of students in the previous four years."

In fact, psychologists' loans are outpacing those of graduates in other fields such as education, engineering, even law and business. And the debt load is highest among graduates of private, professional schools that charge an average of $15,000 a year. Those schools are also ones that have awarded the most clinical psychology doctorates recently.

Many of these schools, among them Rosemead, Nova Southeastern and the California School of Professional Psychology (CSPP), are, however, recognizing students' growing debt problems and are seeking to bolster financial support for students. They're also better informing students about the salaries they can expect and the job areas that will prove most lucrative, such as forensics, neuropsychology and developmental disabilities. Their goal is to help students take on a level of debt they can realistically handle.

Programs' response

Certainly students in Sharkansky's position--Indiana University subsidized her training--are satisfied with their lot. But those with debt loads in the order of Lilienthal's are less sanguine. A graduate of Nova Southeastern University's Center for Psychological Studies, Lilienthal works extra jobs to pay rent and fears she "may be paying off loans well into my 60s."

In an effort to prevent such problems, financial-aid counselors increasingly discourage students from taking on hefty loans--advice that students need because loans are ultimately their responsibility, says Rosemead's director of clinical training, Tamara Anderson, PhD, who's herself paying off a sizeable loan, and who counsels students on managing their debts. She says some students are naïve about loans, not realizing the impact until they near graduation, then panicking.

"They realize they'll be paying up to $1,000 in loans a month on a $30,000 salary, and wonder how they'll meet their expenses," she says.

Some educators have suggested that debt problems could be curbed if professional schools admit fewer students. But Philip Farber, PhD, president of the National Council of Schools and Programs of Professional Psychology (NCSPP), disagrees.

"We can't legislate and mandate how many students enter programs," says Farber, a Florida Institute of Technology professor. "If there's market oversaturation, the word will get out, and fewer students will enter. Marketplace forces will take care of it."

More financial support

Meanwhile, programs can support students financially as much as possible, Farber says. Schools that provide the most support are research-based, publicly supported institutions, including the University of California, Indiana University and the University of Illinois; some support students entirely for up to six years. Even private research-based institutions, among them Duke University and the University of Pennsylvania, subsidize clinical students with research dollars and tuition money from sizable undergraduate populations.

However, research-based programs admit small numbers--between five and six students--at a time. By comparison, many professional schools admit 50 or more students per class, but they can't offer students free tuition and stipends because they don't have undergraduates and large research grants. Hence, their graduates carry higher debt loads.

Professional schools, however, increasingly seek to prevent exorbitant debts, particularly as more of their own faculty battle debt, says Rosemead's Tamara Anderson. Her school, for example, is considering a tuition freeze at the current $16,000 a year.

It's also considering starting a funded postdoctoral fellowship program so students can conveniently earn the hours they need to qualify for their licenses instead of searching for other fellowships. That way they could more quickly move into higher-salary brackets instead of deferring loans.

For its part, Nova Southeastern's Center for Psychological Services spends $1 million a year on student employment, particularly in clinical, teaching and research assistantships. And its dean, Ronald Levant, EdD, says he aims to build the school's scholarship program, particularly for low-income and minority students. Another school system, CSPP, is working to boost students' access to outside fellowships, scholarships and work/study funds by alerting them about those opportunities and better informing them about how to land funding, says Mary Beth Kenkel, PhD, chancellor of CSPPFresno.

CSPP is also steering students toward low-interest loan programs and urging them to take out as few loans as possible. "We tell them that a manageable loan payment is between five and 15 percent of gross income," says Patty Mullen, CSPP's vice president of enrollment and marketing.

The school also advises students to prepare for jobs in psychology's growth areas, such as forensics and neuroscience, says Kenkel. "We're counseling students not to pin their hopes on entry-level private practice, but rather to opt for more stable, higher-salary areas," she says. "And we're starting to see a turnaround in students' perceptions. They're becoming more savvy about the pay-off in different parts of the job market."

CSPP has also expanded its program offerings beyond clinical psychology, adding, for example, an industrial/organizational psychology program. Similarly, Nova Southeastern has broadened its program to include concentrations in forensic psychology, clinical neuropsychology and health psychology.

It's also added a concentration in long-term mental illness, which features training in consultative psychopharmacology and work- and social-skills training for the mentally ill--an area with "huge marketplace need," says Nova's Levant, who is also an APA board member. And, says Farber, that's the direction in which professional schools need to move.

"If the current cohort of students is in a pinch with more traditional employment, we need to look at undertapped career paths in primary health care, nontraditional government work and business and corporations, for example," says Farber. "This is a highly skilled and talented group of people, who can use their skills in all kinds of settings."

Above all else, programs should apprise students of settings and tactics that will help them offset loans, says recent graduate Lilienthal.

"I don't think anyone goes into psychology to get rich, at least I didn't," says Lilienthal. "But I did expect to be able to make a living."

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