Carefully consider graduate school debt

John M. Grohol, PsyD

When I entered graduate school in 1990, the practice of clinical psychology was in a very different shape than it is today. At that time, I expected that although I may have to rack up some debt to undertake my graduate studies, they would be easily covered by my future salary as a practicing psychologist. By the time I graduated five years later, managed care had firmly taken hold of the mental health profession. Therapists in managed-care organizations were often required to hold nothing higher than a master's degree. It became clear that the debt I had accumulated over the prior five years was not going to be so easily paid off.

Fiscal irresponsibility?

In a way, I was lucky because I was offered an opportunity to change my career path upon graduation and not face the financial headaches accompanying clinical practice. I was hired to design and oversee a mental health web site, sponsored by an MIS behavioral health-care software developer.

But many of my friends were less lucky. One had to wait years before finding an internship placement, despite her outstanding clinical and academic skills. Meanwhile, the interest on her loans accumulates. Another went into practice for a county mental health agency with a starting salary of $32,000. Another friend graduated, but had such difficulty in finding postdoctoral, supervised work, she is still years away from licensure. She continues to delay paying back her loans (accumulating interest all the time), since it would simply be impossible to do so. She confides in me that she hopes one day to be able to declare bankruptcy to simply erase what she now realizes was a fiscal nightmare of a mistake. A fourth friend found a postdoctoral placement after months of unemployment and nationwide searching, and even then it paid only $34,000.

I say "only" $34,000, because my friends and I made an unfortunate choice early in our professional careers. We attended one of the widely available and heavily marketed private universities offering doctoral degrees (both the PsyD and PhD degrees, both APA-accredited). While it may seem that we were fiscally irresponsible to take on a burden of $60,000, $80,000, and in some cases, even $100,000 of student loans, we thought these amounts would be manageable given the profession's relatively high earnings potential in 1990. Of course, we never envisioned mean salaries would fall in the intervening years (after all, everyone seeks out a therapist at one time or another in their lives!), nor that the demand for licensed psychologists would dwindle.

Doing the math now seems like we must have been delirious at the time. At a $34,000 annual salary, that works out to about $1,900 per month after taxes. Our student loans range from $650 to $950 per month, often consolidated and stretched out for 30 years. Figure rent, utilities, gas money, 401K contributions, insurance, credit-card bills, professional education and conferences, and APA dues, and you can quickly see how many newly graduated psychologists just barely meet their financial obligations. Graduating psychologists must often rely on very good networking contacts, a thriving subspecialty area (such as neuropsychological evaluations), or a significant other who is in a different and more lucrative profession.

Don't be fooled

I write this as a warning and wake-up call to graduate students in private university programs who think that the profession of psychology will cover their future loan payments. Yes, it will, if you can get to licensure, but you will be faced with many lean years ahead of you. Furthermore, you will have to be willing to forgo typical American dreams such as buying a house for many years.

If you're an undergraduate thinking of attending a private university because it will be easier to get into than a public school's program, remember that most such universities are profit-making institutions. Their credit-hour rates will often be significantly higher than comparable public programs. Don't be fooled by an acceptance letter. Carefully consider the long-term implications of taking on tens of thousands of dollars of debt early in your life and career.

While nobody gets into this profession "for the money," I believe most psychology students expect to be able to meet their fiscal responsibilities as a psychologist. It may be worth reconsidering your decision and remember to take into account your long-term fiscal future when wisely choosing how you will reach your career goal.

John M. Grohol, PsyD, is the director of Mental Health Net (www.cmhc.com/) and a visiting instructor in the department of epidemiology and social medicine of the Einstein College of Medicine.

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