As a professional in the field of psychology, you’re well aware of the toll that financial stress can take on your mental health.
Fortunately, there are a variety of student loan forgiveness programs and repayment programs to help you deal with your student loan debt. Some of these programs make your student loan payments more affordable, while others discharge some or all of your loans. There are also programs that award you thousands of dollars a year to help you pay them off as fast as possible.
After four years in college and another four to seven in a doctoral program, you’ve likely accumulated some major student loan debt. Read on to learn about your options for student loan repayment assistance and forgiveness for psychologists.
National repayment options and student loan forgiveness for psychologists
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program forgives federal loans for anyone working in a qualifying organization. Eligible workplaces include:
- A government organization at the federal, state, or local level
- A 501(c)3 non-profit organization
- A non-profit organization that’s not 501(c)3 designated but meets other requirements related to public service
- AmeriCorps or the Peace Corps
After 10 years of making payments toward your loans (beginning in October 2007), the government will forgive your remaining balance under PSLF. If you’re looking to take advantage of this option, you should either take out a Direct Consolidation Loan or get on an income-driven repayment plan. If you stick with the standard 10-year repayment plan, you won’t have any loan balance left to forgive.
National Health Service Corps (NHSC) loan repayment assistance
While PSLF makes you wait 10 years before forgiving your loans, the National Health Service Corps offers loan assistance after just two. To qualify, you must work for two years in an approved high-need, underserved area. Qualifying facilities are located in both urban and rural areas across the country.
To be eligible, you must be a health service psychologist, licensed professional counselor, marriage and family therapist, mental health nurse practitioner, or mental health physician’s assistant. After you complete your service, NHSC could grant you up to $50,000 to repay your loans.
National Institutes of Health (NIH) loan repayment programs
The National Institutes of Health program offers loan assistance to psychologists engaged in research projects. You must have your Doctorate of Psychology (Psy.D.) and commit to at least two years of approved research in a non-profit organization. If you’re eligible, NIH could repay up to $35,000 of your student loans every year.
Indian Health Services Loan Repayment Program
The Indian Health Services program pays up to $40,000 to behavioral health professionals. You must work for at least two years in a health facility that serves American Indian or Native Alaskan communities.
Eligible professions include clinical psychologists, counselors, and social workers.
Student loan repayment assistance for psychologists by state
The Alaska Supporting Health Care Access Through Loan Repayment (SHARP) program offers loan assistance to psychologists practicing in Alaska. If you commit to a two-year contract in a designated shortage area, you could receive up to $20,000 for two years.
Especially hard to fill positions come with a yearly stipend up to $27,000.
The Arizona State Loan Repayment Program awards behavioral health specialists, like clinical social workers, professional counselors, clinical psychologists, and marriage and family therapists. You must serve full-time or half-time for two years at an approved service site.
The program awards full-time providers between $40,000 to $50,000 and gives $20,000 to $25,000 to half-time providers. If you choose to stay in the role beyond your two-year contract, you can get additional loan repayment assistance every year.
California has a couple of options for student loan forgiveness for psychologists. The Mental Health Loan Assumption program awards up to $10,000 to psychologists and other behavioral health providers. You must work for 12 months in a role that your county has deemed hard to fill.
The California State Loan Repayment Program also helps mental and behavioral health providers who work in designated shortage areas. Award amounts vary from $2,500 to $50,000 depending on your work commitment.
The Colorado Health Service Corps awards $25,000 to $50,000 for licensed mental health providers. You must work between two and three years at a shortage site in Colorado.
Both part-time and full-time work qualifies.
If you’re a mental health counselor, therapist, or social worker in Delaware, you could benefit from working in an underserved area. The Delaware State Loan Repayment Program awards up to $70,000 to providers with an advanced degree in exchange for two years of service. Providers who stay for three years could receive up to $105,000.
If you’re a mid-level practitioner, the program grants up to $35,000 for two years and $52,500 for a three-year contract.
If you work in a designated shortage area in Hawaii, the state could give you student loan assistance, but you must commit to a two-year service contract.
Award amounts from the Hawaii State Loan Repayment Program vary, but it’s certain to help you out if you qualify.
The Kansas State Student Loan Forgiveness Program awards up to $20,000 per year to mental and behavioral health providers with a Kansas license. You must commit to a two-year service contract, but you can also extend this contract and continue to get assistance for up to three more years.
The Kansas Rural Opportunities Zone Program also offers loan assistance to anyone willing to live in one a “rural opportunity zone.” If you establish residency in one of these 77 counties, you could receive up to $15,000.
The Kentucky State Loan Repayment Program matches any loan repayment assistance you get through the National Health Service Corps.
The program awards up to $40,000 to licensed mental health professionals and behavioral health practitioners.
If you’re a psychologist in Maryland, you’re in luck. The Janet L. Hoffman Student Loan Assistance Program provides assistance for counselors and therapists who make less than $60,000 a year.
If you’re a medical professional who specializes in mental health, you could qualify for the Maryland State Loan Repayment Program.
If you’re a psychologist in Massachusetts, you could receive up to $50,000 in loan assistance. The Massachusetts Student Loan Forgiveness Program offers loan forgiveness to psychologists who commit to two-year contracts.
You can also reapply to the program for two more years and receive up to $100,000 in loan assistance.
The Michigan State Loan Repayment Program awards Michigan psychologists and other mental health providers working in designated areas.
Initial two-year contracts come with $20,000 in loan assistance, but you can extend your contract for eight years and receive up to $200,000. But this is as long as the assistance amount doesn’t exceed your total debt.
Minnesota is another state with student loan forgiveness for psychologists.
The Minnesota Health Professionals Student Loan Forgiveness Program awards $12,000 to psychologists in designated rural or urban areas.
The Montana NHSC Student Loan Repayment Program offers up to $15,000 for two years to psychologists and other mental health providers.
Like many other state loan forgiveness for psychologists programs, the Montana program requires two years of service in a designated area.
If you’re a graduate student in Nebraska, you could get a forgivable loan. The Nebraska Rural Health Student Loan Program awards loans of $30,000 for up to four years or $15,000 for up to two years.
If you agree to work in a shortage area after graduation, the program forgives the loans. But if you fail to fulfill your agreement, you’ll have to repay 150 percent of the original loan and 8% interest from the date of default.
Psychologists and counselors in Nevada could qualify for loan forgiveness from the Nevada Health Service Corps program. Award amounts vary depending on funding for the year.
You must work in a shortage area, most of which tend to be in rural communities.
The New Hampshire State Loan Repayment Program is for psychologists and providers in underserved areas.
You must commit to a full-time role for three years or a part-time role for two years.
If you provide mental health services as a social worker, you could qualify for the New York State Licensed Social Worker Loan Forgiveness Program.
The program offers up to $26,000 for social workers who work in designated counties.
The Pennsylvania Primary Health Care Loan Repayment Program grants up to $60,000 to full-time psychologists, counselors, therapists, and social workers in shortage areas.
Part-time providers can receive up to $30,000.
The state of Rhode Island assists psychologists and mental health providers through the Rhode Island Health Professionals Loan Repayment Program.
Award amounts vary, but you can qualify with part-time or full-time work.
The Texas Student Loan Repayment Programs for mental health professionals distributes over $2 million in loan assistance to qualifying psychologists, counselors, social workers, and psychiatrists.
Providers must commit to a five-year contract and must work with people enrolled in Medicaid or the Children’s Health Insurance Program.
If you’re a psychologist in Virginia, you could get up to $140,000 over four years from the Virginia State Loan Repayment Program.
To be eligible, you must have completed residency training and be board eligible or board certified in an eligible specialty.
Washington offers student loan forgiveness for psychologists and related professionals through both the Federal-State Loan Repayment Program and the Health Professional Loan Repayment Program. The federal program offers up to $70,000 for a two-year service contract, and the state program awards up to $75,000 for three years.
Your options for income-driven repayment plans
Not everyone wants to work in a critical shortage area or in a role that qualifies for student loan repayment assistance. But there are still options for making your student loan debt more manageable without this service commitment.
If you’re struggling to make student loan payments, you could get on an income-driven repayment plan. Here are the four options for income-based repayment:
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Pay As You Earn Repayment Plan (PAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
All of these plans extend your federal loan terms to 20 or 25 years, depending on the specific plan. Plus, they cap your monthly payments at 10 to 20 percent of your monthly discretionary income (again, depending on the plan). Finally, any remaining debt at the end of the repayment term will be discharged – but it will be taxed as income for that year.
If you’re struggling to make monthly payments, these plans could help. But because you’ll be paying for so many years, you’ll end up paying a lot more in interest.
Income-driven plans are helpful if you’re really financially strapped, but they’re not the best move if you don’t have a major financial need.
Refinancing could help you pay off student debt faster
While income-driven plans adjust your federal student loan payments, refinancing can lessen the burden of both private and federal student loans. When you refinance with a private lender, you pay off your previous student loans by taking out a new one.
This new loan will hopefully have a lower interest rate. If your interest rate drops substantially, you could save thousands of dollars on your student debt.
Refinancing also lets you choose new repayment terms, often between five and 20 years. You could choose a shorter term if you’re ready to pay off your loan as fast as possible, or you could lengthen the repayment window if your priority is lowering your monthly payments.
Plus, refinancing simplifies the student loan payment process. Instead of keeping track of multiple monthly bills, you’ll take care of just one.
If you have a steady income and good credit score, you could be a strong candidate for student loan refinancing. Switching to a refinanced loan could help make your student debt more manageable.
As a psychologist or mental health provider, you understand how important it is to adopt healthy behaviors. By being proactive about your student loan debt, you’re well on the way to finding financial balance.
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