The Ultimate Guide to Student Loan Repayment and Forgiveness for Psychologists

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As a professional in the field of psychology, you’re likely aware of the toll that financial stress can take on your mental health.

And maybe you’re feeling it, too: Psychologists with doctor of psychology (Psy.D.) degrees graduate with a median debt load of $200,000, while those with doctor of philosophy (Ph.D.) degrees graduate with a median debt load of $75,000, according to the American Psychological Association.

Fortunately, there are a variety of programs that offer loan forgiveness and more manageable monthly payments to help you deal with your student loan debt. There are also programs that award you money to help pay off loans as fast as possible.

Read on to learn about your options for student loan repayment assistance and forgiveness for psychologists, including…

Average student loan debt for psychologists: National repayment options

Public Service Loan Forgiveness program

The Public Service Loan Forgiveness (PSLF) program forgives federal student loans for people working full-time in a qualifying organization if they qualify. Eligible workplaces include:

  • A government organization at the federal, state or local level
  • A 501(c)3 nonprofit organization
  • A nonprofit organization that’s not designated as 501(c)3 but meets other requirements related to public service
  • AmeriCorps or the Peace Corps

After you make 120 qualifying monthly payments toward your loans (which don’t need to be consecutive, and must have started as of October 2007, when the program began), the government forgives your remaining balance under PSLF.

If you’re looking to take advantage of this option, make sure you have eligible loans, which might require consolidating certain loans into a direct consolidation loan. You’ll also need to get on an eligible repayment plan; the most advantageous will be an income-driven repayment plan. If you stick with the standard 10-year repayment plan, for instance, you won’t have any loan balance left to forgive.

National Health Service Corps loan repayment assistance

The National Health Service Corps (NHSC) offers loan assistance after just two years. 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 U.S. citizen or U.S. national
  • A provider or eligible provider in the Medicare, Medicaid and State Children’s Health Insurance Program
  • A licensed, practicing mental or behavioral health professional in the state
  • Carrying student loan debt related to your degree

After you complete your service, NHSC could grant you up to $50,000 to repay your loans.

National Institutes of Health loan repayment programs

The National Institutes of Health (NIH) program offers loan assistance to psychologists engaged in research projects. You must have a qualifying degree, which can include a Ph.D. or Psy.D., and commit to at least two years of approved research in a qualified organization. If you’re eligible, NIH could repay up to $50,000 each year.

Indian Health Services Loan Repayment Program

The Indian Health Services program helps alleviate student loan debt for psychologists by paying up to $40,000 to qualified behavioral health professionals. You must commit to working for at least two years in a health facility that serves American Indian or Native Alaskan communities, and contracts can be extended on an annual basis until all qualified debt has been paid off.

Student loan forgiveness for psychologists by state

Alaska

The Alaska Supporting Health Care Access Through Loan Repayment (SHARP) program offers loan assistance to psychologists working for a qualified employer in Alaska. If you commit to a two-year contract in a designated shortage area, you could receive up to $35,000 per year. Especially hard-to-fill positions come with a larger award amount, of $47,000.

Arizona

The Arizona State Loan Repayment Program is available to 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 provides loan forgiveness in the amount of $40,000 to $50,000 to counselors who are full-time providers for the initial two-year contract, and gives $20,000 to $25,000 to half-time providers in that same time frame. If you choose to stay in the role beyond your two-year contract, you can get additional loan repayment assistance every year.

California

The California State Loan Repayment Program helps mental and behavioral health providers who work in designated shortage areas at an approved practice site. Assistance is contingent on a two-year full-time or four-year half-time service commitment, with varying award amounts from $5,000 to $50,000.

Colorado

The Colorado Health Service Corps awards $25,000 to $50,000 to licensed mental health providers. You must work for three years at a shortage site in Colorado. Both part-time and full-time work qualifies.

Delaware

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 between $30,000 and $100,000 to providers in exchange for two years of service. You must work for a qualified nonprofit or public entity.

Hawaii

If you work for a public or nonprofit entity in a designated shortage area in Hawaii, the state could give you student loan assistance — but, like other programs, you must commit to a two-year full-time contract or four-year part-time one. Award amounts from the Hawaii State Loan Repayment Program vary.

Kansas

The Kansas State Student Loan Forgiveness Program awards up to $25,000 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 a designated Rural Opportunity Zone. If you establish residency in one of these 77 counties in Kansas, you could receive up to $15,000.

Kentucky

The Kentucky State Loan Repayment Program matches any loan repayment assistance you get from a sponsor, which can include private foundations, corporations, community organizations or charities. The program awards up to $40,000 to licensed mental health professionals and behavioral health practitioners who commit to working for two years in a rural and underserved location.

Maryland

If you’re a licensed clinical counselor or social worker in Maryland, you can access the Janet L. Hoffman Loan Assistance Repayment Program. This program provides up to $30,000 per year, based on your overall education debt. You could qualify if you’re a state resident who earned a degree from a Maryland college and are making less than $60,000 a year (or $130,000 combined household income if married) while providing full-time public service in a state or local government or nonprofit agency to low-income or underserved residents.

Massachusetts

If you’re a psychologist or mental health or professional counselor in Massachusetts, you could receive up to $50,000 in student loan assistance. The Massachusetts Loan Repayment Program (MLRP) for Health Professionals offers loan forgiveness to psychologists who commit to two-year contracts working full-time in an underserved community.

Michigan

The Michigan State Loan Repayment Program awards Michigan psychologists and other mental health providers working in designated areas $20,000 in loan assistance for initial two-year contracts. This program tackles the average student loan debt for psychologists by offering contract extensions for up to eight years and a total of up to $200,000, as long as the assistance amount doesn’t exceed your total debt. You must have a master’s degree or Ph.D. to qualify.

Minnesota

The Minnesota Health Care Loan Forgiveness program awards $12,000 per year to psychologists and professional clinical counselors who serve a minimum of three years in designated rural areas.

Montana

The Montana State Loan Repayment Program offers up to $15,000 for two years to psychologists and other mental health providers. Like many other state loan forgiveness programs for psychologists, the Montana program requires two years of service in a designated rural or frontier area.

Nebraska

The Nebraska Loan Repayment Programs award money to clinical psychologists and other mental health practitioners for student loan repayment as long as your employer in a designated shortage area can provide 50% of the award in matching funds. There’s a requirement of full-time work of two to four years to get up to $30,000 per year.

Nevada

Behavioral health professionals in Nevada could qualify for loan repayment funds from the Nevada Health Service Corps program. Award amounts vary depending on funding available for the year. You must work in a shortage area, most of which tend to be in rural communities. Contract periods are typically two years.

New Hampshire

The New Hampshire State Loan Repayment Program is for psychologists and other health providers in underserved areas. You must commit to a full-time role for three years or a part-time role for two years. Full-time psychiatrists, for example, can qualify for as much as $75,000 in assistance over three years.

New York

If you provide mental health services as a licensed social worker, you could qualify for the NYS Licensed Social Worker Loan Forgiveness Program. The program offers $6,500 annually for four years of qualified service with a maximum of $26,000 for social workers who work in designated areas of critical need.

Pennsylvania

The Pennsylvania Primary Health Care Loan Repayment Program grants up to $60,000 to full-time psychologists, counselors, therapists and social workers who work in shortage areas on a two-year contract. Part-time providers can receive up to $30,000.

Rhode Island

The state of Rhode Island helps lower student loan debt for qualified psychologists and mental health providers through its Health Professional Loan Repayment Program. Award amounts vary, but you can qualify with full-time work for two years or part-time for four years in shortage areas.

Texas

The Texas Loan Repayment Program for Mental Health Professionals provides loan assistance to qualifying candidates. Providers must commit to a five-year contract and must work in an underserved area or with people enrolled in Medicaid or the Children’s Health Insurance Program.

Five-year aggregate awards can be as much as $160,000 for psychiatrists; $80,000 for counselors, psychologists, licensed clinical social workers and marriage and family therapists with doctoral degrees; and $40,000 for licensed clinical social workers, counselors and marriage and family therapists without doctoral degrees.

Virginia

If you’re a psychologist, psychiatrist or professional counselor in Virginia, you could get up to $140,000 over four years from the Virginia State Loan Repayment Program to serve in an area of high need. The minimum commitment is two years. To be eligible, you must have completed residency training and be board-eligible or board-certified in a qualifying specialty.

Washington

Washington state offers help with repaying student loans 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 addressing your federal student loan debt as a psychologist. If you’re struggling to make student loan payments, you could get on a federal income-driven repayment plan. There are four income-driven repayment plans:

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% 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 likely end up paying more in interest. Income-driven plans are helpful if you’re really financially strapped, but they may not be the best move if you don’t have financial need.

Refinancing could help you pay off student debt faster

While income-driven plans adjust your federal student loan payments, student loan refinancing could 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, possibly at a lower interest rate.

Remember that your federal loans will become private, so if you refinance federal loans, make sure you’re comfortable forfeiting access to federal benefits, such as forgiveness and income-driven repayment programs.

A refinance loan will, ideally, come with a lower interest rate. If your interest rate drops substantially, you could save a substantial amount on your loans.

Refinancing also lets you choose a new repayment term, 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 tackle 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’ll be on the way to finding financial balance.

The information in this article is accurate as of the date of publishing.

Jaymi Naciri contributed to this report.

Published in Student Loan Forgiveness