Debt. Loans. Repayment. Terms likely to make any of us feel like….
…. and rush to click to another, safer page (Facebook!).
But whereas you can easily defer paying off your debt while still in school, you should not defer thinking about your debt and engaging in ongoing financial planning.
As in all cases, knowledge is power. Having access to accurate information about average debt loads and starting salaries is critical to ensure that you plan appropriately and have the best chances of managing your educational debt.
The cost of higher education continues to increase — not just in psychology but for most graduate student borrowers. Case in point: In 2012 the federal government stopped subsidizing student loans for graduate students, but we’re working on getting that subsidy restored through a bill introduced US Rep. Dr. Judy Chu! These increasing costs, compounded by the ever-escalating cost of living, are resulting in larger debt burdens for psychology graduate students.
Graduate Debt in Psychology: A Quantitative Analysis (Doran, Kraha, Reid Marks, Ameen, & El-Ghoroury) offers an up-to-date and comprehensive look at current debt and income levels among graduate students and early career psychologists (ECPs).
Here are some data highlights from the paper:
- The average debt for graduate students currently enrolled in a graduate program was $100,603.79 (Mdn = $80,000.00, SD = $77,623.76), with projected final debt loads of $129,717.56 (Mdn = $110,000.00, SD = $92,694.51).
- Graduate students reported that they anticipated a final average debt load of $141,078.07 (Mdn = $120,000, SD = $97,811.72), including their debt from both undergraduate and graduate study.
- Students seeking a Psy.D. degree (M = $173,239.29, Mdn = 160,000.00, SD = $78,711.10) reported higher levels of anticipated final debt than students seeking health-service Ph.D.’s (M = $111,590.14, Mdn = 76,500.00, SD = $96,561.01) and research/other Ph.D.’s (M = $68,684.21, Mdn = 72,500.00, SD = $43,977.33).
- Early career psychologists reported that their final cumulative debt load (undergraduate and graduate) was an average of $108,127.11 (Mdn = $98,000, SD = $73,817.32), which included debt from undergraduate and graduate study.
- Early career psychologists reported that their average first year income was $63,260.85 (Mdn = $60,000.00, SD = $19,408.75).
- They also reported an average current income of $74,577.83 (Mdn = $72,000.00, SD = $29,701.54).
- 43.3% of ECPs indicated that their current salary was lower than what they expected to make at this stage of their careers.
Impact of Debt
- Nearly half of all respondents experience significant financial stress.
- As a result of education-related debt, graduate students delay retirement planning (65.7%), buying a home (62.5%), having children (49.3%), and getting married (31.8%).
- ECPs also delay saving for the future (63.4%), retirement planning (56.7%), buying a home (42.5%), and having children (32.7%).
While this information can be overwhelming, it is important to keep track of your debt load and make sure you are informed about average salaries in your subfield or area. But how?
- First, read our paper for full details.
- Then, use student loan calculators (for example) to help you figure out what your average monthly payment will be based on your total debt and interest rate, so that you can plan accordingly.
If this article has made you fret about debt, don’t despair. We have compiled a few resources to help you learn more about managing your debt, loan repayment, and financial planning.
- APAGS Affording and Repaying Graduate School Toolkit – in particular check out the loan repayment list and the debt and salary infographic.
- Download APA’s Financial Planning for ECPs guide (requires APA membership).
- Additional resources on repayment, forgiveness, and consolidation from psychologist Dr. Nathaniel Mills.
- Time 2 Track’s “7 tips for climbing the student loan mountain.“
There are steps you can take at any point to begin to manage your debt. So break through that resistance, do your research, and start planning!
And just in case this article has caused you any distress (and you wish that you had followed your initial impulse to instead return to Facebook), please let us help you regulate yourself with a charming cat photo:
Editor’s Note: This article is written by Jennifer Doran and Laura Reid Marks, co-authors of a major peer-reviewed analysis of graduate debt in psychology published this February. The same study made the cover of Monitor on Psychology’s April issue.