Douglas Olsen
Doctor of Physical Therapy (DPT) students are graduating with large amounts of debt, with 33.9% of students owing more than $100,000 in student loans. The average student loan debt for DPT graduates in 2019 was $103,482 for public institutions and $138,361 for private institutions, with 91% of DPT students taking on some form of student debt. This has led to an increase in adjustment disorders and depression post-graduation, as DPT students face the challenge of managing their financial well-being while pursuing their career goals. Strategies such as debt management education, refinancing, and loan repayment programs can help DPT graduates navigate their financial situation and work towards debt freedom.
| Characteristics | Values |
|---|---|
| Average student loan debt for physical therapy graduates from public institutions | $103,482 |
| Average student loan debt for physical therapy graduates from private institutions | $138,361 |
| Average amount of student loans for a DPT program | $83,087 |
| Average first-year income for DPT graduates | $75,000 - $80,000 |
| Debt management education impact on student loan debt | $3,520 less student loan debt |
| Debt management education impact on credit card debt | $570 less credit card debt |
| Maximum recommended borrowing for students | First-year income |
| Strategies to pay off debt | Refinancing, extra payments, signing up for the National Health Service Corps, living frugally, debt forgiveness programs, retirement accounts, emergency funds, early repayment |
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What You'll Learn
Debt management education
Understanding Debt Burdens
DPT students often incur substantial student loan debt during their studies. The average student loan debt for DPT graduates from public institutions is around $83,000 to $103,000, while those from private institutions face even higher debts, averaging over $112,000 to $138,000. It is not uncommon for DPT graduates to have debts exceeding $200,000, especially from private schools. Understanding the magnitude of their debt burden is the first step in effective debt management.
Repayment Strategies
DPT graduates have various repayment strategies to consider:
- Income-Driven Repayment Plans: Plans like PAYE (Pay As You Earn) can be beneficial for borrowers with high debt and lower incomes. PAYE caps monthly payments at a certain percentage of discretionary income and offers loan forgiveness after 20 years of repayment.
- Student Loan Forgiveness Programs: Programs like PSLF (Public Service Loan Forgiveness) provide loan forgiveness for borrowers working in public service or non-profit sectors. This can be especially attractive for DPTs working in underserved areas.
- Refinancing: Refinancing student loans to a lower interest rate can reduce overall repayment costs. However, this may not always be advisable, especially for those eligible for loan forgiveness or with stable incomes.
- Extra Payments: Making extra payments whenever possible can help repay loans faster and reduce overall interest costs.
- National Health Service Corps: Signing up with the NHSC can offer benefits for serving in high-need areas, providing opportunities for loan repayment assistance.
Financial Literacy Resources
DPT students and graduates should take advantage of financial literacy resources. Schools often provide some financial education, but students can also seek independent resources like financial websites, YouTube channels, and books to enhance their financial knowledge. Additionally, organizations like the APTA (American Physical Therapy Association) offer financial education platforms specifically tailored to the financial needs of DPT professionals.
Career and Salary Considerations
DPT graduates should consider their career paths and salary expectations when managing debt. Understanding the average salaries in the field and seeking employment opportunities that offer loan repayment benefits can help alleviate the burden of debt. While working in the private sector may offer higher salaries, DPT graduates should also explore public sector options, including working in underserved areas, which may provide loan forgiveness or additional benefits.
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Student loan repayment plans
Student loan debt is a significant concern for many Doctor of Physical Therapy (DPT) students. The average student loan debt for DPT graduates in 2019 was $103,482 for public institutions and $138,361 for private institutions, with 91% of DPT students taking on some level of debt.
There are several repayment plans and strategies that DPT students can consider to manage their student loan debt:
Income-Driven Repayment (IDR) Plans:
DPT graduates with federal student loans from the U.S. Department of Education can opt for an IDR plan. Under this program, borrowers typically pay a portion of their discretionary income, usually 5% to 10%, for 10 or more years. After this period, any remaining balance can be forgiven, but borrowers will have to pay taxes on the forgiven amount. Examples of IDR plans include:
Income-Based Repayment (IBR) Plan: Pay 10% to 15% of discretionary income over 20 to 25 years.
Loan Forgiveness Programs:
DPT graduates may also be eligible for loan forgiveness programs, especially if they work in the public sector or serve in high-need areas:
- Public Service Loan Forgiveness (PSLF): DPTs working in the public sector or for non-profit organizations can qualify for PSLF. After 10 years of employment and student loan payments, the remaining balance can be forgiven tax-free.
- Indian Health Service Loan Repayment Program (IHS): This program offers up to $50,000 in loan repayment assistance if DPTs commit to serving in American Indian or Alaska Native communities for two years.
- Faculty Loan Repayment Program: Offered through the Health Resources & Services Administration (HRSA), this program provides up to $40,000 in assistance with a minimum two-year commitment to become a faculty member at a school for health professionals.
Refinancing:
DPT graduates can also consider refinancing their student loans, especially if they have a stable income and can commit to higher monthly payments. Refinancing involves taking out a new loan with a private lender to pay off the existing federal student loans. This can lower interest rates and shorten the repayment term, potentially saving money over time.
Debt Management Education:
DPT programs that offer debt management education can help students make more informed financial decisions and reduce their overall debt burden. According to a study, participants who received debt management education within their DPT program had, on average, lower student loan and credit card debt.
It is important for DPT students to carefully consider their financial options, research repayment plans, and seek guidance from financial advisors to make informed decisions about managing their student loan debt.
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Debt forgiveness
Another example of debt forgiveness is through income-driven repayment plans. Physical therapists who do not qualify for PSLF may still have a portion of their loans forgiven at the end of their repayment period if they opt for an income-driven plan. However, it is important to note that taxes will apply to any amount forgiven under this option.
Additionally, some employers offer student loan repayment assistance as an employment benefit. Employers can contribute up to $5,250 tax-free each year towards each therapist's student loans. These contributions can significantly reduce the principal and interest payments, enabling physical therapists to pay off their loans faster.
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Working during studies
Working during your studies is a great way to reduce the debt burden you may face as a DPT student. Here are some strategies you can employ to manage your finances while pursuing your degree:
- Part-time employment: Consider working part-time during your studies. This can help you generate an income stream to cover some of your expenses, such as tuition, rent, and food. Look for jobs that offer flexible hours and are compatible with your class schedule. For example, you could work on the weekends or a few evenings per month.
- Summer jobs: Make the most of your summer breaks by taking on summer jobs. This is a great opportunity to earn money without the time commitments of your studies. You could even consider working in a role related to your field of study to gain valuable experience.
- Freelance or side work: Explore freelance or side work opportunities that fit around your studies. For instance, you could offer massage therapy services or undertake research or administrative tasks on a freelance basis. This type of work can provide a good income supplement and also help you develop transferable skills.
- Study abroad and exchange programs: Consider participating in study abroad programs that allow you to work and travel simultaneously. This way, you can gain international experience while also earning an income. Ensure that you plan this carefully so that you can meet your academic commitments.
- On-campus employment: Look for on-campus job opportunities, such as research or teaching assistant positions. These roles often provide a more flexible work schedule and can be a convenient way to earn money while staying close to your classes and other campus resources.
- Financial planning: Develop a financial plan and budget to manage your expenses effectively. This will help you allocate your income appropriately and ensure that you are saving where possible. Websites like Student Loan Planner offer pre-debt consultations to help you make informed decisions about borrowing and repayment strategies.
Remember that balancing work and studies can be challenging, so ensure that you are not compromising your academic performance or well-being. The income generated from working during your studies may not cover all your expenses, so consider combining these strategies with other debt management approaches, such as loan refinancing or forgiveness programs, to effectively manage your DPT student debt.
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Refinancing
To refinance your student loans, you can call a lender and ask them to guide you through their loan application process. They will assess your financial portfolio and background, and if they are satisfied, they will extend an offer. The higher your income and credit score, the more likely you are to get a lower rate.
- Research refinancing interest rates and qualifications across various lenders, including banks, credit unions, and online lenders.
- Evaluate the loan terms and choose a lender whose terms align with your needs and goals.
- Prepare your documents, such as income verification, tax returns, and pay stubs, and fill out the application.
- Continue paying your student loans and keep up with your payments to avoid late penalties and fees.
- Be patient and don't rush into a deal. A few points of interest difference can amount to thousands of dollars over the loan's lifetime.
A shorter repayment period will result in larger payments, and a longer repayment period will reduce the amount you pay each time. Additionally, there may be origination fees and other charges associated with your new loan, so make sure that the fees do not outweigh the savings from refinancing.
If you graduated from an in-state public university and owe less than $100,000, you can refinance that debt to a 10-year fixed rate. Making extra payments can also help you pay it off sooner.
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Frequently asked questions
The average student loan debt for physical therapy graduates in 2019 was $103,482 for those attending a public institution and $138,361 for those attending a private institution. 33.9% of students will graduate with more than $100,000 in student loan debt.
It depends on the amount of debt and the graduate's income. Some sources suggest that it should take no longer than the length of a DPT program (usually 3 years) to pay off the debt.
DPT students can pay off their debt by focusing on paying off loans with the highest interest rates first, refinancing, signing up with the National Health Service Corps, or applying for student debt forgiveness programs such as PSLF.
DPT students can avoid debt by working during their studies, attending a cheaper state school, and receiving debt management education.
DPT student debt is a major threat to the structural integrity of the profession. Students are aware of the financial burden and are prioritizing salary and loan repayment options when looking for their first job.
