Early-Career Psychology

Most people wouldn't see a car accident as a blessing, but for Mark T. Gibson, PhD, an accident became just that. Shortly after finishing his counseling psychology doctorate at Indiana State University, Gibson found himself in a position many early career psychologists recognize: He was $52,000 in debt, working as an unlicensed psychologist and also had a family to support.

"There were times when we'd end the month with $2.37 in the bank account. So I was actually grateful when my wife and daughter were in—but not hurt in—a car accident. We still had our second car and were able to live off the insurance money for a while."

His case might seem extreme, but it's not surprising for the thousands of recent psychology graduates who find themselves faced with mountains of debt. According to the 2007 Early Career Psychologist Survey, conducted by APA's Center for Workforce Studies in the Science Directorate, 74 percent of the survey participants reported debt upon receipt of their doctoral degree. The load for PsyDs was the highest, averaging $102,196, while EdDs and PhDs averaged $47,333 and $57,791 respectively.

How are other early career psychologists paying off their debt?

Loan repayment programs such as the National Health Service Corps or the Public Service Loan Repayment Program are one option.

"I didn't pay a penny of my own money thanks to the National Health Service Corps loan repayment program," recalls Cathy Word, PhD, of the Southwest Arkansas Counseling and Mental Health Center. "It's the best-kept secret around, but we're trying to get the word out."

Word finished her counseling psychology program at Louisiana Tech University with $85,000 in educational debts, she says. During school, she rarely thought of the debt she was accumulating, but after graduating, she did the math and realized that even if she consolidated her loans, she could be paying them off for 30 years.

"That's when it really hit me," she says.

Word considered options such as teaching and private practice, but the answer to her money woes arrived via a former classmate who told her about the loan repayment program.

The program gives up to $50,000 for loan repayment on top of a competitive salary, paid by the hiring organization, to psychologists who work for two years in health professional shortage areas. In the third and fourth years, psychologists can earn an additional $35,000 per year if they continue in the program.

"I was so thrilled by the program that I became an ambassador," Word says. Now she tries her best to get the message to students and early career psychologists alike.

There are two ways to join the program, says Word. First, a psychologist can work for a center that is already qualified, then apply for the loan repayment for themselves. The other option is the one Gibson chose. He accepted a position for Southwest Counseling Service in Green River, Wyo., then heard from a colleague that the center may meet the shortage area requirements. So Gibson applied on behalf of Southwest Counseling Service and when it was approved, applied to the NHSC program.

Two years later, he's debt free and enjoys the work so much he doesn't plan on leaving anytime soon, he says.

More money, more money

For Ken Liberatore, PhD, taking on debt was like a double-edged sword. "You're given the opportunity to obtain a doctoral degree, but the only way you can do that if you're not independently wealthy is to incur a lot of debt," he says.

Like Word and Gibson, he opted to get a position that offered loan assistance to help him pay off his $140,000 debt. He applied to the Public Service Loan Repayment Program, through which he agreed to work for the government—he's at the Federal Correctional Complex in Lompoc, Calif.—for 10 years. In exchange, the government consolidates his loans, reducing the expense of payments. He will make monthly payments for 10 years, then after the 120th payment, the federal government will forgive the remainder of his debt.

"Working where I am and the job security that comes with it is definitely a plus," Liberatore says of the program. "I'm not making as much as someone in private practice, but given the times, working for the government is great job security for me—118 payments from now, I'm going to have a big party."

Similar federal loan repayment options exist through the Department of Veterans Affairs, the Federal Bureau of Prisons and Indian Health Service programs.

The military also provides loan repayment for psychologists who join. For example, the Army's Loan Repayment Program offers $65,000 in loan repayment for highly qualified candidates, including psychologists. The Navy offers an almost identical program, but recruits must have a postsecondary degree. The Air Force also offers loan repayment of up to $10,000.

Putting it off

Loan repayment programs, like many other options for early career psychologists, do require licensure, says Word. So it's important to have some kind of payment plan in place while you work toward that.

Another plan that some psychologists fall back on is loan repayment deferral. It's a great option for psychologists because it provides up to 36 months of leeway for job searches and to work toward licensure. Federal loans can be deferred if you re-enroll or complete a postdoctorate, do not find full-time employment or suffer economic hardship. However, unsubsidized loans will continue to accrue interest, and some types of private and federal loans, such as Stafford loans, do not qualify for deferment. Most loan deferrals can be arranged by contacting the lender.

Deferral is the option Denise Wallace, PhD, used. When she first saw her debt statement, she realized the first payment was most of a month's worth of her salary.

"I called [my lender] and was able to put my fears to rest because they let me know about deferral," says Wallace, who graduated from the Fuller Graduate School of Psychology last year with $100,000 in debt.

As for Gibson, he's out of debt and in a career he loves. "Now my loans are paid off," he says, "but I actually love what I'm doing and have no intentions of leaving at this point because the program has given me a lot more than student loan repayment money."


The APA Committee on Early Career Psychology offers a financial planning handbook for early career psychologists. The informative book provides career-long advice for psychologists, ranging from the first loan they accept as undergraduates through retirement saving techniques. To obtain a copy, and take charge of your debt and other finances, e-mail Kraig Scott.