hen Courtney Bancroft finished psychology
graduate school in 2014, she left with two things that would
significantly impact the course of her future: a doctoral degree
and student debt of $251,000.
Bancroft had attended a private university in Los Angeles
and pursued a PsyD in clinical psychology with a focus on
substance use, but she started doubting her career aspirations
when she discovered the daunting reality of compound interest.
Using a standard federal loan repayment program, she was
expected to pay back $2,900 per month — and shell out more
than $700,000 over the course of 20-plus years.
“It was really overwhelming,” says Bancroft, 29. “I felt afraid,
burdened and frustrated that I would be paying back more than
double my loan for borrowing money to do something that
would help people.”
Her antidote for the fear was gathering as much information
as possible about debt repayment options. She talked to loan
agents, colleagues from graduate school, psychology interns
and professors, and slowly the sense of despair began to lift.
By making a few strategic choices when selecting her first job
and loan repayment plan, she could secure a more reasonable
monthly payment — and get out of debt much earlier.
According to the APAGS 2014 Debt Study (see www.apa.
Lowering monthly payments
org/apags/resources/debt.pdf), Bancroft’s situation mirrors the
conundrum that many psychology doctoral students face upon
graduation — particularly those in programs in which little
funding is available for students. A survey of doctoral graduates
from 2013 and 2014 found that 91 percent of the PsyD students
and 77 percent of PhD students in clinical, counseling and
school psychology programs graduated with debt. The median
graduate loan debt was $200,000 for PsyD students, compared
to $75,000 for PhDs.
The problem is compounded by the fact that the starting
income level is often significantly lower than one’s debt balance.
The median full-time annual salary ranged from $55,000 to
$65,0000 for recent graduates, according to the study. While
it may be tempting for early career psychologists to avoid
discussing their debt dilemmas with others, financial counselor
Thomas Duffany urges them to fight the instinct to isolate.
“Most of us shy away from communicating with others
when we are not coming through on an obligation,” says
Duffany, who works for the Association for Financial
Counseling and Planning Education in Virginia. “If you are in a
situation of financial hardship, it’s important to talk to lenders
or other financial professionals before you are in trouble. There
are several alternatives for people who have considerable debt
compared to their income, but once you have missed a payment
and you become delinquent, you are not eligible for those
Bancroft, for example, learned that she was eligible for an
income-based repayment program because her loans were
federal and the payments were not manageable given her
A look at solutions
for students who face
formidable loan repayments.
By Heather Stringer