How to Cope With Physical Therapy Student Debt

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We all came into this profession with the idea that we will make waves of changes and have a lasting impact throughout our career, but what we didn’t anticipate was how deeply our lives would be impacted by the amount of student loans we signed up for. Coping with debt from student loans can be exceptionally difficult if you graduated with a Doctorate in Physical Therapy.

In June 2020, the APTA released a report that stated: “Nearly 93% of recent physical therapist graduates are carrying debt, at an average of $152,882 for all debt except mortgages. For 90% of these PTs, that amount includes considerable outstanding balances in education-related loans; the average amount is $142,489…”

This number grows each year and more new grad PTs have loan balance of $200,000 or more as of 2022.

Given that new grad physical therapists seeking outpatient type work being earning $60,000 upon graduation, it becomes extremely difficult to cope with debt nearly 2 – 3x their income. 

This got me curious about the professions with the worst debt to income ratios and here’s what I found.

Comparing Top 5 Professions with the worst Debt to Income Ratio

Currently, nearly all the articles on Google’s front page have agreed that these are the top 5 professions with the worst debt to income ratio:

  1. Optometrists
  2. Veterinarians
  3. Physician Assistants
  4. Dentists
  5. Pharmacists


Honestly, I was surprised by this list except for Veterinarians. All other professions easily make over 6-figures. In my opinion, Physical therapists do not get enough attention when it comes to our debt.

Even one of the most famous financial voices, Remit Sethi, agrees that PTs along with Veterinarians has the worst return on educational investments. He mentions it in this podcast episode.

Physical therapists graduate with an average of $142,000 (from 2020 data) at 6.2% APR leading to a monthly payment of $1,600 for 10 years on the standard repayment plan. Given an average entry level PT earns $60,000, it is clear PT have it the worst paying 31.8% of their pre tax earnings towards student loans! More than twice as much as an optometrist, which is the worst profession in terms of ROI as noted by Credible.

When calculating after tax earnings, assuming no other deductions, $60,000 a year would take home roughly $42,000 per year or $3,500 per month. With monthly payment of $1,600, new physical therapists would need to place nearly half their income towards their student loans just to meet the monthly minimum payments.

Once you calculate food, housing, transportation, insurance, and unexpected expenses even entertainment becomes tough to come by. Forget about saving for retirement.

Where does this leave Physical Therapists?

How else do you treat debt you will probably never pay back?

Obviously, you’d bump it to the bottom of your to-do list because nothing can be done about it.

Just kidding! Ideally, you’d address the issue head on and formulate a strategy to improve your financial wellness. Unfortunately, many students who carry a large student loan balance end up waiting a little longer than they should have before addressing the growing issue.

As healthcare professionals, we need to take care of ourselves to be better positioned to take care of others. That includes taking care of your financial health. You deserve that much. Unless you have a crystal ball guaranteeing you to become the next dogecoin millionaire, waiting will only guarantee more financial hardship later.

As of mid – 2022, the U.S. Government extended the pause in federal student loan payments for the 6th time until August 31, 2022. Who knows how long they will do this for as it seems to be constantly used political leverage for one party or the other. For now, take a breath and come to terms with your debt. You have time to save and improve your finances in the event that you need to begin paying your loan balance again.

Step 1: Coming To Terms With Your Debt

It is difficult to confront something you don’t know how to overcome, especially with something that you can seemingly ignore from time to time. Out of sight, out of mind right? But you need to come to terms with your debt sooner than later. Some people delay directly addressing their student loans in hopes of the federal government forgiving their debt either in part or in whole. However, the U.S. federal government has been shown to be quicker to bail out corporations than the students and young professionals of this country.

The best chance you have to get rid of these loans is by acknowledging them and addressing them directly. Afterall, compounding interest is one of the most powerful things in the financial world and in the case of student loans, you need to find a way to let it work for you, not against you!

This is the best time to have compound interest work for you as the pause on student loans continue.

Exercise Break!

If you do nothing else today about your loans, do this exercise (not a physical one):

Get a pen or marker, write down how much you owe. Stick that paper on the wall of your desk or wherever you spend the most time in your house. Trust me, you’ll deal with the debt sooner or later.

Okay, you got the hard part out of the way. Now take a breath! Unwind a little bit, write in your journal, exercise, or just have a cup of coffee and listen to your music of choice. Make sure your mental health is ready to get back into the game, because the journey is just beginning.

Step 2. Take Your Financial Pulse

Just like when we assess our patients’ baseline, you need to assess yours. Write down your estimated earnings and expenses each month. Are your numbers acceptable by your standards or are there some things you’d like to change?

Here are some categories to get you started:

  • Housing
  • Food/Groceries
  • Transportation
  • Loans
  • Insurance
  • Utilities
  • Subscription Services
  • Entertainment
  • Vacations
  • Emergency Fund
  • General Merchandise

Step 3. Reconsider your setting

Sometimes to make your student loan strategy, you may need to embrace the unexpected. We all had this vision of our ideal workplace and ideal version of our professional self. Unfortunately, this vision of ourselves may not be realistic with where we want to be financially. While you need to be satisfied with the work you are doing, you need to ensure that you’re not going to stay broke in the process. Your goal is to find that balance between how much you want (or need) to earn vs where you want to work.

For those not working within the PT/OT/SLP profession, they may be surprised that the one of the main factors that affect your physical therapy salary isn’t your experience or qualifications, it’s the setting you choose. It is fairly common to find a PT 1-2 years out in home health or travel therapy earning more than a physical therapist with 20 years experience in outpatient. I write about this more in this article: Can Physical Therapist Earn 6-figures?

So if you’re serious about earning more, consider picking up extra hours in a high earning setting. With the opportunity for overtime hours being limited as a physical therapist, it is often easier finding a PRN job or a part-time job with another company. After all, you can only save so much money and clip so many coupons before you run out of ways to save. 

Step 4. Solidify your student loan payment strategy

I believe there are 4 key strategies when you need to begin making payments again. As a simple rule of thumb, if your debt to income ratio is less than 2:1, try to pay off your loans as strategically as possible. There are several routes you can take:

1. Use an income driven repayment plan:

  • PAYE, IBR, REPAYE, or ICR. Pay the minimum and invest the difference. By the time your loans are forgiven either in 20 or 25 years depending on the plan, your investments may be able to pay off the tax bomb assuming it is still relevant. However, it carries some risk and a special mindset to go through this route. The main problem with this strategy is that few people are able to save the difference and even fewer will be able to put that difference towards investments on a consistent basis. With the right mindset, commitment, automations, and asset allocation, this is a winning strategy. For most, it is like saying you’ll never miss a morning workout for the rest of the year.

2. Pay off your loans aggressively:

  • The sooner you pay off your loans, the less the interest rate has an effect. I had $107,000 in student loans when I graduated and initially planned going the public service loan forgiveness route. During the first year, I accumulated $7,000 of interest before I decided to pay it off aggressively. During my aggressive payoff phase, I paid $700 of interest which would have been lower had I refinanced. Point being, if aggressively paying off your loans within 1-2 years, the technique whether using a debt avalanche or debt snow ball technique matters less.

3. Pay off your loan semi-aggressively:

  • This is a hybrid of the first two. If you do not want to go through the process of loan forgiveness. You may consider refinancing your loans at a lower interest rate and pay it off at your desired speed. You may refinance multiple times to lower your annual percentage rate and your payment amount.

4. Public Service Student Loan Forgiveness

  • If your debt is twice as much as you earn, the chances of you paying it off while trying to live your life may go beyond more years than you’re willing to tolerate.
  • That being said, it may be best to look into public service loan forgiveness. There are a lot of considerations to take into account, but it can be the best move depending on your situation.

If you want more tips, download my free guide on paying off your student loans.

5. Communicate with like-minded individuals

Lastly, communicate with like minded individuals. There is a saying that you are the average of the 5 people you spend most of your time with. There is a lot of truth to this, but that doesn’t mean you need to abandon everyone else. Instead, you can communities on Facebook groups, Reddit, Twitter or other social media platforms are great places you can engage with people who are looking to accomplish similar things. The communities I engage with regularly during different seasons of life has helped me greatly in achieving my goals quicker than I would’ve otherwise.

The amount of student loan debt that physical therapists graduate with is only growing. The longer it persists, the worse it will get for clinicians and our patients. Working together to help each other improve our financial well-being can only help.

Final Thoughts

Creating a plan should ease your financial worries for when or if the U.S. government stops extending the pause. In the interim, create a plan to save more, make career moves, diversify your income streams, and learn to invest consistently. Do this and no matter what happens, you’ll be better off in the end.

What are your thoughts? What this helpful for you? Anything you would like to see me write about next?

Comment below.

If you found this helpful, please share it with others. Your peers, your classmates, your students. It will only help others and help me produce more content like this.

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