6 Ways to Conquer Your OT Student Loan Debt
Occupational therapy is such a rewarding profession. There’s not a day that passes that I question if I made the right decision when I went to grad school, and most occupational therapists I speak with feel the same way.
However, there is the undeniable fact that this experience comes with a price: most of us leave OT school with significant student loan debt, with the total cost of OT school averaging between $65,000-$200,000 (with many programs being on the higher end of this range). High student loan debt is far from an OT-specific issue, and it’s looking more and more like something’s going to have to give on the national level.
But for now, it can still be intimidating to stare down the barrel of $80,000 (or much more) that you’re expected to repay. And while I like to kid that my student loans will be forgiven after I’m gone (only half-joking), there are actionable steps you can take now to get a handle on your OT student loan debt. We’ll cover these 6 methods to help you pay down that debt and have one less payment to worry about.
1. Talk to a Financial Advisor
The best advice I can give to anyone before starting their journey of conquering their OT student loan debt is to first talk with someone who is more experienced in these matters. Student loan debt is complicated. For federal loans alone, there are what feels like a billion repayment options, and the automated system online doesn’t always point you to what will be the best plan for you.
This can be dependent on a lot of different things – your income, the type of setting you work in, other forms of income or debts. And these different options will have you repaying vastly different amounts of money depending on interest and other terms of the loan. So it’s best to talk with a professional before throwing your money away needlessly. You might even find that it’s best to pay only the minimum on your student loans until they are forgiven in 25 years and invest your would-be payments for a better return.
It’s highly specific to your personal situation and financial goals, and getting advice from someone who knows the ins and outs of finance could end up saving you thousands.
2. Stick to a Budget
Regardless of what repayment plan you end up choosing, sticking to a budget is key for your financial future. While it can be tempting to treat yourself after finishing school, try as hard as you can to stick to a student lifestyle. Instead of flexing your new OT salary, living below your means can be a huge boon to paying down debt.
Now, this doesn’t mean you have to sit in the dark eating ramen noodles every night, but it does mean trying to do everything you can to avoid that lifestyle creep. Put off buying a new car or upgrading your apartment. Teach yourself how to cook at home, if you don’t know already. Make a game of finding frugal entertainment. Some of my favorite things to do cost no money at all – going to the public library, hiking, or even just walking around town.
The best part of this lifestyle is knowing that it’s only temporary – even if you can just stick to a year or two of this, you will make a serious dent in your debt.
3. Work PRN
After figuring out the best repayment plan and budget for your needs, the best thing you can do to decrease debt is to increase your income. Luckily, as OTs, we have an easier time doing this than other professions because of PRN jobs. While I was looking for employment at the end of grad school, one of the first things I did was get on the PRN list for a group of SNF and ALFs in my city.
This process was as simple as filling out an application and completing a quick phone call with a person from HR – there was no formal interview for me, even for a new grad. I was then able to supplement my income with this while my caseload built up at the pediatric clinic I ended up working for, and I continued to work some Saturdays in my first year out of school whenever I felt like I needed a little extra cash.
Some therapists have even been able to make full-time employment out of working several PRN jobs [like Sarah, founder of My OT Spot!]. Since PRN rates are typically higher than full-time jobs, this can be more lucrative if you don’t require company health insurance or other benefits. What I also like about PRN is that it gives you the option to keep your skills fresh in multiple settings – something most full-time jobs alone can’t offer.
4. Consider Travel Therapy
As a travel therapist I’m biased, but I think travel therapy is the best way to get on top of your student loan debt. Being more financially solvent was certainly at the top of my list when I was considering taking the leap. For me, it’s been a win-win-win: I love traveling, I’m making almost double what I was in a permanent job, and I’m learning so much more than I would’ve expected.
While this lifestyle is not for everyone, and I realize that there are barriers that make it hard to get started, I would advise everyone to think about giving travel a try, even if it’s just for a short 3-month contract. If you think travel therapy might be for you, check out my top tips on what to know before you get started here.
5. Public Service Loan Forgiveness
I’m somewhat hesitant to even mention this one because of the poor success rates. According to the Department of Education’s data from last year, only 8% of applications were approved, but applying for this is still worth considering if you might be already fulfilling some of the requirements anyway.
The premise of the Public Service Loan Forgiveness Program is simple: work for a nonprofit or government organization and make 120 on-time student loan payments for 10 years, and the rest of your debt will be forgiven.
Unfortunately, this program is still in its infancy, and it seems it still has a lot of kinks to work out. When the first round of applicants became eligible in 2018, only 206 applications out of 41,000 were approved, with the government citing missed eligibility requirements as the largest issue.
This is why it’s so important to ensure that you have the correct loans, on the correct plan, making the correct payments – so definitely consult a financial advisor if this is your plan. If you do decide to go this path, it may be best to have a back-up option due to the lack of success so far.
When deciding between jobs, it may not be worth taking a $20,000 pay cut vs. working in the private sector on the basis that your loans will be forgiven under this program. But if you have your heart set on working in the schools or for a non-profit hospital, it’s a good idea to go ahead and set this plan up very carefully.
6. Leveraging Your OT Skills Elsewhere
One last consideration I would like to suggest is finding creative ways to use your occupational therapy skills to obtain additional income. While working PRN can be great, sometimes it’s nice to have a change of pace. So get creative and think of how you could utilize all of that new OT knowledge.
For me, freelance writing for blogs like My OT Spot has been a nice way to supplement my income. I’ve also been able to create study guides, CEU courses, and test prep material.
I’ve known other therapists who create therapy materials and sell them online or write e-books that help OTs or other professionals. I’ve also met occupational therapists who take on home modifications, ergonomics consulting gigs, or teach handwriting camps over the summer. The possibilities are only limited by what you can dream up.
The flexibility of picking up some additional remote occupational therapy work like these non-clinical options that you can often do in addition to fulltime work is a great way to add to your salary and in turn help you pay down your loans even faster.
Student loan debt can be overwhelming, but try to remain calm and know that it will be gone someday one way or another. You can make that day sooner rather than later by taking steps now to get in control of your debt.
Despite all the frustrations that occupational therapy school student loan debt brings, I would not hesitate to make the same choice again to participate in this wonderful profession.
Do you have any other ways that you’ve combated your OT student loan debt? Please share what you’ve done in the comments below!
This post was originally published on October 2, 2019 and updated on December 7, 2023.