Physical therapists are highly skilled and well-trained professionals who help patients recover from injury or illness. As the U.S. population ages, demand for physical therapists is only expected to grow. The Bureau of Labor Statistics (BLS) estimates that employment for physical therapists is expected to grow 28% from 2016-26, much faster than average.
In addition to projected job growth, you’ll want to know how much you can earn throughout your career and the average cost of education for the field. Ever since the American Physical Therapy Association (APTA) passed its Vision 2020 guidelines, all licensed physical therapists are required to earn a Doctorate of Physical Therapy (D.T.P.).
This can add another three years of school. And more school, of course, means more tuition. And more tuition usually leads to more student loans. Here’s how a physical therapist salary stacks up against student loans.
Physical therapists graduate with more student loans than anticipated
In WebPT and Evidence in Motion’s “The State of Rehab” report, (a massive study that included responses from over 6,800 physical therapists), they found six in 10 physical therapists will graduate with over $70,000 in student debt.
Even more alarming, they found more than one-third will finish with over $100,000 in debt, and over 11% will have more than $150,000 in student debt. These higher numbers match up with the student debt totals Student Loan Planner consultants have seen from practicing physical therapy clients.
Putting physical therapist debt into perspective
The average debt for bachelor’s degree graduates is $28,500. For the sake of example, let’s say you ended up with $100,000 in student loans after graduating with your D.P.T. That would be an extra $71,500 in student debt than the national average.
As we’ll see in a moment, physical therapist salaries haven’t been rising as quickly as student loans. Brett Kestenbaum, Chief Operating Officer of Covalent Careers, a health care professionals career development company in San Diego, is worried this could cause physical therapists to begin abandoning physical therapy as a career path.
He says, “With the debt-to-earnings ratio increasing, physical therapists will likely start looking for alternative sources of income. This may cause an increase in professional drop-out rates over time.”
How much do physical therapists make?
The average physical therapist salary is around $88,000. But how does that compare to the average college graduate without an advanced degree? According to the BLS, the average wage for a college graduate is right around $70,000 a year.
On average, D.P.T.s earn an extra $18,000 in annual income. If we assume you’re able to sustain this income as a physical therapist for your entire 30-year career, that’s a total of $540,000 in added wages.
So far, that’s a pretty great return on an extra $71,500 in student debt. But there are still more factors to consider.
Remember those earnings are going to be taxed. If we assume a tax rate of 40%, then $216,000 will end up in Uncle Sam’s pocket instead of your own.
That leaves us with an actual difference of $324,000. So now we’re talking about you having an extra $324,000 in income to pay off the extra $71,500 in student debt.
Again, doesn’t seem like a bad deal on the surface.
What still hasn’t been taken into account yet is interest cost. Many student loan borrowers spend 20 to 25 years paying off their massive loans. And interest will continue to accrue each year they are not paid off.
Another thing to consider is the investments (like home ownership or 401(k) contributions) you might delay because of the limited cash flow your student loan payments will cause.
Let’s take a closer look at what student loan repayment looks like for a physical therapist.
Physical therapist student loan repayment options
Let’s say Jared has $100,000 in student loans at 7%. His physical therapist starting salary is $65,000. Let’s also say that Jared is not married and that his income will grow at 3% per year.
Now, let’s compare four different payment options:
- Revised Pay As You Earn (REPAYE)
- Pay As You Earn (PAYE)
- Public Service Loan Forgiveness (PSLF)
- Refinancing into a 10-year fixed rate at 5.5%
Immediately, you’ll notice PSLF is by far the best option. This is a game-changer for those who can qualify. Not only does PSLF allow borrowers to have their loans forgiven 10 years earlier than PAYE, but the forgiven amount is not taxed.
But what if Jared is unable to find employment at a nonprofit hospital or wants to open his own practice?
Best physical therapist repayment options when PSLF is unavailable
In this case, Jared’s next best option financially would be to refinance into a new 10-year private student loan at 5.5%. This would allow him to save $41,000 and $63,000 over PAYE and REPAYE, respectively.
If cash flow is Jared’s biggest concern, then his best choice would be PAYE. At the beginning of repayment, PAYE would free up nearly $700 in Jared’s monthly budget over refinancing. Yet PAYE would also cost $22,000 less than REPAYE over the life of the loan.
Yes, you’ll pay $41,000 more in total out-of-pocket payments with PAYE over refinancing. But, remember that Jared would have an extra 10 years to make those payments. And in the meantime, his cash flow situation would be far more manageable.
Higher student loan balances change the discussion
If Jared owed $250,000 or more, choosing an income-driven repayment plan would become more of a no-brainer.
At that point, REPAYE would cost slightly less and PAYE would cost slightly more than refinancing over the life of the loan. And monthly payments would be dramatically lower all along the way.
Is a physical therapist salary worth the debt?
When it comes to whether or not a physical therapist salary is worth the student loans, there are three factors that need to be considered:
- Cost of the D.P.T. program
- Location of employment
- Type of job
Let’s take a look at all three factors to see how they change the value of education for physical therapists.
Cost of the D.P.T. program
The best way to increase the chances that your physical therapy salary will be worth the debt is to decrease the cost of your education. As with most degrees, the cost of DPT programs depends largely on where you go to school.
There’s a huge disparity between the average annual tuition of D.P.T. programs at state versus private schools.
- Public in-state: $14,427 (range: $3,387 to $45,340)
- Public out-of-state: $29,157 (range: $8,425 to $65,156)
- Private: $31,716 (range: $19,500 to $94,020)
If you’re looking to begin a D.P.T. program, always check to see how much it would cost to enroll in one of your state schools. There are many high-quality state schools that offer D.P.T. degrees for less than $45,000 in total.
If you happen to live in a state that doesn’t have a public university with a competitive D.P.T. program, enrolling in another state’s university could still save you money over a private school.
Location of employment
The second key factor that will determine whether becoming a physical therapist makes sense financially is where you decide to start your practice. A physical therapist starting salary in the best-paying states could be higher than what 10-year veterans make in lower-paying areas.
California, for example, has long been one of the best places for physical therapists to work.
- The average physical therapist salary in California is $95,500.
- California also has the highest employment level for physical therapists.
- The highest-paying metropolitan area in the U.S. for physical therapists is Merced, California.
Texas is another great place to practice physical therapy. Currently, the average physical therapist salary in Texas is nearly $96,000. And remember, Texas has no income tax.
On the other hand, New York pays a middle-of-the-road average physical therapist salary of $84,500. That’s not terrible. But New York is also the state with the third-highest cost of living. Having merely an average salary coupled with above-average expenses is a bad combination for physical therapists who want to pay off student loans quickly.
Where you choose to work as a physical therapist also affects your ability to own your own rehab clinic. Let’s say a physical therapist in New York has $150,000 in debt. With an income of $60,000 to $85,000 and a high cost of living, saving up enough money to own an outpatient rehab will be tough.
Type of job
The actual job you choose inside physical therapy can make a big difference on the return you receive from your student loans. For example, physical therapists who own their own practice could make significantly more than the national average of $87,000.
Becoming a travel physical therapist
Travel therapy is another option that is becoming more popular. Travel therapists usually get their relocation costs covered and their licensing fees and housing paid for as well. And to top it off, traveling therapists usually receive much better pay!
Becoming a physical therapist assistant (PTA)
While physical therapists are required to achieve a doctorate degree, you only need an associate’s degree to become a PTA.
The average physical therapy assistant salary is nearly $47,000. That may seem like a lot less money than a physical therapist makes. But keep in mind we’re talking about at least five fewer years of school and tuition cost.
And don’t forget that PTAs can start actually making money five years earlier as well. Going with the average physical therapy assistant salary of $47,000, that’s $235,000.
Yes, that means a PTA could feasibly have already made $235,000 by the time a physical therapist is just finishing their D.P.T program.
If becoming a PTA required a bachelor’s degree, that would change this discussion. But for now, if you’re passionate about physical therapy and want to avoid big student loans, becoming a physical therapy assistant is definitely worth considering.
Physical therapists need a plan for student loan repayment
It’s important to point out that finances aren’t the only factor to consider when choosing a profession. Personal satisfaction and a sense that you’re fulfilling your calling are important as well.
In fact, the “State of Physical Therapy” surveyors were surprised to find how happy most physical therapists were despite the difficult financial situation many found themselves in. A clear majority of those surveyed said that they liked their job and would recommend it to young people.
That said, physical therapists need a plan to pay off their student loans. Even in states where it doesn’t seem to make sense to be a physical therapist, you may be able to change that with your student loan strategy.
Student Loan Planner has done over 2,000 student loan consults for clients with over $500 million of student loans. Student Loan Planner consultants can help you figure out the optimal path in just one hour. Book a student loan consultation today.