Welcome The Webinar Will Begin Momentarily

Transcription

1 Welcome The Webinar Will Begin Momentarily While yo won t be able to talk dring the webinar, we encorage yo to sbmit qestions for the presenters sing the chat fnction. We have more than 1,000 attendees today and will do or best to answer as many qestions as possible. Today s presenters inclde: Dr. Nabil El-Ghorory, Associate Exective Director, APAGS Dr. Matthew Soldner, Principal Researcher, American Instittes for Research Dr. Mary Bell Carlson, Principal, Silverbell Soltions, L.L.C. Kaitlin Pitsker, Staff Writer, Kiplinger s Personal Finance magazine

2 PsycIQ The High Cost of Helping: Grad Stdent Debt in Psychology Jly 11, 2016

3 Dr. Nabil El-Ghorory Associate Exective Director, APAGS

4 Debt Loads for Gradate Stdents & Early Career Psychologists Doran, J. M., Kraha, A., Marks, L. R., Ameen, E. J., & El-Ghorory, N. H. (2016). Gradate debt in psychology: A qantitative analysis. Training and Edcation in Professional Psychology, 10(1), 3-13.

5 Psychologists Delaying Life Events Doran, J. M., Kraha, A., Marks, L. R., Ameen, E. J., & El-Ghorory, N. H. (2016). Gradate debt in psychology: A qantitative analysis. Training and Edcation in Professional Psychology, 10(1), 3-13.

6 Wold Yo Choose Psychology Again, Given Yor Edcational Debt? Doran, J. M., Kraha, A., Marks, L. R., Ameen, E. J., & El-Ghorory, N. H. (2016). Gradate debt in psychology: A qantitative analysis. Training and Edcation in Professional Psychology, 10(1), 3-13.

7 Dr. Matthew Soldner Principal Researcher American Instittes for Research Kaitlin Pitsker Staff Writer Kiplinger s Personal Finance Dr. Mary Bell Carlson Principal Silverbell Soltions, L.L.C.

8 Gradate Indebtedness: Its Extent and Conseqences Matthew Soldner, Ph.D. Principal Researcher American Instittes for Research

9 Annal Cost of Doctoral Edcation $ 17k à $ 41k Tition & Fees Total Price of Attendance Sorce: National Postsecondary Stdent Aid Stdy, U.S. Department of Edcation National Center for Edcation Statistics

10 Among Doctoral Stdents With Loans $ 18,300 In Loans Annally Sorce: National Postsecondary Stdent Aid Stdy, U.S. Department of Edcation National Center for Edcation Statistics

11 It Begins to Add Up! Many Psychology programs take at least 5 years. $ 18,300 x 5 = $ 91,500

12 Under Varios Repayment Plans Cmlative Debt (Direct Consolidation Loan) Standard Plan (360 mos.) Revised Pay as Yo Earn (Earning $55,000) $75,000 $440 $310 to $980 (246 mos.) $90,000 $538 $310 to $1,155 (288 mos.) $105,000 $616 $310 to $1,219 (300 mos.) $120,000 $704 $310 to $1,219 (300 mos.)

13 What Does This Mean for Earnings? Payment Amont Annal Earnings Needed to Spport $400 $60,000 $500 $75,000 $600 $90,000 $700 $105,000 $800 $120,000 $900 $135,000 $1000 $150,000 Median psychologist salary $77,000

14 For Those Still Completing Their Degree We help edcate stdents and families abot Retrn on Edcational Investment. It all boils down to redcing costs and maximizing retrns. Crrent gradate stdents have likely already redced costs as mch as possible. Bt if yo are not spported throgh an assistantship within yor Department, consider other places on camps: Ex. Stdent Affairs nits Complete as qickly as possible to minimize actal and opportnity costs. Remember that wage retrns are a fnction of the interaction between specialty (e.g., I/O verss conseling) and indstry setting (e.g., corporation verss clinic). Develop adjacent, marketable skills. Training and development. Qantitative analysis.

15 Early Career Psychologists If yo have taken on sbstantial debt, pay close attention to Pblic Service Loan Forgiveness, and eqivalent options. Once costs are fixed, maximizing retrns becomes more important. Don t forget yor training! Positive Psychology is on to something: think expansively abot yor skill set and all that yo are prepared to do. Channel yor inner Ellis: let go of shold and mst, and instead focs on where and how yo can apply yor training to greatest effect. Delinqency and defalt will have serios conseqences for yor financial ftre. Before things get difficlt, contact yor stdent loan servicer.

16 The Psychology of Debt Dr. Mary Bell Carlson Principal Silverbell Soltions, L.L.C.

17 The Emotional Effects of Debt Depression & Anxiety Resentment Denial Stress Anger & Frstration Regret Shame & Embarrassment Fear

18 Freedom from Debt Feelings of relief, freedom, & accomplishment Redced anxiety & stress Increased self-esteem Better financial behaviors Improvement in mental and physical health

19 Where to Begin Start a discssion with yorself or yor partner Commnicate abot yor feelings related to the debt & money in general Ideas for qestions to discss: What does money mean to yo? Why is money important to yo? Or is it? How were yo taght abot money? What are yor financial strengths? weaknesses? What are some ways yo can improve those weaknesses? How do yo manage/organize yor money?

20 Action Plan Find an expert to help Afcpe.org (financial conseling) Letsmakeaplan.org (financial planning) Prioritize Set short (<2 years), mid (2-9 years) and long-term (>10 years) goals Spend according to yor priorities Make a plan of action Stick with the plan Celebrate accomplishments along the way

21 Strategies and Tools for Managing Stdent Debt Kaitlin Pitsker Staff Writer at Kiplinger s Personal Finance Magazine

22 Overview Federal Stdent Loan Repayment Plans Federal Stdent Loan Benefits Pblic Service Loan Forgiveness Refinancing Private Loans Additional Tools and Tips

23 FEDERAL LOANS Pick a Different Repayment Plan If federal stdent loan payments are sinking yor bdget, consider a plan that stretches the loan over a longer period or that gradally increase the monthly payment amont. The longer the repayment period, the more yo ll ltimately pay, so pick the plan with the highest monthly payment yo can afford. Eligibility and monthly payment amonts are based on: Types of loans yo have How mch yo owe Yor income Yor tax stats and family size Compare yor repayment plan options at Stdentloans.gov. Click Repayment Estimator nder Managing Repayment

24 Federal Stdent Loan Repayment Plans Standard Repayment Pay the same amont each month ntil yor loan is paid off Yo ll pay less over time than nder other plans Or, if yo qalify, select an income-based plan that lets yo pt 10% to 20% of yor discretionary income toward yor loans for 20 to 25 years, after which any remaining amont is forgiven. Pay As Yo Earn (PAYE) and Revised PAYE Income-Based Repayment Plan (IBR) Income-Contingent Repayment Plan (ICR) Income-Sensitive Repayment Plan To find a repayment plan that works best for yor bdget, visit

25 EXAMPLE 1: Total federal stdent loan debt of $110,000 Calclations inclde $30,000 ndergradate federal debt, $80,000 in gradate school debt and a mix of direct federal loans. Average interest rate 5.5%. Starting salary of $72,000 with an annal 5% increase in income.

26 EXAMPLE 2: Total federal stdent loan debt of $160,000 Calclations inclde all debts from previos example, pls $50,000 in PLUS loans. Average interest rate 5.5%. Starting salary of $72,000 with an annal 5% increase in income.

27 An Easy Way to Save No matter which repayment plan yo select, consider enrolling in the servicer s atomatic payment program. Direct debit helps ensre on-time payments Yo ll typically qalify for a 0.25-percentage-point interest rate redction

28 Benefits of Sticking with the Feds If yo re considering refinancing yor Federal stdent loans with a private lender, consider the federal loan benefits yo wold be giving p. Deferment and forebearance allow borrowers to postpone or redce payments dring nemployment or other economic hardships Abot 25% of U.S. workers are in pblic-service jobs that may qalify them for Pblic Service Loan Forgiveness after 10 years of payments nder a qalified income-based repayment plan. Perkins loans also carry generos forgiveness provisions that disappear dring consolidation

29 Pblic Service Loan Forgiveness Certain pblic service workers can have their remaining stdent loan balance forgiven after 10 years. Mst work fll-time for an eligible organization government, 503(c)(3), some other not-for-profits for 10 years Forgiveness occrs after 120 on-time monthly payments are made; clock starts ticking after yo consolidate the loans Think yo may qalify? Visit the Department of Edcation's Pblic Service Loan Forgiveness program page. For those who qalify: Sbmit an Employment Certification for Pblic Service Loan Forgiveness form to the Department of Edcation to find ot how many qalifying payments yo ve made. Yo aren't reqired to sbmit the form ntil yo ve made the 120 payments, bt it s a good idea to do so every few years and when yo change employers.

30 PRIVATE LOANS Refinancing If yo have good credit, a stable job and steady income yo may qalify for a lower interest rate. Yo ll typically have a choice between a fixed or variable interest rate. Most lenders offer terms in five-year increments from five to 25 years. Some lenders will allow yo to select yor repayment term. Yo may score a lower interest rate if yo agree to a shorter repayment period. Contact yor crrent loan servicer or bank as well as a few other lenders to get several qotes and compare interest rates and terms. College Ave Stdent Loans, Citizens Bank, Darien Rowayton Bank, Wells Fargo Nontraditional lenders se different standards to qalify applicants or cater to a certain demographic. If yo work in a high income field or have strong credit may want to consider companies sch as CommonBond and SoFi.

31 Additional Tools for Managing Stdent Debt Track down information on yor federal stdent loans in the National Stdent Loan Data System: A loan-management tool, sch as the one at Iontition.com, can help yo organize and track yor loans. Use a bdgeting site sch as Mint For more details on refinancing and consolidation, please see my recent Kiplinger story And for more abot stdent loans and other personal finance topics, visit Kiplinger.com

32 Q&A Session

33 Dr. Nabil El-Ghorory Associate Exective Director, APAGS Dr. Matthew Soldner Principal Researcher American Instittes for Research Dr. Mary Bell Carlson Principal Silverbell Soltions, L.L.C. Kaitlin Pitsker Staff Writer Kiplinger s Personal Finance

34 Contact the Presenters Dr. Nabil El Ghorory, American Psychological Dr. Matthew Soldner, American Instittes for Dr. Mary Bell Carlson, Silverbell Soltions, L.L.C. Kaitlin Pitsker, Kiplinger s Personal Finance magazine The slides sed today will be posted on APA s website in the coming weeks.