Post 82: student loan debt

“Various authors have argued for and against the effects of several factors on increasing costs (of college education), including growing numbers of institutional administrators, increasing federal regulation, new campus buildings to attract students, rising costs of employee health insurance, costs of intercollegiate sports, and an increasing proportion of professors staying beyond traditional retirement age”
 
Debt has become a crisis not only among PT students, but across the board for students of all disciplines. Dave Ramsey, Author of the Total Money Makeover and other national best sellers, speaks of this problem frequently on his show. He notes that the cost of education has gone up not just because of administrators but also because of an increase in other personnel also, such as secretaries. I was about $80,000 in debt graduating from PT school and this is about half of what some of my current student’s debt load look like. This is scary. I can’t image the burden that these students will have coming out of college, especially if the increase was to go towards more secretaries and administrators throughout the university

“The result is that over the past 3 decades, tuition and fees have increased approximately 210% at 4-year public universities and by approximately 130% at private 4-year nonprofit institutions, while median household income has increased by approximately 2%.”

Something smells fishy here? If the average median salary has only gone up 2%, this is an income issue. Seems that those that have gone into higher education have not done much to increase their overall salaries. Let’s take a for instance. When I quit Sam’s club, I was making about $32,000 per year. This is a lot of money for no education or experience needed to start. I studied to be a teacher and raked up about $35,000 dollars in debt and this is with taking all available credits at a community college paying cash for the first two years. The average starting salary for a teacher in Illinois is about $37,000. Let that sink in, I went to school for 6 years to get an undergraduate degree (insert slow joke here). I worked full time through most of my college years. All of this would have been to make an extra $5K? Enough of that…Let’s go back to school! I accumulated another $50,000 in debt in order to make $62,000. Although I had a big hole to dig out of, I went out and bought a bigger shovel. After 8 years in practice, I am making north of 80,000. This is about a 29% raise over the course of the 8 years, averaging 3-4% raise per year. In that same time, the cost of school has increased at double the rate that my salary is improving. Again, Dave talks about this all of the time on his podcast. This just seems like a large hole for current students to dig out of, as the size of their shovel is proportionately smaller to their debt load than mine (This is one case in which size matters).

“Consequences of high student loan debt are reported to include delays in starting families, buying homes, or saving for retirement. Some evidence suggests that student loan debt influences decisions about where to work or live, with increase importance of salary and cost of living in decision making.”

One theme that I notice in my students is that they have no idea how much total debt they have. I encourage all PT students to pay attention to this number and try not to let it grow out of control. This number may dictate how you practice your craft for your entire career. If you are so focused on your salary, you may neglect mentoring opportunity. You may choose not to spend more money on continuing your education than you have to spend. You may choose to live a cheaper lifestyle in order to abolish your debt. Go check out another new graduates blog posts how he is going about financial independence. https://fifthwheelpt.wordpress.com/

I chose to live with my parents for the first 9 months in practice. This may not be the most attractive, but I was able to bank $25,000 to save for a wedding. I hear students talking about buying new cars and houses and traveling and chuckle to myself before dropping the financial hammer. All college students need to be aware how much their education costs and treat it like any other business transaction, find the best value for the dollar. 

“…the aggregate limit for graduate or professional students is $138,500. Aggregate loan limits for private student loans are $75,000 to $120,000 for undergraduate students and limits for graduate and professional students are higher.”

Shaking in your boots yet!? Think about these numbers! This is a mortgage…AND YOU STILL DON’T HAVE ANYPLACE TO LIVE YET! There are ways of making this blow a little easier to manage and I would advise all PT students to check out http://williambutler.nm.com/ This guy has gone through your education and then some. If you don’t contact him, that’s fine, but at least Google some of the podcasts that he has done so that you are more educated on how your finances will affect your life.

“…since fiscal year 2004-2005 the mean total cost of physical therapist education programs has increased nearly 100% at private institutions (mean fiscal year 2014-2015 = $99.797) and approximately 50% for in-state students at public universities (mean in fiscal year 2014-2015 = $55,997).

Lets make a couple of points about this. First, in the previous 10 years, the cost of becoming a professional has increased about 10% per year. This is huge given that the average raise of a PT (using a N of one) is about 3-4%. The cost of education is outpacing the salaries of PTs.

The next huge example though is to take the total cost of public in-state universities compared to private universities. The difference between the two is about $43,000. This sound doable over the course of 20 years, it’s only about an extra $2,150 dollars per year right??? WRONG! You can add an additional 23,000 dollars on top of that difference. The choice between in-state public compared to private school is $66,000 dollars! That would be enough money to pay for in-state school twice! This money would be very helpful when one gets to retirement age. It’s the equivalent of one year salary for a first year graduate.

The point of the matter is that school choice matters, which is also spoken of on the Dave Ramsey podcast. Dave Ramsey college choice

“Eighty-six percent of doctor of physical therapy (DPT students graduating from one state university program in 2005-2007 financed their education with student loans, and more than 13% had student loans of more than $80,000…physical therapist program graduates 1 to 5 years out of school had an average cumulative student loan debt of approximately $96,000.”
Can you hear me now? This number should scar you so much that your drawers have an odor! We are not dumb people. We have to be smart to even get into PT school. Financially, on the whole though we aren’t that bright. Every PT student should know what an amortization calculator is amortization calculator. Interest can either be a reward as an investment or a punishment as a debt.

“Financial experts recommend that cumulative student loan debt not exceed a graduate’s starting annual salary or that monthly student loan payments not exceed 10% of monthly salary…on average, in 2013 physical therapist up to 10 years post graduation did not make more than $80,000.”

Lots in this statement. First, a new graduate demanding more than $80,000 better be able to bring in the business. As a therapist, I have spent 5 years building my brand. My brand travels wherever I go. I had to work hard to create a reputation in the community and based on the blog across the world. As of today’s writing, it has been seen in 37 different countries.

It makes sense that the average therapist is not making more than $80,000 dollars because the average therapist is not going to follow these basic principles: leave the cave, kill something and drag it home. 
 Excerpt taken from: 

Jette DU. Physical Therapist Student Loan Debt. Phys Ther.2016;96(11):1685-1688

Author: Dr. Vince Gutierrez, PT, cert. MDT

After having dedicated 8 years to growing my knowledge regarding the profession of physical therapy, it seems only fitting that I join the social media world in order to spread a little of the knowledge that I have gained over the years. This by no means is meant to act in place of a one-one medical consultation, but only to supplement your baseline knowledge in which to choose a practitioner for your problem. Having completed a Master of Physical Therapy degree, the MDT (Mechanical Diagnosis and Therapy) certification and currently finishing a post-graduate doctorate degree, I have spent the previous 12 years in some sort of post-baccalalaureate study. Hopefully the reader finds the information insightful and uses the information in order to make more informed healthcare decisions. MISSION STATEMENT: My personal mission statement is as follows: As a professional, I will provide a thorough assessment of your clinical presentation and symptoms in order to determine both the provocative and relieving positions and movements. The assessment process and ensuing treatment will be based on current and relevant evidence. Furthermore, I will educate the patients regarding their symptoms and their likelihood of improving with either skilled therapy, an independent exercise program, spontaneous recovery or if the patient should be referred to a separate specialist to possibly provide a more rapid resolution of symptoms. Respecting the patient’s limited resources is important and I will provide an accurate overview of the prognosis within 7 visits, again based on current research. My goal is to empower the patient in order to take charge of both the symptomatic resolution and return to full function with as little dependence on the therapist as possible. Personally, I strive to be an example for family and friends. My goal is to demonstrate that success is not a byproduct of situations, but a series of choices and actions. I will mentor those, in any way possible, that are having difficulty with the choices and actions for success. I will continue to honor my family’s “blue-collar” roots by working to excel at my chosen career and life situations. I choose to be a leader of example, and not words, all the while reducing negativity in my life. I began working towards the professional aspect of the mission statement while still in physical therapy school. By choosing an internship that emphasized patient care and empowering the patient, instead of the internship that was either closest to home or where I knew that I would have the easiest road to graduation, I took the first step towards learning how to utilize the evidence to teach patients how to reduce their symptoms. I continued this process by completing Mechanical Diagnosis and Therapy courses A-D and passing the credentialing exam. I will continue to pursue my clinical education through CEU’s on MDT and my goal is to obtain the status of Diplomat of MDT. Returning back to school for the t-DPT was a major decision for me, as resources (i.e. time and money) are limited. My choice was between saving money for the Dip MDT course (about 15,000 dollars) and continuing on with the Fellowship of American Academy of Orthopedic Manual Physical Therapists (FAAOMPT) (about 5,000 dollars), as these courses are paired through the MDT curriculum or returning to school to work towards a Doctorate of Physical Therapy degree. I initially planned on saving for the Dip MDT and FAAOMPT, but life changes forced me to re-evaluate my situation. The decision then changed to return for the tDPT, as my employer paid for a portion of the DPT program. My goal for applying to and finishing the Dip MDT and FAAOMPT is 10 years. This is how long I anticipate that it will take to finish paying student loans and save for both programs, based on the current rate of payment. I don’t know if I will ever accomplish what I set forth in the mission statement, but I do know that it will be a forever struggle to maintain this standard that I set for myself.

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