Occupational Therapy Degree and Student Loans

By Joseph Reinke, CFA, CEO of FitBUX

There have been many discussions about occupational therapy degree requirements and the ramifications of the OTD Mandate. One of the primary concerns discussed is the affect the OTD Mandate will have on student loans and future levels of student debt.

This article addresses the impact changing the occupational therapy degree requirements has on student loans and contains early observations from the expansion of FitBUX into the OT industry.  These early observations serve the purpose of providing current and future discussion points as the industry progresses towards the implementation of the OTD Mandate.

Note: For those that aren't aware, in summary, the OTD Mandate is the requirement that occupational therapy masters programs no longer be offered. Instead, future occupational therapist will be required to receive a Doctorate of Occupational Therapy.

Will The Change In Occupational Therapy Degree Requirements Cause A Student Loan Problem?

Much has been discussed about the effect the change in occupational therapy degree requirements will have on student loans.  In particular, how it will increase the total amount of student loans those receiving a Doctorate in Occupational Therapy will have to manage once they graduate.

Before we discuss the “problem” we first have to define what it is.  The obvious problem is how much debt those receiving an Occupational Therapy Degree will have relative to entry-level incomes of Occupational Therapist.  This is extremely hard to gauge because of the variables involved.

However, there is an easier problem we can define because there is already evidence to evaluate it.  The problem: What is the psychological impact of an increase in student loan debt? We’ve seen that this psychological effect already exists with those attending Occupational Therapy Masters Programs.

We recently conducted a survey in the Occupational Therapy New Grads and Students Facebook Group to gather additional data. In that survey, we asked new grads from various Occupational Therapy Master Programs, “Do you feel like you are burning out because you are financially strapped due to student loans?”

Yes….This is a huge factor: 79%
Yes, but it only moderately affects me: 20%
No, not at all: 1%

To make this relative, we asked our current FitBUX Members that have their Doctorate in Physical Therapy (DPT) a similar question.  The question was, “When you chose your first job after graduation, did student loans and the amount of debt you have play a role in which job you accepted?”

Yes: 63%
No: 37%

In short, the student loan problem of obtaining an Occupational Therapy degree should not be discussed in the context of shifting requirements to a Doctorate of Occupational Therapy.  Instead, the discussion should not center on what the problem might be...the problem is already here.  Therefore, any change in requirements should address the current problem and how any changes will help address that problem versus keeping the status quo.

Increasing Burn Out and Negative Feelings Toward Occupational Therapy

One way to study the effect of student loans is comparing it to related industries.

Rachel Jermann, a recent DPT grad and Founder of Talus Media, has completed polls of DPTs asking if student loans have led to an increase level of burnout and the results very clearly indicate there is a strong correlation.

As mentioned above, we’ve seen an increasing burn out rate among recent DPT graduates. In fact, this was recently brought to a motion in the APTA House of Delegates. Day in and day out we speak to new grads at FitBUX and hear how getting their DPT was a major mistake…we already see it in OTs as well.

Here is one comment from the survey we conducted in the Occupational Therapy Student and New Grads Facebook Group:

“Student loans have been the primary cause of my anxiety for the past several weeks! I’m in the middle of my level 2 FW and I’m truly starting to regret going to OT school as much as I love it. My husband and I only have 1 car and I feel like we won’t be able to buy a house or get a second car. We have already decided not to have kids due to the life long debt we’re in and from what other OT’s tell me, it doesn’t seem to be a promising career like its lead on to be. I’ve already recommended to 4 people who were considering OT not to do it. It’s becoming one of the biggest regrets of my life.

We are seeing many new grads take a job simply because it pays more and they need to repay student debt.  This leads to burn out because you can’t simply work day in and day out for money purposes.  Similar to PTs, almost all OTs we’ve meet go to school because they want to help people and although money is important, they simply want to live comfortably because we all know rehab therapist are not going to make $1,000,000 per year in salary.

Confusion And Lack Of Help Add To Burnout

When a student completes their schooling and receives an Occupational Therapy Degree, they must choose among nine different Federal Student Loan repayment options. In addition, these new grads have to try to figure out how the different student loan repayment options play a role in their overall life such as retirement, saving for a house, family planning, marriage, etc…

Currently, there are few places for new grads and students to turn to for help. Financial advisors deal primarily with asset management and insurance and have very little to no experience with debt.  Loan servicers work for the lender so their interest is misaligned with the borrower. Student loan refinance companies simply want you to refinance as much as you can regardless of ramifications.  FitBUX is currently the only company that addresses this problem (Full disclosure: I am the founder of FitBUX. However, this problem is the primary reason why we started the company!).

In addition, the average student loan leverage ratio for Member’s on FitBUX’s platform is 2:1. For instance, this means $140,000 in credit card/personal loan debt relative to an income of $70,000.

The issue here is New Grads feel overwhelmed by both the dollar amount of debt they are facing as well as not having the peace of mind of knowing they have a sound plan to repay it, save for the future, and live their life.

Guilty By Association

The stress student debt and confusion over repayment adds to their lives makes them upset and leads to burn out.  Since these emotions are caused by the student loan debt, they immediately point to the root of their problem being that they went to school.  Therefore, they associate the stress with being an Occupational Therapist because for many, student loans were the only option they had to go to school or those that provided them guidance in high school told them university education is most important regardless of cost.

This is a shame because most actually love the work they do but end up hating the profession because of their feelings towards student loans…in short, the industry is guilty by association…

Two Recommended Areas For OT ProgramsTo Focus On

We are often asked for the “magic bullet” solution to the student loan problem. Unfortunately, there is none. However I highly recommend those in decision making roles to focus on the following areas because these are two areas that we control:

  • Focus on financial education early and often in OT programs. This will help give students and new grads a sound financial plan which reduces stress and burn out.  The goal of this education should focus on planning not on minute details such as the difference between subsidized and unsubsidized loans.  It should also provide an easy way for students and new grads to implement their plan. Peace of mind goes a long way to reduce stress.  For proof of this, check out some of the reviews FitBUX has received from our Members.
  • Focus on field work. We see many DPTs able to keep their student loan burdens to a manageable level. However, they do their clinicals and this adds another $20k - $50k to how much they owe.  Stressing that OT programs have options close by so students don’t have to move is essential. Also, stressing to students that should they leave the area for their field work they go to a place where they have family or friends they can stay with to help reduce the cost.  This would go a long way to reducing the overall amount of debt accumulated.

About FitOT

FitOT is the FitBUX Community dedicated to everything Occupational Therapy.  It is designed to be a resouce for FitBUX Members and Members of the Occupational Therapy Community.  If you would like to write an article for FitOT you can do so by clicking here.


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