Prospective counselors, like many students, are navigating their way through the student loan crisis. According to the Board of Governors of the Federal Reserve System
, student debt rose to $1.6 trillion in 2019.
A 2014 study from the American Psychology Association
reported that Ph.D. students who graduated from health service programs carried a median of $75,000 in student debt, while graduates with doctorates in psychology owed an average of $200,000 in loans.
Unlike other professions, counselors both qualify for loan forgiveness and work in a field that offers ample employment opportunities. The Bureau of Labor Statistics (BLS) projects the field of mental health counseling to see an exciting 22% employment growth rate
between 2018-2028, much higher than the average for all occupations. Mental health counselors can work in a variety of settings, including hospitals and clinics.
Counselor pay varies depending on the job, location, and educational levels. Counselors who hold bachelor’s degrees often make less than those who also hold master’s degrees, which take about two years to complete. According to the BLS, the top industries employing substance abuse, behavioral disorder, and mental health counselors paid between $39,690-$52,720
Explore this guide to learn more about the options counselors can take advantage of to pay off their student loans, including loan forgiveness programs for counselors and details on the industries with the highest paying employment prospects.
Loan Forgiveness Programs for Students
Today’s college student typically leaves school with a degree and sizable loan debt. However, because they work in a public service industry, counselors can take advantage of the many state and federal programs that offer loan forgiveness.
Student loan forgiveness programs are designed to help students in a variety of public service industries, including counseling. Guidelines vary depending on the program, with most requiring a time commitment. Below you can find more information about student loan forgiveness resources for counseling students and other public service employees.
Public Service Loan Forgiveness Program
Qualifying applicants who take part in the Public Service Loan Forgiveness Program, part of the College Cost Reduction and Access Act that went into effect in 2007, can potentially eliminate the interest and principal balance on their student loans. Eligible participants must have worked as mental health or school counselors for at least 10 years in the nonprofit sector or for government agencies. AmeriCorps and Peace Corps volunteers can also apply.
Applicants must hold public service jobs while they have made 120 consecutive monthly payments on a Direct Stafford, Direct PLUS, or Direct Consolidation Loan. Borrowers in default on their loans cannot apply. This program accepts individuals working in the fields of public health, public education, emergency management, social work, law enforcement, and public library sciences.
National Health Service Corps Loan Repayment Program
Through the National Health Service Corps (NHSC) Loan Repayment Program, clinicians receive help with their student debt by agreeing to work in underserved areas. Licensed primary care clinicians must commit to work full time in communities with healthcare shortages for up to two years.
Qualified applicants include United States citizens who work in fields serving Medicare, Medicaid, or the State Children’s Health Insurance Program recipients. The program accepts health service psychologists, licensed clinical social workers, marriage and family therapists, and licensed professional counselors. Professionals working in medical and dental services can also apply.
Applications, which require gathering supplemental materials such as loan account statements, take about three weeks to complete. In order to be eligible, candidates cannot be in default of their loans.
Income-Based Repayment Plan
When the Health and Education Reconciliation Act passed in 2010, it made monthly student loan payments more affordable. Individuals set their monthly payments based on their income and family size. Borrowers can choose from the Revised Pay As You Earn Repayment Plan, Pay As You Earn Repayment Plan, Income-based Repayment Plan, or Income-Contingent Repayment Plan.
The Income-Based Repayment Plan allows borrowers to make monthly payments no more than 10%-15% of their discretionary income, meaning the money left after taxes and living expenses. Individuals who consistently pay on time might be eligible for loan forgiveness after 20 years.
Applicants qualify if they have Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, Subsidized Federal Stafford Loan, and Unsubsidized Federal Stafford Loans.
The Health Resources and Services Administration’s State Loan Repayment Program provides grant funding to states that operate loan repayment programs. Primary care providers who make a commitment to work for at least two years full time in communities of need can receive financial assistance through this program. Eligible occupations include licensed professional counselors and substance abuse, behavioral disorder, and mental health counselors.
Specific application guidelines and loan assistance amounts vary in each state. In California, mental and behavioral health providers can apply for the California State Loan Repayment Program if they hold a valid license and agree to a service obligation of two to four years, depending on if they work full or part time.
Licensed professional counselors and alcohol and substance abuse counselors in Hawaii receive incentives to work in areas of need such as community health centers, homeless shelters, or public housing programs. The Hawaii State Loan Repayment Program offers student loan relief for counselors who have completed a graduate program and hold a license.
Highest Paying Areas for Counselors in the U.S.
Salaries for counselors vary across the country. More populous states and metropolitan areas often provide higher wages to counselors, salaries aligned with the higher cost of living in those areas and the increased demand for counselors resulting from a larger population.
The top-paying states for substance abuse, behavioral disorder, and mental health counselors include Utah, Nevada, Oregon, Alaska, and New Jersey
, according to the BLS. The BLS reports that Utah counselors make an annual mean wage of $67,410, compared to $60,120 in New Jersey.
Salaries for counselors also differ between metropolitan and rural areas. The highest paid metropolitan-based mental health counselors live and work in Lewiston, Idaho
, where they earn an annual mean salary of $81,600. In Salt Lake City, mental health counselors earn $76,710. The highest-paying nonmetropolitan areas are eastern Utah and central Utah, which pay counselors annual mean wages of $78,400 and $68,640 respectively.
A counselor’s earnings also depend on their specific occupation. The BLS reports that school and career counselors
earned a 2019 median annual salary of $57,040. Substance abuse, behavioral disorder, and mental health counselors
earn a median annual wage of $46,240, and counselors in all other fields
take home an annual mean wage of $47,740. Additional factors such as education and experience also influence what counselors earn.