Paying for it

What changed on 1 July 2026

Congress rewrote the federal loan rules in Public Law 119-21, signed on 4 July 2025, and the Department of Education’s final rule took effect on 1 July 2026. For anyone starting a therapy program now:

Grad PLUS

Closed to new borrowers

Students with a federal loan for their current program from before 1 July 2026 can keep borrowing it for up to three more academic years.

Master’s programs

$20,500 a year

Graduate students can borrow up to $20,500 a year in Direct Unsubsidized loans, and $100,000 in all.

Professional programs

$50,000 a year

Up to $200,000 in all. The department’s list includes doctoral clinical psychology; master’s counseling, MFT and social work are not on it. Since a June 2026 court stay, an interim list also covers several other Psy.D. specialties, including counseling and school psychology.

Lifetime limit

$257,500

For most borrowers, counting undergraduate and graduate federal loans together, not counting Parent PLUS.

Repayment

Two plans for new loans

Loans made from 1 July 2026 repay under a Tiered Standard plan or the income-driven Repayment Assistance Plan. Older income-contingent plans close by 1 July 2028.

Two smaller changes matter too. Annual loan amounts now shrink if you study less than full time, and schools may set lower limits for a specific program. Ask your aid office for the figure that applies to you.

How far will federal loans go for you?

Put in your program’s cost of attendance, which every school publishes, and any grants you expect. The gap is what you will need to cover from savings, earnings, family or private loans.

Closing the gap before you borrow

The cheapest dollar is the one you never borrow. Program prices for the same license vary widely, and states do not license graduates of expensive programs any faster. In rough order of how much they usually save:

• Choose a lower-cost accredited program, often a public university in your state. Check accreditation first, on the choosing-a-program step.
• Ask about assistantships and tuition waivers, which are common in funded PhD programs and exist in some master’s programs.
• Use an employer’s tuition benefit, especially if you already work in a hospital, school or agency.
• Look for a paid or stipended placement (below).
• Treat private loans as a last resort. They do not qualify for PSLF or federal income-driven repayment.

Forgiveness and repayment help

Therapists are unusually well placed for loan help, because so many of the jobs are in government, nonprofits and shortage areas. The three main routes:

Public Service Loan Forgiveness

After 120 payments

Full-time work for a government employer or qualifying nonprofit, including associate years at a nonprofit agency. Payments under RAP count; under the new Tiered Standard plan they do not. Check employers with the PSLF Help Tool.

National Health Service Corps

Up to $50,000

For two years full time (or $25,000 half time) at an approved site in a mental health shortage area, tax-free. Requires a full license, so it comes after your associate years.

State programs

Varies by state

Many states run loan repayment programs, often with NHSC funding, for clinicians in shortage areas or public programs. Some include associates.

The NHSC’s 2026 guidance lists five behavioral health disciplines: health service psychologists, licensed clinical social workers, licensed professional counselors, marriage and family therapists and psychiatric nurse specialists. Its education rules track accreditation: an APA-accredited doctorate for psychologists, a CSWE-accredited degree for social workers, and a COAMFTE-accredited degree for MFTs. HRSA also runs separate loan repayment programs for substance use disorder work and rural communities, with their own rules.

Getting paid during training

Most master’s practicum placements are unpaid, but not all, and the exceptions are worth chasing:

• Psychology internships through the APPIC match usually pay a stipend, as do most postdoctoral positions.
• HRSA’s Behavioral Health Workforce Education and Training program funds stipends for students at participating schools, often for work with children, adolescents and young adults. Ask whether your program has a grant.
• Child welfare stipends (often called Title IV-E) pay many MSW students in exchange for working in public child welfare after graduating. Availability varies by state and school.
• The VA trains psychology, social work and other mental health students, often with a stipend.
• Paid agency placements exist in some regions, especially where clinics are short-staffed.
• Your current job. CSWE’s 2022 standards let MSW programs count some work at your existing employer as field hours when it is tied to the program’s competencies. Ask whether your program allows it.

After graduation the picture improves: associate positions are paid jobs. In a few states (for MFTs in California, for example), some supervised hours earned before graduation also count toward the license. The practicum step covers finding a site.

Three ways to pay

Myths worth dropping