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DPT Student Loans: The Past, The Present, and The Future

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I presented DPT Student Loans: The Past, The Present, & the Future to the University of Maryland Baltimore Class of 2017 on June 10, 2016. In my role as an alternate student delegate for the APTA of Maryland, I was interested in the subject matter and presented my research and experience at the House of Delegates (HOD) for 50 mins.

I focused the student on the national scope of student debt in physical therapy, the HOD bill regarding evaluating APTA solution proposals, government implications on previous loan forgiveness for physical therapist students, and current strategies to prepare for life as new graduates. I was able to gain and relay very valuable information to ensure my classmates were best prepared and knowledgeable of the financial literacy resources and loan forgiveness programs available to them. My information was complimented by Tisa L. Silver Canady, Director of the Finance and Wellness Center at University of Maryland Baltimore. Her professional opinion and experience gave increased substance and credibility to financial suggestions and resources presented.

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DPT Student Loans: The Past, The Present, and The Future

  1. 1. DPT STUDENT LOANS: THE PAST, THE PRESENT, AND THE FUTURE Michael Ukoha, SPT Class of 2017 University of Maryland Baltimore Physical Therapy and Rehabilitation Science (PTRS) Contributions from: Tisa L. Silver Canady, MBA Director, Financial Education & Wellness Office of Student Financial Assistance & Education
  2. 2. OBJECTIVES • Recognize the current nature and scope of tuition for doctor of physical therapy (DPT) programs across the nation • Overview of RC 11-16 EVALUATION AND PLAN TO ADDRESS STUDENT DEBT IN PHYSICAL THERAPY introduced by the Oregon State Chapter for the 2016 APTA House of Delegates • Overview of government affair implications for student loan repayment for DPT new graduates • Strategize for the best options for increased financial literacy and success as a new graduate Ukoha 2016 2
  3. 3. NATIONAL PERSPECTIVE • About 42 million borrowers have about $1.3 trillion in student debt (2015), up from roughly $826.5 billion in 2010, which includes federal loans and private loans from the six biggest lenders, according to data from the U.S. Department of Education. • One in four student loan borrowers are either in delinquency or default on their student loans, according the Consumer Financial Protection Bureau. (USA Today, 2016)(Market Watch, 2016) Ukoha 2016 3
  4. 4. METHODS • I went through each APTA accredited program alphabetically in the APTA directory • Observed tuition costs available at each institution online at their respective website ** • Classified each school into a region for analysis: Mid Atlantic, Northeast, Southeast, Midwest, Southwest, West, and North West • Variables: public v private institutions, length of time accredited, rural v urban location, state resources, number institutions per state **Estimated costs via the most recent cost per credit available – Tuition ONLY Ukoha 2016 4
  5. 5. DPT PROGRAM TRENDS OBSERVED • 15% rate of bad links to program websites and tuition focused links • Schools lacking transparency with cost (Referral to bursar’s spreadsheet or registrar information) • Vast discrepancy between in-state v out-state applicants costs • Schools using cost per credit reference for tuition without curriculum credit total available online • Highest Cost: $156,920 • Lowest Cost: $33,000 CAPTE 2014-15 Average Costs (CAPTE, 2016)Ukoha 2016 5
  6. 6. UNDERGRADUATE DEBT TRENDS Based on data from the: National Postsecondary Student Aid Study(NPSAS) (12/14/2015) Ukoha 2016 6
  7. 7. WHAT’S THE GRAND TOTAL? NPSAS 2014-15 Average Student Loan Debt: $35,051 + Maryland: $92,370Ukoha 2016 7
  9. 9. PHYSICAL THERAPY INCOME • Graphs, Charts Physicaltherapysalary.org Ukoha 2016 9
  10. 10. HOW IS MARYLAND ON THE INCOME LADDER? Best State Wages Top Paying Metropolitan Cities http://www.healthcarewages.org/physical-therapist-salary/ Ukoha 2016 10
  11. 11. APTA HOUSE OF DELEGATES Ukoha 2016 11
  12. 12. MANY UNANSWERED QUESTIONS • How might this affect our ability to serve diverse populations? • Are new graduates seeking initial employment positions based upon financial considerations rather than career enhancement and skill development? • How does student debt affect the choice to pursue post-professional PhD education, needed to train physical therapist educators and researchers? • How does student debt affect the choice to pursue clinical specialization? Ukoha 2016 12
  13. 13. WHAT’S THE PLAN? • APTA is seeking to expand upon strategies to improve student loan debt in four main areas: Education 25% Loan Refinancing 25% Scholarship 25% Advocacy 25% Ukoha 2016 13
  14. 14. EDUCATION Possible Action: • American Council of Academic Physical Therapy (ACAPT)- component of the American Physical Therapy Association (APTA), originally created as a subgroup by the APTA board of directors in August 2010, then renamed ACAPT, during the 2013 House of Delegates • “ The Council intends to take a leadership role in establishing the direction of physical therapist education and have the responsibility and accountability to duly reflect the interests and needs of the academic and clinical physical therapist educational community ” • ACAPT or another similar organization could provide financial literacy and money management skills to prospective and current physical therapy students and new professionals to aid in decision making around student loan debt. • What does University of Maryland-Baltimore Offer? For More Information on ACAPT : Ukoha 2016 14
  15. 15. LOAN REFINANCING Possible action: • APTA could partner with a lending organization to offer an attractive new member benefit to new professionals with student loan debt who maintain membership in our organization. • American Dental Association (ADA) comparison Ukoha 2016 15
  16. 16. SCHOLARSHIP Possible action: • The Foundation for Physical Therapy or another similar organization could establish an endowment funded by individuals and groups to support scholarships and loan forgiveness for well-qualified physical therapy students and new professionals. Although this is not within the current mission of the Foundation, initial communication with the Foundation on this indicates it is wiling to consider this. Ukoha 2016 16
  17. 17. ADVOCACY • American Medical Association (AMSA) has developed strategic alliances with multiple organizations: • National Student Nursing Association (NSNA) • American Student Dental Association (ASDA) • American Association of Medical Colleges (AAMC) • To collectively monitor and take action on student loan debt issues impacting their members Possible action: • Our Student Assembly and other new professional and student- focused special interest groups could increase their power to impact state and national student loan debt legislation by intentionally aligning with an increased breadth of allies to significantly increase the number of individuals and voices working in ways that will benefit physical therapy. Ukoha 2016 17
  18. 18. APTA CURRENT STANCE Ukoha 2016 18
  19. 19. RC 11-16 PASSED !! Facebook, Doctor of Physical Therapy Students Group Rachel Jermann, 3rd year SPT from University of Wisconsin Milwaukee June 2018 Ukoha 2016 19
  20. 20. FEDERAL STUDENT LOAN FORGIVENESS OPPORTUNITIES Education Debt Reduction Program (EDRP) • Public Service Loan Forgiveness Program (PSLF) • Student Loan Repayment (SLRP) Ukoha 2016 20
  21. 21. EDUCATION DEBT REDUCTION PROGRAM (EDRP) • This program provides debt reduction reimbursement to an employee with qualifying loans who is in a health care professional position providing direct- patient care services. • The loan must be for the health professional’s education that qualified the applicant for a specific position. Each Veterans Health Administration (VHA) facility determines which positions are hard tor recruitment and retention when the facility will offer EDRP for these positions. • Purpose: provide our Veteran population with specialized care by increasing the supply of qualified health care professionals. Ukoha 2016 21
  22. 22. ELIGIBILITY AND COVERED EXPENSES How to Apply: Applications are submitted through your local VHA facility Contact the EDRP Coordinator or Human Resources Department at your local VHA facility for local criteria application instructions Additional assistance VHA Facility Directory: http://www.va.gov/directory/guide/ home.asp Ukoha 2016 22
  23. 23. PUBLIC SERVICE LOAN FORGIVENESS PROGRAM What are borrower eligibility requirements: - You must not be in default on the loans for which you are requesting forgiveness - you must be employed FULL- TIME by a public service organization - when making each of the required 120 qualifying loan payments - at the time you apply for loan forgiveness - at the time the remaining balance on your eligible loans are forgiven Fact Sheet Updated December 2015 Ukoha 2016 23
  24. 24. SPECIFIC LOAN REPAYMENT REQUIREMENTS • You have made 120 separate monthly payments after Oct 1, 2007, on the Direct Loan you are requesting forgiveness. • Each of the 120 qualifying payments must be made for the full scheduled installment amount and no later than 15 days after the scheduled payment due date. ****The 120 required payment DO NOT need to be made consecutively. • Repayment plan options: • Revised Pay as You Earn Repayment Plan (REPAYE Plan) • Pay As You Earn Repayment Plan (PAYE Plan) • Income-Based Repayment Plan (IBR Plan) • Income-Contingent Repayment Plan (ICR Plan) • 10-Year Standard Repayment Plan For more information on repayment plans: https://studentaid.ed.gov/sa/repay-loans/understand/plans Repayment Estimator: https://studentloans.gov/myDirectLoan/mo bile/repayment/repaymentEstimator.action Ukoha 2016 24
  25. 25. WHAT TYPES OF PUBLIC SERVICE JOBS QUALIFY FOR THE PSLF PROGRAM? • Here are the types of organizations that meet the definition of “public service organization” for the purposes of the PSLF Program: • A government organization ( including federal, state, local, or tribal organization, agency, or entity; a public child or family service agency; or a tribal college or university • A not-for-profit, tax-exempt organization under section 501 ©(3) of the Internal Revenue Code • A private, not-for-profit organization (that is not a labor union or a partisan political organization) that provides one or more of the following public services: • Emergency management • Public service for individuals with disabilities and the elderly • Public Health ( including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioners occupations and health care support occupations) Top 50 Largest Non-Profit Hospitals:Ukoha 2016 25
  26. 26. KEEPING TRACK OF MY ELIGIBILITY What is full-time employment? • You must meet your employer’s definition of full-time. However, for PSLF purposes, that definition must be at least annual average of 30 hours per week. If you are employed in more than one qualifying part-time job at the same time, you may meet the full-time employment requirement if you work a combined average of at least 30 hours per week with your employers. How can I track your progress? • The Dept of Education has created the Employment Certification for Public Service Loan Forgiveness form (Employment Certification form) and a process to help you monitor your progress toward making the 120 qualifying payments necessary to apply for PSLF. • You should complete the form, including your employer’s certification of employment, and submit it to FedLoan Servicing (PHEAA), the PSLF servicer, at the address listed in the Section 6 of the Employment Certification form. For Additional Information on PSLF: https://studentaid.ed.gov/sa/repay-loans/forgiveness- cancellation/public-service Frequently Asked Questions Guide: https://studentaid.ed.gov/sa/sites/default/files/public-service-loan- forgiveness-common-questions.pdf Ukoha 2016 26
  28. 28. STUDENT LOAN REPAYMENT (SLRP) Ukoha 2016 28
  29. 29. GOVERNMENT AFFAIRS PT’s practicing in underserved areas eligible for student loan forgiveness through the National Health Service Corps (HHSC) student loan repayment program. A bipartisan group of representatives sponsored this legislation, titled the Physical Therapist Loan Repayment Eligibility Act (HR 1134). The NHSC student loan repayment program offers awards to clinicians who agree to serve full-time for 2 years at approved sites within designated geographic areas determined to be of greatest need. In return for this service, participants receive money to repay outstanding qualifying educational loans. Program pays up to $50,000. May 2007 Ukoha 2016 29
  30. 30. WHO’S ELIGIBLE? • Initially, only federal employees, US Public Health Service-commissioned corps officers, and civil servants were eligible to participate. • The law since has been amended, however, to open up to participation to additional primary care clinicians: • Primary care physicians • Nurse practitioners • Dentists • Mental and behavioral health professionals • Physician assistants • Dental hygienists • Certified nurse-midwives • Physical therapist? Ukoha 2016 30
  31. 31. WHAT IS THE CURRENT STATUS OF THE BILL? Amends the Public Health Service Act to include physical therapy within the definition of "primary health services" for purposes of provisions concerning the National Health Service Corps. Makes physical therapists eligible for repayment of their educational loans in order to ensure an adequate supply of physical therapists. Amends the Public Health Service Act to: (1) include physical therapy within the definition of "primary health services"; and (2) make physical therapists eligible for the National Health Service Corps Loan Repayment Program (to assure an adequate supply of physical therapists among other health professionals). Ukoha 2016 31
  32. 32. 2015 PT CAPITOL ON THE HILL IMPLICATION • Follow GovTrack Ukoha 2016 32
  33. 33. HISTORY SHOWS.. Ukoha 2016 33
  34. 34. IF THE BILL PASSES, WHAT’S THE EXPECTATION? The Health Resources and Services Administration (HRSA) State Loan Repayment Program (SLRP) provides cost-sharing grants to more than 30 states to operate their own loan repayment programs. These state programs offer loan repayment to primary care providers working Health Professional Shortage Areas (HPSAs) Ukoha 2016 34
  35. 35. WHERE IS AN UNDERSERVED AREA? • PTs can identify Health Professional Shortage Areas (HPSA) in their state in which they wish to practice here: • http://hpsafind.hrsa.gov The most up-to-date federal registry for all 50 states and the District of Columbia is located here: https://datawarehouse.hrsa.gov/DataDownload/FRN/D_BCD_HPSA_H1_FederalRe gister.pdf Ukoha 2016 35
  36. 36. STATE LOAN REPAYMENT CONTACTS All other state contacts can be found here: http://nhsc.hrsa.gov/loanrepayment/stateloanrepaymentprogram/contacts.html Ukoha 2016 36
  37. 37. WHAT DOES THE FUTURE HOLD? • Viewpoints adapted from a LinkedIn Discussion (PT in Motion, Nov 2014) • Kenneth Reese, Certified Financial Planner (CFP) was moderator • “Certainly everyone’s situation is different. Public university, in-state tuition, and not having any undergrad loans all help a lot. Having to borrow living expenses as well as tuition really adds up, and I wish I would have seen what that would do to the loan total before starting PT school. I had a budget, but wish I had taken the time to think far ahead. It would’ve been great to see a chart/graph of how making small interest payments throughout PT school would have lowered total amount borrowed and monthly payment upon graduation.” • “it will take a grassroots campaign to increase literacy of incoming grads” Ukoha 2016 37
  38. 38. VIEWPOINT ON CONSOLIDATION • “As a recent grad who is currently going through the whole consolidation process, what is so confusing is the variety of programs to help reduce the burden of loan repayments that will wipe your debt clean after so many years. I wish someone would produce a cheat sheet with the basic information on each program so it would be easier to see if we might qualify for it and where we can go to get more information. I also think it is wise to have some financial education for students. • The one piece of advice my friend shared with me about student loan debt is always consolidate and push your payments out as many years as you can and then try and pay them off as quickly as you can. By pushing the debt load out as far as you can, if you have a financial hiccup along the way or lose your job unexpectedly you have lower payments during that time and there is no penalty for paying them off quicker when you are financially healthy. Ukoha 2016 38
  39. 39. POTENTIAL SOLUTION RESPONSE • Kenneth Reese, CFP • “I’m curious if everyone would find the following perspective helpful? I’ve been sending this proposal to my congressman. • I want students’ current loans and proposed loans spelled out in the form of monthly required payments, and then I want to have salary scales in another column say $50,000, $75,000, $100,00 and then list the debt burden as a rough percentage of gross income so people can at least get an idea of how large the monthly requirement their debt becomes in reference to their income potential” Ukoha 2016 39
  40. 40. APTA ENDORSES MEDEBTS SOLUTION • ALEXANDRIA, VA, April 7, 2010 — The American Physical Therapy Association (APTA) has endorsed MEDebt Solutions, a comprehensive personal and education finance resource from Education Association Services (EAS) Group LLC. • MEDebt Solutions provides APTA members personalized education and finance information, tools, strategies, counsel, options, and solutions to successful decision-making in managing student loans and consumer debt. • MEDebts Solutions APTA Member Benefit Education Finance Program • http://www.docfoc.com/apta-member- benefit-education-finance-program- administered-by-medebt-solutionseas • Understanding debt, making it affordable, and protecting assets, is a prime requisite for physical therapists and physical therapist assistants, perhaps second only to obtaining a degree," remarked APTA President R. Scott Ward, PT, PhD. • "Many physical therapy students are currently looking at principal loan balances that exceed three to four times their gross income for their first postgraduate job. It was incumbent upon us to help our members fund their educational dreams." Ukoha 2016 40
  41. 41. BUDGET GOALS FOR GRADUATES • MEDebt Solutions • Students Affordability Rules of Thumb Index • Monthly Committed Expenses should be 50% - 70% of total remaining income/financial aid (after all payments due school have been deducted). • Monthly Selected Wants should be 10% - 30% of total remaining income/financial aid (after all payments due school have been deducted). • Savings/Investment Goals should be $500 - 10% of total remaining income/financial aid (after all payments due school have been deducted). Ukoha 2016 41
  42. 42. STUDENT AFFORDABILITY INDEX • Student Loan Payments are considered manageable when kept to no more than 12% of Gross Monthly Income. • Home Debt, rent/mortgage payments, related taxes and insurances, and other related cost should be kept to no more than 32% of total remaining income/financial aid (after all payments due school have been deducted). • Total Debt, home debt, credit card debt, auto loans and any other money owed should not climb above 40% of total remaining income/financial aid (after all payments due school have been deducted). Ukoha 2016 42
  43. 43. GRADUATE AFFORDABILITY INDEX • Each individual can and should decide how they wish to divide up their Monthly Committed Expenses and Monthly Selected Wants. • “the key to financial success, economical security and goal achievement is the long term consistent commitment to saving/investing $500 to 15% - 20% of household income. “ Ukoha 2016 43
  44. 44. CASH FLOW ANALYSIS STUDENT Ukoha 2016 44
  45. 45. CASH FLOW ANALYSIS GRADUATE Ukoha 2016 45
  46. 46. ONLINE RESOURCE PAGE • Federal Student Loan Terms for 2015-16: http://ticas.org/sites/default/files/pub_files/loan_terms_2015-16.pdf • Top 10 Student Loan Tips for Recent Graduates: http://ticas.org/content/posd/top-10-student-loan-tips-recent-graduates • MarketWatch Management Reference: http://www.marketwatch.com/story/how-to-handle-your-student-loans-after- graduation-2016-01-15 • MqrketWatch Consolidation Reference: http://www.marketwatch.com/story/how-and-when-to-consolidate-your- student-loans-2016-01-15 Follow IBRinfo Ukoha 2016 46
  47. 47. ADDITIONAL NONPROFIT PARTNERS • Baltimore CASH • USA Funds Group: Free online financial literacy modules via http://www.umaryland.edu/fin/financial-education-and-wellness/life-skills-financial- education/ • Operation HOPE • Maryland Public TV – Ms. Canady filmed a special with MPT last year about money and how people make financial decisions. She haa a copy of the original film “Thinking Money: The Psychology Behind our Best and Worst Financial Decisions” However, on April 27th the School of Social Work held similar Q&A. • Link Available: https://www.youtube.com/playlist?list=PLPjy1W_DTUEuASiJpzBt5qRwgPAUL5prz Ukoha 2016 47
  48. 48. TUITION REIMBURSEMENT PROGRAMS What’s available? Ukoha 2016 48
  49. 49. CONCLUDING REMARKS: JUST WAIT ON IT.. • Watch for APTA’s action on this issue (Implement action June 2018) • Monitor government action on the Physical Therapist Workforce and Patient Access Act of 2015. • Two things NOT to wait on.. • Researching and applying for loan forgiveness programs with your first employer in mind • Taking control of your finances: Budgeting & Save Early! Ukoha 2016 49
  50. 50. QUESTIONS??? Ukoha 2016 50
  51. 51. REFERENCES • 1. “Consumer Price Index – All Urban Consumers: All items (U.S. City Average)” Series ID: CUUR0000SA0; not seasonally adjusted. Dept. of Labor, Bureau of Labor Statistics, Consumer Price Indexes, http://www.bls.gov/cpi/data.htm;Accessed: 02/24/14. • http://www.studentaidpolicy.com/excessive-debt/Excessive-Debt-at- Graduation.pdf • http://physicaltherapysalary.org/ • http://www.healthcarewages.org/physical-therapist-salary/ • APTA Income Summary: most recently updated 2/14/14 • http://www.usatoday.com/story/news/nation/2016/05/07/one-nation-breaking- down-impact-crippling-college-debt/84014910/ • http://www.marketwatch.com/story/americas-growing-student-loan-debt-crisis- 2016-01-15 Ukoha 2016 51