When more earns you less

In 1993 the requirement for physical therapists started transitioning from a masters to a doctorate degree. One of the main reasons for transitioning from a Masters to a Doctorate degree was to position physical therapists as a primary care provider for musculoskeletal or neuromuscular pathology. Physical therapists wanted their level of training to be congruent with their licensure, which has been accomplished. Although by trying to fix the problem of physical therapists not having their licensure on par with their training, another problem was created. The problem when more time spent on education earns you less and has serious financial implications.

What is the issue?

The cost of becoming a physical therapist is holding back our profession by financially handcuffing new graduates with massive amounts of student loans. Recently the physical therapy profession has transitioned from a Master’s degree to an entry level Doctorate degree, and as a result student loans have drastically increased. According to Joseph Reinke, CEO and Founder of FitBUX, a company that has developed new technology which allows you to make better informed and personalized financial decisions, DPT students graduate with an average loan of $135k. “FitBUX has estimated that each cohort graduates with approximately $1 billion in student loan debt and the last three cohorts graduated with an estimated combined amount of debt between $2.5 billion and $3 billion.”

PT salaries are so largely dependent upon insurance reimbursement rates. This dependency has become increasingly problematic as reimbursement rates have significantly declined over the last decade. The residual effects of these declining rates directly and negatively impacts the salaries of physical therapists nation-wide. To supplement falling salaries in the profession, the changes to the educational requirements, mentioned above, are leaving newly licensed PTs with crippling debt and deterring potentially interested undergraduates from even considering the career path. Physical Therapy students will graduate with exponential amounts of debt each year and continue to make less money.

Surprisingly, this issue is not being recognized by educational institutions. Universities are placing blame elsewhere. In addition to the conversion from a masters to a doctorate degree requirement to practice and the additional year of education required for the degree, the annual cost of DPT programs have drastically increased over the last decade. While this change of degrees should have acted as a great leap forward in advancing the field through a more rigorous academic standard, the reality for new graduates has proved to be the same level of skill and technical ability with a more cumbersome financial burden.

Financial impact of the extra year of graduate school for DPT students:

Students are not paid for the extra year of schooling which mainly consists of clinical rotations. On average, students and recent graduates take out an additional $30k in loans to cover tuition and other expenses. Assuming a loan amount of 30k, a rate of 6.3% and a ten-year term (currently, this is the standard rate and term for Federal Direct Plus Loans) equates to monthly payments of $337.60 per month or a cumulative amount of $40,512.

Is there anything else contributing to the problem?

  • On average, students have to wait three months before working post-graduation (i.e. take the NPTE and work).  The average loan amount as previously stated for PTs is $135k.  At a blended rate of 6% the amount of interest they defer for three months is $2,025. Payments over ten years would be $22.48 per month or $2,698 total.
  • Many graduates turn to an average of $1,000 per month of credit card debt to cover the time period between graduation and fill-time employment. This amount repaid over three years at 20% equates to $1,338.
  • Transitioning from a masters to a doctorate degree then having to wait 3 months to pass the licensure exam and start working results in, on average, a total Explicit cost = $44,548 ($40,512 + $1,338 + $2,698 = $44,548)

(Note: Average amount of debt for the extra year of schooling, average time to begin working post-graduation, the blended rate, and average credit card debt was provided by FitBUX)

What If There Was No Third Year and Students Did not have to wait to take the NTPE?

  • Replace the 3rdyear of clinical rotations with work. Assuming a salary of $70k and the DPT saves 20% that would be $1,166 per month in savings. Investing that amount until retirement equates to $77,294.
  • Students can begin making payments on their loans because the DPT can work instead of having to wait three months post-graduation (This is the average amount of time it takes a new grade to pass the NPTE and start working). Investing the $22.48 for 34 years equates to $11,561.
  • Working for those three months will allow the DPT to save $1,166 per month (see number one above).  Investing that amount until retirement equates to $18,922
  • Because the graduate is working they don’t have to accrue credit card debt in the 3 months it takes them to pass the NPTE and start working. Investing the $37.16 per month until retirement equates to $6,763.
  • When we add these factors together, it comes out to a difference of $114, 540 ($77,294 + $11,561 + $18,922 + $6,763 = $114,540)

(Note: Assumption that the average PT graduates at 26 and retires at 60.  Rate of return on investment assumed to be 5.0%)

Is the 3rd year of DPT school necessary?

There is a new collaborative model that has been implemented at South College and is powered by Evidence In Motion (EIM) Learning Academy. The model consists of condensing the standard 3 year DPT curriculum into 2 years and offering an optional residency program in what would be the standard 3rd year of school. By eliminating the 3rd year of school it helps decrease the financial burden on the students and if the students feel they would like additional training they can get paid to do so by attending a residency program. In fact South College is not the first academic institute to offer a 2 year DPT program, Bond University in Australia offers a 2 year Doctor of Physiotherapy degree.

Can we structure the DPT educational curriculum differently?

Will Boyd DPT, host of The Knowbodies podcast and the Breaking Student Debt podcast and had this to say on the topic:

“In terms of the current model of DPT programs being 3 years long, I am not opposed to the length of programs, but I would highly recommend change to the current structure. Rather than 3 years of a continual mix of coursework and clinical rotations, I believe the 3rd year, if we continue with the 3 year model, should be a paid residency position in a setting of the student choosing. Also, with the current state of the insurance based model, it does a disservice to our current students that we are not teaching them the basics of direct marketing and leveraging cash-based wellness programs. We will need these tools to set ourselves up for long-term financial success, particularly in the outpatient setting. Should money matter? Yes, it should. When we place the burden of a home mortgage in the form of $150,000 in student loans onto our current students, it is our obligation to set them up for success. If we continue with 3 year DPT model, I would strongly encourage that we create structure that reduces the financial burden on our future students and set them up for financial responsibility.”

I recently spoke with Dr. Ben Fung, COO of UpDoc Media on this topic and we compared the United States and Taiwanese educational systems. In Taiwan, medical school starts as an undergraduate degree which helps minimize the time spent in school. Medical school in the United States requires a minimum of a 4 year undergraduate degree. This model would significantly decrease student loans across the United States. Maybe there could be a way to blend the important undergraduate classes with graduate classes. This would remove the redundancy of repeating some material anyway such as basic anatomy and physiology.

What is a potential downside to shortening DPT education?

When discussing the topic with Doug Kechijian of Resilient Performance Physical Therapy he brought up a good point that by decreasing the amount of time spent in school that DPT students could potentially lose respect from other doctorial professions, such as Medical Doctors. Physical Therapists are fighting to broaden their scope of practice and want to be thought of as primary care providers. It could be counterintuitive to shorten the amount of time spent educating students. Although this is just one potential downside and does not necessarily mean it is not worth taking into consideration. The money saved by decreasing the time spent in school could partially go towards advocacy to help the profession on the legislative side.

If physical therapists want to be a driving force to help improve the United States healthcare system this is an issue that needs to be discussed and the options explored. Are we going to sit here, complain and pass the problem along to future generations or are we going to come together and figure out a solution?

“The Pessimist complains about the wind;

The optimist expects it to change;

The realists adjusts the sails”

— William A. Ward

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