Financial Aid for Psychology and Social Work Studies

With a career in psychology, you can work in many capacities, including counseling patients directly, overseeing community organizations, or researching new theories and methods.

No matter what you want to do, it can take many years—and a significant financial investment—to get the education you need to begin your career. Thankfully, there are plenty of resources available to help you pay for your education, from loans and scholarships to fellowships and grants. Make the most of these options with this guide to what’s available for financial assistance.

Fill Out the FAFSA Form

The first step to getting funding assistance for your education is to fill out the Free Application for Federal Student Aid (FAFSA). Offered by the U.S. government, the FAFSA takes the financial information you provide and determines what, if any, need-based assistance you qualify for. You’ll provide information about your income and expenses—or those of your parents if you’re a dependent student—as well as the cost of the school you’re planning to attend.

The government will use this information to calculate how much you’ll be expected to pay for your education and the amount of any assistance that you’re eligible to receive. You’ll need to submit the FAFSA for every year you want financial aid. The FAFSA site also includes information on scholarships and grants, work-study jobs, as well as helpful checklists and tips for academic and financial planning.

Scholarships, Grants, and Fellowships

Scholarships and grants provide financial assistance you don’t have to pay back, which is why it’s smart to pursue these options first. In general, scholarships are based on merit and awarded for achievements such as good grades, community service, or athletic success. Grants, on the other hand, are usually need-based, so the amount you receive depends on your income and expenses. Some of these awards have a designated use, while others can be used to cover any expense that’s related to attending school. Fellowships are another option for financial aid, though they’re typically targeted at graduate-level students. Most fellowships are research- or teaching-based and give students the chance to take on job responsibilities and gain experience while they study. Financial aid through a fellowship could come in the form of tuition coverage, housing stipends, or living expenses. Some even include additional benefits such as healthcare.

There are countless scholarships, grants, and fellowships with varying award amounts and requirements. Some are open to students of all kinds, while others take into account factors such as gender, ethnicity, or area of specialty (there are a number of social work scholarships, for example). You can find these awards through a wide variety of channels, including educational institutions, professional organizations, private companies, and more. A great place to start is the American Psychological Association (APA), which maintains a massive database of financial resources for current and aspiring psychologists.

Student Loans

If, in addition to securing any nonrepayable funding, you still need help covering the cost of school, taking out student loans will be your next step. Keep in mind that all student loans include interest, meaning that you’ll end up paying more than the initial amount you borrowed. Interest rates can vary wildly depending on the lender and structure of your loan, and the amount you ultimately pay will increase the longer you have the loan.

Federal loans

If you do need to borrow funds, it’s recommended to explore your eligibility for federal loans first. Compared to private student loans, there are several benefits to federal assistance:

  • Interest rates are fixed and are usually much lower than for private loans.
  • You don’t have to pay back federal student loans until after you graduate.
  • Many federal loans don’t require a credit check.
  • After a certain amount of time, you might be able to qualify for options that forgive some or all of your remaining loans.

There are a few different types of loans you can qualify for from the government. All of these have the advantages listed above, but you’ll need to meet different requirements to qualify.

Direct loans

Commonly referred to as Stafford Loans, Direct Loans are aptly named because they come directly from the U.S. government. In 2018, the government stopped one of its Direct Loan programs called the Perkins Loan, which was for students with exceptional financial need. If you have a previous loan from this program, you’ll need to begin repaying it within 9 months after you leave school. There are three types of Direct Loans still available:

These are designed for undergraduate students who demonstrate financial need by meeting certain income requirements. You can borrow up to $12,500 a year depending on what year of school you’re in and your status as a dependent. If you qualify, the government will pay the interest on your loan while you’re in school and for 6 months after you graduate. The interest rate is a fixed 4.99% as of 2022, though this figure changes each year.

Both undergraduate and graduate students who don’t have enough financial need can qualify for a Direct Unsubsidized Loan. Undergraduate students can borrow up to $12,500 a year, while graduate students are able to get up to $20,500. These loans require you to pay the interest that builds while you’re still in school. As of 2022, the interest rate is a fixed 4.99% for undergrads and 6.54% for graduate students.

Intended specifically for students at the graduate level or parents of dependent students, Direct PLUS Loans allow the borrower to cover all costs related to attendance minus any other aid they’ve received. These loans are unsubsidized, so interest that’s accrued during school needs to be repaid. As of 2022, interest rates are 7.54%. Unlike the other loans, PLUS Loans require a credit check to determine eligibility.

Private loans

If you still need funding, many private loans are available through lenders such as banks, credit unions, state agencies, and schools. However, these typically offer fewer options for how to make repayments and many of them require payments to begin while you’re still in school. What’s more, these loans often come with much higher interest rates that could increase over time. Students without excellent credit might be offered loans with rates that could end up costing more than double the amount originally borrowed, so approach these loans with caution.

Federal Loans vs. Private Loans

Federal Loans

Private Loans

  • Payback

Don’t have to be paid back until after you graduate

Many require repayment to begin while in school

  • Interest Rate

Lower interest rates that are fixed for the lifetime of the loan

Higher interest rates that may increase over time

  • Credit Check

Don’t require a credit check (except for the PLUS Loans)

Require good credit or a co-signer

  • Loan Forgiveness

Could qualify for loan forgiveness and repayment options through the federal government

Don’t qualify for loan forgiveness and repayment through the lender, but might be eligible for state programs

Remember that you don’t want to take out more than you’ll be able to pay back later. Consider the goals you have for your career and the salary you could potentially earn. The U.S. Bureau of Labor Statistics offers average salaries for a variety of roles within the field of psychology. You can reference these to get an idea of what you might make and whether it’s financially feasible to commit to a loan’s repayment plan and interest rate.

Student Loan Forgiveness and Repayment Options

Earning your degree in psychology doesn’t come cheap, but there are programs that can help alleviate your debt if you meet specific criteria. As a working psychologist, you might qualify for loan forgiveness at the national or state level. In some cases, you might even be eligible to have all of your remaining debt erased after a certain period of time.

Public Service Loan Forgiveness Program (PSLF):

The PSLF is designed for students who take full-time jobs in government or nonprofit agencies. You’ll need to have made 120 qualifying repayments on a federal loan before you’re eligible.

The National Health Service Corps (NHSC):

The NCHS Loan Repayment Program offers up to $50,000 per person to fully licensed behavioral and mental health providers who work for at least 2 years in an NHSC-approved site.

State Loan Repayment:

Loan repayment is available in some states for graduates who work with an underserved population or in a high needs area. Private loans may or may not qualify for these programs.

Faculty Loan Repayment:

Students who serve as faculty members at an educational institution for at least 2 years can qualify to receive up to $40,000 to apply to their federal loans.

Other loan repayment options

The federal government offers other programs to help students who are having difficulty paying their loans. If you’re having a financial setback, you might qualify for a temporary loan deferment or restructuring. You can also apply to change your repayment plan. Changing your plan can involve lengthening the amount of time you have to pay back your loan or structuring your payments to be based on your income.