The average occupational therapy graduate leaves school is upwards of $130,000, though companies like The Student Loan Planner report that many of their OT clients have around $200,000 in outstanding loans.
Unfortunately, there aren't many forgiveness programs designed specifically for occupational therapists. But this does not mean that there aren't any options out there.
In fact, there are at least four approaches for occupational therapists pursuing loan forgiveness. Additionally, there are multiple other repayment options and helpful tips to help you limit what you pay.
This is our ultimate guide to OT student loan repayment.
Occupational therapist student loan forgiveness
OTs looking for some student loan assistance may consider:
Public Service Loan Forgiveness
Income-Driven Repayment
Indian Health Service Loan Repayment Program
Employer Based Forgiveness
1. Public Service Loan Forgiveness
Public Service Loan Forgiveness is available for certain occupational therapists working for certain qualifying employers.
Remember - to be eligible, you'll need to work for either the government or a qualifying non-profit. For occupational therapists, this means that you'll need to work for:
University hospital groups
Your state
Other non-profit organizations
For OTs, PSLF is the best option, as you'll receive forgiveness on 100% of your Federal Direct Loans after making 120 reduced monthly payments. Plus, the forgiveness you'll receive will be tax-free.
2. Income-Driven Repayment
OTs working in the private sector are unlikely to qualify for PSLF, though income-driven repayment may still be beneficial. For the last decade or so, there have been four IDR plans to choose from:
Income-Contingent Repayment
Revised Pay as You Earn
In 2023, though, the federal government announced the new Saving on a Valuable Education (SAVE) plan.
SAVE Plan
The new SAVE plan can sharply reduce payments for OTs by capping payments to just 5% of your monthly discretionary income (defined as the difference between 225% of the poverty line and your income) for your household size and geographic location.
An occupational therapist in Connecticut earning $95,000 a year with $120,000 in student loans at 6% would have a standard repayment monthly payment of $1,332 per month.
But on the SAVE plan, these payments would drop all the way to $259 per month.
3. Indian Health Services Loan Repayment Program
OTs practicing in facilities that serve American Indian and Alaskan Native communities may earn up to $50,000 in student loan forgiveness in exchange for a two-year service commitment.
You'll receive $25,000 each year of your service requirement and be eligible for contract extensions until your qualified student debt has been repaid in full.
Funding for opportunities that arise are based upon the greatest staffing needs in specific health profession disciplines. In addition to OTs, the IHS Loan Repayment Program is open to:
Advanced Practice Nurses
Behavioral Health Providers
Dentists, Dental Assistants, and Dental Hygienists
Optometrists
Pharmacists and Pharmacy Technicians
Physicians and Physician Assistants
Plenty of other providers too
4. Employer Based Forgiveness/Benefits
Though not a formal federal or state forgiveness program, you may find luck in searching for employers offering forgiveness as a company benefit or perk. There is no guarantee that you'll find it in your area, but it is not unprecedented.
Additionally, some employers, like UCHealth out in Fort Collins, CO, offer free student loan consulting as a perk. They mention in their job postings that they help new hires to navigate the PSLF process.
Another option is to search for jobs offering signing bonuses. These bonuses, which are usually provided upon starting your new role, can help you to make some progress quickly.
Limit what you pay
Occupational therapists looking to limit what they owe on their student loans will be happy to learn that they have options outside of these student loan forgiveness programs.
In fact, OTs may pass less by:
Creating a good student loan plan
Set a budget and make extra payments
1. Create a student loan plan
There is nothing like creating a student loan plan to help keep you organized with your ongoing payments, remaining balance, and any shifts in strategy you may need to make.
You may create your student loan plan, if you're sure that your strategy is one that limits your payments and assures that you're not paying a dime more than you need to.
If you want a little help, our friends at Student Loan Planner have you covered. They've consulted on $1 out of every $1,000 of student debt out there, and their approach has been known to save clients up to $50,000 - or more - off their student loans.
2. Set a budget and make extra payments
You'll also want to set a budget to make sure you can avoid your ongoing payments as they come up each month. There are plenty of budgeting apps out there to help you out.
If you've got some extra cash flow in any given month, it can be a good idea to pay down additional principal if you can afford to do so. Over time, you may be able to pay off your loans months, or even years, earlier than you otherwise would have been able to.
Do make sure that any additional principal you're considering paying down won't be money that otherwise would have been paid via any forgiveness program you're participating in.
Occupational therapy scholarships to borrow less money
Many borrowers don't realize the depth of scholarship options available to them. In fact, hundreds, if not thousands, or college scholarships out there go unfilled each year.
You can use this to your advantage.
Some of our favorite resources for future occupational therapists pursuing scholarship opportunities include:
American Occupational Therapy Foundation (AOTF) Scholarships: Qualifying applicants must be enrolled as a full-time student at an AOTA accredited professional level or occupational therapy assistant (OTA) program.
OccupationalTherapy.com: A continuing education site by nature, two OTs per year are selected to receive $5,000 in scholarship funds, so long as they're pursuing a graduate level degree in occupational therapy.
Advanced Travel Therapy Scholarship: OTs may be eligible to earn one of two annual $5,000 awards. The best part? You don't even have to work for Advanced Travel Therapy or be a travel therapist.
There are plenty other scholarships to consider too. It is also worth checking out:
Next, you may consider scholarship programs that don't reserve eligibility to just OT students or graduates. Think sites like:
Further, you may also find other state specific programs. To see what is offered in your state, just use your favorite online search tool.
Conclusion
Though the federal government does not offer any student loan forgiveness programs specifically for occupational therapists to use, OTs around the country still access to a number of helpful programs.
And for those still in school or planning a future career as an OT, there are other scholarship and repayment strategies out there to help make financing your education easier.
Are you a current or future occupational therapist looking for ways to pay for your education? Tell us in the comments below, and we'll be happy to help point you in the right direction.
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