Student Loan Repayment for PTs, OTs, and SLPs: Run the Numbers.

The focus of Rehab Wealth Project is to reclaim control of your life and time as soon as possible. The first step in this journey is to aggressively eliminate debt. Once you are no longer bleeding interest payments to the federal government, your money can start making you money while you sleep. This wealth building technique can quickly compound to the point of allowing you to reduce your hours or retire early. But none of that is possible while you are in debt.

While some federal repayment programs result in a reduced total cost after 10-30 years, we also need to consider the lost years of lifestyle flexibility and financial autonomy that these programs require.

Public Service Loan Forgiveness (PSLF) is usually the cheapest option, assuming your employer qualifies and you are willing to work full time in the public sector for ten years. Outside of that, paying the loans off aggressively beats every income-driven option once you account for the tax bill on the forgiven balance and the extra years of monthly payments.

When I graduated with $170,000 in loans, nobody handed me a clear breakdown of what each option actually costs. This is what I wish I'd had.

In this guide

• The scenario we're using
• A note for current PT, OT, SLP students
• Option 1: Pay It Off
• Option 2: Public Service Loan Forgiveness (PSLF)
• Option 3: Income-Based Repayment (IBR)
• Repayment Assistance Plan (RAP)
• Going deeper on AGI optimization
• Which path is yours?
• Common questions

The Scenario We're Using

To make sure we are comparing apples to apples, every number below uses the same scenario:

• Student loan balance: $150,000
• Interest rate: 6.5%
• Income: $90,000 AGI (averaging a starting salary around $75k that grows to $110k over 20 years)
• No dependents
• Expenses: Approximately 43k per year, leaving approximately 2k per month, after taxes, to pay off loans or invest. We call this our "comfortable" scenario. Frugality and income stacking can dramatically shift these numbers, as we'll demonstrate below.
• This is feasible in most mid-cost of living areas. High COL areas, like NYC or San Francisco will need a significantly larger budget.

Your numbers will be different. Use the calculator to model your specific situation. This standard scenario simply gives us a level playing field to compare all three paths.

Scenario: $150,000 balance · 6.5% rate · $90,000 average AGI · no dependents.

A Quick Note for Those Currently in PT, OT, or SLP School

Starting school after July 1, 2026? The rules changed. PT, OT, and SLP are classified as graduate programs instead of professional under the new "One Big Beautiful Bill Act" (OBBBA). Federal loans are now capped at $20,500/year with a $100,000 lifetime limit. Grad PLUS loans are no longer offered.

With an average PT school cost between $108,000–$126,000 before living expenses, most new students will need private loans to cover the gap.

The short version: pay private loans off first, don't refinance federal loans if you are considering PSLF, and then choose a strategy from the options below.

Option 1: Pay It Off

Trade: 3-8 years of aggressive payments for total flexibility after.

When paying off loans aggressively, the math is simple: reduce expenses and maximize income.

This is for the person who wants options above all else. Maybe you're planning to go part-time, have kids, open a private practice, or just want the freedom to walk away from a toxic job. You don't want your employer choices locked in for a decade, and you don't want a massive tax bill waiting for you in 20 years.

Comfortable = $90k income, $43k expenses. Frugal = $90k income, $30k expenses. Frugal + PRN/travel = $105k income, $30k expenses. Same $150k balance at 6.5%, refinanced to 5%.

The comfortable scenario refinances from 6.5% to 5% and pays $2,000/month on a 90k salary with 43k annual expenses, clearing the balance in 7.5 years.

Alternatively, if you can live frugally off of 30k expenses annually, you can contribute 3k to the loans, reducing your timeline dramatically from 7.5 years to 4.7 years, and reducing the cost to $168,553.

Combine that frugal 30k annual spend with adding three PRN shifts per month or switching to travel PT and you cut the timeline further with a 4k per month loan payment to 3.4 years. Total cost is reduced to $163,443.

• Pros: Total flexibility. No employer requirements, no multi-decade commitments. Can be super aggressive and knock it out quickly with a couple of years of travel or PRN income stacking. Refinancing lowers your rate and reduces total interest paid. If you decide to be more aggressive, you can dramatically cut this time down to just a few years.
• Cons: More expensive than PSLF if you'd qualify. Refinancing federal loans permanently removes them from any forgiveness program, so be certain before you do it.

Read the full payoff guide

Option 2: Public Service Loan Forgiveness (PSLF)

Trade: 10 years at a qualifying employer for the lowest total cost.

This is for the person willing to commit to a public service setting, such as a hospital system, a school district, a nonprofit clinic. You're not planning to bounce around. You want the absolute lowest total cost of repayment, and you can live with the structure of a 10-year commitment.

Total cost in this scenario: $81,000. On the RAP plan, a $90,000 AGI gives a $675/month payment. Over 10 years that's $81,000 paid, with $144,000 forgiven tax-free.

See how you can cut 30% off your monthly payment and set yourself up for early retirement with the "Going deeper on AGI optimization" section below. This strategy is quite powerful.

• Pros: PSLF offers the lowest total cost by a wide margin if you qualify. Tax-free forgiveness. Payment is based on income, not your balance. You can reduce your AGI and therefore your monthly payment by contributing to a traditional 401(k) or HSA. The AGI optimization guide covers this strategy in detail.
• Cons: You must remain in full-time qualified employment for 10 years. Payment increases as income grows. Smaller towns may have fewer qualifying employers. There are tax-filing implications if your spouse works.
• Critical: Do not refinance federal loans if you're pursuing PSLF. It permanently disqualifies those loans, no exceptions.

Read the full PSLF Guide

Option 3: Income-Based Repayment (IBR)

Trade: 20 years of manageable payments for a higher total cost and a tax bill at the end.

This is for the person in the private sector carrying significant debt relative to their income. If you don't qualify for PSLF and want the safety net of a flexible monthly payment based on your income, IBR might be for you. There is a catch though: when your payment doesn't cover the monthly interest, the unpaid interest piles up over the 20-year term. By the end of this scenario, your forgiven balance has grown from $150,000 to about $212,000, and the forgiven amount is taxable in the year it's discharged.

In this specific scenario, with $150k debt and a $90k average AGI, paying it off comes out about $16,000 cheaper than IBR. The threshold where IBR beats paying it off shifts with both the debt-to-income ratio and the interest rate, so you'll need to run your own numbers.

The IBR math also shifts in your favor if you use AGI optimization, maxing a traditional 401(k) to lower your AGI and your monthly payment and getting that retirement nest egg established, as described below in the "Going deeper on AGI optimization" section below. The mechanics and limits are covered in the IBR deep dive and in AGI Optimization.

Total cost in this scenario: $196,600. On New IBR, a $90,000 AGI gives a $554/month payment. Over 20 years that's $133,050 paid, with about $212,000 forgiven, but the forgiven balance is taxable, an estimated $63,600 tax bill.

• Pros: Keeps payments manageable when income is lower. Works well when your debt is very high relative to income. AGI optimization can meaningfully improve the math.
• Cons: Unpaid interest accrues over the 20-year term, so the forgiven balance and the tax bill grow over time. Annual recertification required. More expensive than PSLF by about $107,000 in this scenario.

Read the full IBR Guide

Repayment Assistance Plan (RAP): 30-Year Forgiveness (Post-2026 Loans)

Trade: 30 years of low monthly payments for the worst total math of any option.

RAP without PSLF is not a viable option after 2026. It is the only income-driven option for new federal loans disbursed after July 1, 2026, thanks to the One Big Beautiful Bill (OBBB). If your loans were taken out after this date and you end up in the private sector, this is what you have. The math makes a strong argument for paying it off aggressively instead.

Total cost in this scenario: $282,600. On RAP, a $90,000 AGI gives a $675/month payment. Over 30 years that's $243,000 paid, leaving $132,000 forgiven and an estimated $39,600 tax bill — about $102,000 more than just paying it off. (RAP's $50/month principal match pays down about $18,000 over the term.)

• If you have post-2026 loans and end up in private practice: the case for paying it off fast is strong. RAP will cost you more in the long run, often significantly.
• If PSLF is an option: RAP counts as a qualifying repayment plan. Use it for PSLF, not for the 30-year forgiveness.

Read the full RAP Guide

The power of AGI optimization

With IBR and PSLF, the goal is to minimize your AGI to reduce your monthly payment. This is accomplished through contributing to your 401k and HSA, which reduces your AGI dollar for dollar.

Let's consider the PSLF example from before, based on a $90,000 AGI and a $675/month payment.

Since your expenses are 43k, lets say you took the remaining $1,325 of your "loan payment budget" and instead invest it into your 401k. Your AGI would drop from $90,000 to $74,100. Dropping your AGI that way cuts the RAP payment from $675 to $432/month, lowering your total PSLF cost by $29,130, from $81,000 to about $51,870.

Monthly payment reduces by $243 per month and your total cost reduces by $29,130. But what happens to that $1,325 that went into your 401k? Let's run the investment calculator!

After 10 years, not only are your loans forgiven, but your retirement fund has an incredible foundation. If you finish PSLF by the time you are 35 years old, you can leave the retirement accounts alone, not contribute another dollar to them, and they will continue to compound until you are retirement age.

I know what you might be asking. "That will be cool in 30 years, but what does this do for me right now?"

Let's say you are 35 years old in the above scenario. Your loans are forgiven and you've simultaneously built a retirement nest egg that will compound to almost 2 million by the age of 65. This means that from this point on, you only need to cover your immediate expenses. You now have the freedom to drop to part time or PRN. You have the freedom to start a business, or take a pay cut for the job you really want, or pivot out of therapy all together if you'd like. You can now focus on your family, and reclaim your time to make more memories with them. Alternatively, you can keep saving aggressively and retire at 50 instead. This gives you options.

AGI optimization is one of many strategies we will discuss along this journey together. Just simply being strategic with how you spend your money, and where you save it, can dramatically alter the trajectory of your life.

Read more about AGI Optimization

These strategies allow us to design the lives we want to live instead of remaining trapped in our 40+ hour work-weeks in an ever-eroding healthcare system. That's what Rehab Wealth Project is all about.

Which Path Is Yours?

• Working full-time at a hospital, nonprofit, or government agency long-term: PSLF. Ten years tied to a qualifying employer for the lowest total cost. Minimize AGI through 401(k) contributions to keep the payment low and build wealth pre-tax.
• Private sector, pre-2026 loans, very high debt relative to income: IBR. Twenty years of low payments and a tax bill at the end. Beats aggressive payoff only at high enough debt-to-income; run the numbers. AGI optimization improves the math.
• Private sector, post-2026 loans: Pay It Off. Seven to eight years of aggressive payments. RAP is the only IDR alternative and costs $102,000 more in this scenario. Maximize income (travel, PRN) to shorten the sprint.
• Flexibility is non-negotiable, going part-time, having kids, switching settings: Pay It Off. Three to eleven years, depending on how aggressive you are, for total flexibility after.
• Not sure yet: IBR. Keeps options open while your career stabilizes. You can pay more than the minimum or pivot to aggressive payoff later.

No matter which path you choose, you should take a moment and thank yourself for being deliberate about selecting a viable loan payoff strategy. Your future self (and family) will be living a more balanced, intentional, designed life, because of your choices today.

If you'd like to learn more strategies to pay off debt, build wealth, and escape the clinical grind, join our newsletter! No courses, coaching, or ads. Just financial content for rehab professionals delivered to your inbox.

Disclaimer

I'm a PT, not a financial advisor. This is not financial advice. Student loan decisions are personal and complicated. Please consult a qualified professional before making major moves.

This is Phase 1, Step 6 of Get to Zero: pay off your student loans.

Once they're handled → Phase 2: Build the Runway.

Common Questions

How should a physical therapist choose a student loan repayment strategy?

It comes down to where you work and how long you'll stay. If you work full time for a qualifying public-service employer for 10 years, Public Service Loan Forgiveness (PSLF) is usually cheapest. If not, paying the loans off aggressively beats every income-driven option once you account for the tax bill on forgiveness and the extra years of payments. IBR only wins at a high debt-to-income ratio.

What is the cheapest way for a PT, OT, or SLP to repay student loans?

For the standard $150,000 scenario, PSLF costs about $81,000 with tax-free forgiveness if you qualify. If you don't, refinancing and paying off costs about $180,227. Both beat IBR (about $196,600) and RAP (about $282,600), which carry tax bills on the forgiven balance.

Is PSLF or paying off your loans better for therapists?

PSLF wins on total cost if you work full time for a government or 501(c)(3) nonprofit employer for 10 years, and the forgiveness is tax-free. If you want flexibility to go part-time, switch settings, or open a practice, paying it off aggressively, often 3 to 8 years, is usually better despite the higher cost.

How much more does RAP cost than paying off loans?

On a $150,000 balance, the Repayment Assistance Plan (RAP) held to its 30-year forgiveness costs about $282,600, roughly $102,000 more than refinancing and paying it off. After 2026, RAP is the only income-driven option for new federal loans, which makes aggressive payoff the stronger play for most therapists who don't qualify for PSLF.

Do the 2026 student loan changes affect PT, OT, and SLP students?

Yes. Under the One Big Beautiful Bill Act (OBBB), loans disbursed after July 1, 2026 cap federal graduate borrowing at $20,500 per year and $100,000 lifetime, and Grad PLUS loans end. With PT school often costing $108,000 to $126,000, most new students will need private loans to cover the gap.