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Do Psychologists Earn More than a Masters Degree in Private Practice?



Do Psychologists Earn More than a Masters Degree in Private Practice?

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Many of you ask me if it’s worth it to get a doctorate degree if you want to be a therapist in private practice. I can almost feel the underlying assumption: “hey there, DOCTOR Marie Fang, you must think all of that extra work and money must have been totally worth it, right?

My thoughts may not be quite what you expect. Hang tight – in this video I break down the real story of who earns the most in private practice.

This video is geared for therapists of all kinds, including psychologists, MFTs, LPCCs, social workers, and others in the clinical counseling field.

Welcome to Private Practice Skills! I’m Dr. Marie Fang, psychologist in private practice. I post videos offering tools I learned the hard way about starting and growing private practice so that you don’t have to.

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This video is not intended as professional or legal advice. Be sure to seek the services of a professional if you are in need of them.

Because psychologists tend to charge more than masters-level therapists in private practice, we might interpret that psychologists earn more than licensed masters-level therapists in private practice, right?

Not so fast. There are two issues with this assumption.

First, you have to account for the discrepancy in tuition costs of a doctorate degree vs a masters degree. Let’s break down the average costs of each:

In the state of California, most MFT degrees cost somewhere between $55,000 and $70,000 in total (just as long as you’re not at USC! Goodness).

The average PsyD in clinical psychology in my state costs anywhere from $120,000 to upwards of $250,000 total, depending on how long you take to complete your program. (which keep in mind, tends to vary much more for doctorates than masters degrees because of the dissertation).

So conservatively, doctorate-level therapists can expect to pay at least twice as much as masters-level therapists on tuition, if not four times as much. Yikes!

Furthermore, the average time between starting grad school and getting licensed is wildly different between doctorate and masters level therapists. So we also need to account for the delayed income for the average psychologist as well.

And let’s not forget to account for interest rates on those darn student loans! With an average student loan interest rate of 5.8%, a student loan of $70,000 for a masters degree would cost about $50,000 in interest on a 20 year loan. While a student loan of $200,000 would cost $140,000 in interest on a 20 year loan – that’s just about enough to pay tuition for a second doctorate degree! Adjust the repayment plan for that doctorate degree to 30 years and you’re really screwed.

After doing this math you can see that across a lifetime, a psychologist may not necessarily earn more than a masters level therapist in private practice. And they certainly would need to charge far more per hour just to earn the same amount.

I mentioned that there are two issues with the assumption that psychologists earn more than masters-level therapists. And even though I think the first point I just mentioned is valid on its own, the second issue makes the first point moot:

There is no “rule” for how much therapists of different credentials are allowed to charge in private practice.

Yep, so you can literally charge whatever you want per session, as long as there are clients willing to pay you at that rate.

So if your end-game is to maximize how much you can earn in private practice, your degree doesn’t have much to do with it. Or if anything, it’s easiest to make an argument that the lower tuition, faster licensure, and smaller total interest owed on student loans makes it easiest to earn more at the masters level.

The decision to pursue a doctorate vs a masters-level degree is yours to determine for yourself. But, I really discourage you from making the decision to go for a doctorate solely because you see psychologists charging more in private practice. It doesn’t necessarily mean they earn more overall!

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Some Toughts (33)

  1. Avatar
    added on 7 Feb, 2020
    Reply

    Amazing video as ALWAYS!!!

  2. Avatar
    added on 7 Feb, 2020
    Reply

    I think where the earning potential of the doctorate in private practice becomes starkly different is in performing forensic and similar examinations. That $1,000 bill for a life coach would be a normal amount for many exams someone with a doctorate could charge for.

  3. Avatar
    added on 7 Feb, 2020
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    "Give me my second doctorate" 😂 love your honesty! I think this video needs to be mandatory for all graduating psych majors.

  4. Avatar
    added on 7 Feb, 2020
    Reply

    You are soo cute love you always thanks for the lovely video😇

  5. Avatar
    added on 7 Feb, 2020
    Reply

    Great video Dr. Fang, I’m currently a nurse practitioner who is considering a career change into therapy/counseling and trying to decipher what that would look like for my family. From a medicine standpoint, my training and experience will never come close to that of a physician and we are compensated differently for that reason. From the layman’s view, a PsyD seems like a more robust training modality than that of a master’s level clinician but I have no experience in this. I’m not interested in rocking the boat, I’m just curious of your thoughts on that subject and how it relates to clinical practice. Thanks for the content as always!

  6. Avatar
    added on 7 Feb, 2020
    Reply

    There are many people out there who seek out doctorate-level therapists for their advanced training and expertise. That does help get people in the door at times. There is a lot to be said for those who are pursuing and have pursued and have obtained a doctorate degree!

  7. Avatar
    added on 7 Feb, 2020
    Reply

    I’m doing a masters program for my LMFT and plan to dual license as an LPC as well. The program is 3.5 years minimum due to the year intern requirement. I am satisfied with the program and plan to increase my rate as I become a seasoned therapist. Love your videos by the way!

  8. Avatar
    added on 9 Feb, 2020
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    I'm so glad you made this video because a lot of people may have misconceptions. I originally went for a master's degree because I wasn't sure if I really want to commit a total 4-5 yrs for a doctorate. Besides, I can always go back to school to complete a doctorate after getting my master's degree. However, I decided not to because I don't want additional student loans given that I'm doing nearly the same thing a psychologist does (at least where I work at now). I think it also comes down to what kind of work experience you are getting in your career when it comes to being a therapist regardless of your degree unless you want to do psychological testing or become a neuropsychologist – and correct me if I'm wrong on this. Gosh, the cost of tuition is getting absurd! I wish grad school isn't so expensive.

  9. Avatar
    added on 12 Feb, 2020
    Reply

    My husband has a PhD from a state university. After watching him struggle through the time commitment, dissertation, and EPPP, I decided on working on master's degrees (3) part-time while working, and paying cash for them. I also have the advantage of being able to do some "B level" psychological assessments, because of additional training I have. It's all about how position yourself.

  10. Avatar
    added on 14 Feb, 2020
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    Such useful information Marie. Thank you so much 🙏🏼

  11. Avatar
    added on 31 Mar, 2020
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    I choose clinical and mental health counseling because I like conversing with people in need, but I want my doctorate in a different field, so I have something to fall back on if everything doesn't work out in my counseling degree for some reason.

  12. Avatar
    added on 4 Apr, 2020
    Reply

    What if you have both?
    Do doctors who have both have an advantage when it comes to job market and salary?
    To clarify masters+doctorate vs just doctorate?

  13. Avatar
    added on 12 Apr, 2020
    Reply

    Another great video, Marie! You cannot underscore enough the point about the opportunity cost associated with the loss of full time income between the time a master's level therapist begins practicing and the PhD finally can do the same. Also, the same applies to the interest that will be paid on loans. A good way to consider this decision is by calculating the payback time between the two options. Thanks!!

  14. Avatar
    added on 6 May, 2020
    Reply

    Greater immediate income allows for greater cash flow, qualifying one for better loans that can be used to buy appreciating assets that can be sold to compensate for what one will pay in extra interest, or whatever is taxed once its forgiven.  Also, psychologists can test- and this is the bulk of income. Specialized testing. Becoming a psychologist to do therapy is…well…non-sensical unless you specialize.  Testing is where the money is at.  I routinely make $500 hr. So, even with 350k in debt, it's quickly paid for.  I strongly encourage people to only get into fields if they want to maximize potential in that field.  If therapeutic knowledge is desired, get a Masters and continue to learn for the rest of your life.

  15. Avatar
    added on 13 May, 2020
    Reply

    This video was incredibly helpful. Thank you so much for your content!

  16. Avatar
    added on 14 May, 2020
    Reply

    I am currently applying to a masters program in clinical mental health counseling but my goal is a PhD just to be the first in my family to go all the way. My thinking is since I have to work fulltime while going to school, do the before mentioned masters online and switch careers sooner. In addition the hours in that field can be very flexible while working towards a PhD. I am leaning towards a PhD in clinical psychology with a specialization in forensic psychology since I already work in the law enforcement field. hm

  17. Avatar
    added on 17 May, 2020
    Reply

    I am so glad that I found Your channel <3

  18. Avatar
    added on 23 May, 2020
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    So helpful. I’m going for my masters. Thank you 🙏

  19. Avatar
    added on 28 Jun, 2020
    Reply

    Thank you for the great info 😊

  20. Avatar
    added on 28 Jun, 2020
    Reply

    Hi friends! I’m getting a PhD in Clinical Psychology specializing in Neuropsychology in the United States! To my knowledge, all credible Clinical Psychology programs in the US
    are paid and tuition free. So I work as a TA (or RA if there’s grant money), get a paycheck, and don’t have to pay tuition! I do conduct research so if you’re not into that I wouldn’t recommend a PhD, but I’ll start my career with no debt which is helpful! That to me would cancel out the other costs in my early career. Great content! Very helpful and informative 🙂

  21. Avatar
    added on 13 Jul, 2020
    Reply

    Thank you for clarification on fees and psychologists v masters level, that has been a back-and-forth in my mind as I build my private practice. I had begun my journey back to school as an adult with the goal having always wanted to "get a bachelor's in Psychology," once into the program colleagues and professors encouraged me to take it further, and it was there I learned I could practice professionally at the masters level, not needing to get a doctorate to do so, that it was actually the same license I'd be using were I to later decide to get a PsyD. Sometimes I think for my own personal choice it would be enjoyable to get a PsyD, til I peek at my student loan debt than think maybe not that important. I have an MS in Mental Health Counseling from Capella University, chose to go broad not having wanted to only do MFT, and wanting to become an LPCC.

  22. Avatar
    added on 17 Jul, 2020
    Reply

    Loved your video💖. I just graduated with my masters in clinical mental health counseling this past may. I never felt PhD was worth it for many of the reasons you mentioned. Many I met don't make any better & spend tons of years in research or academia.

  23. Avatar
    added on 27 Jul, 2020
    Reply

    So then, if I may ask, why did you decide to get a doctorate? What are the pros?

  24. Avatar
    added on 28 Jul, 2020
    Reply

    Hello! What kind of accreditation should I be looking for in master level programs in mental health counseling? Some programs say they are accredited by the California Board of Behavioral Sciences. Ideally, should these programs be accredited by CACREP? I am looking to be a licensed therapist in the state of California. If you have any answers or information regarding this, I will appreciate it so much!

  25. Avatar
    added on 29 Jul, 2020
    Reply

    Great vid! Currently a rising second year counseling psych PsyD student, and heading into my first practicum! My career goal is becoming a counseling and sport psychologist, so I got my masters of science in Athletic Counseling first to get the sport psychology specialization training under my belt, and now my PsyD degree to get the clinical experience and licensure. Two years masters degree, and PsyD degree done in 3+1 years (masters degree courses knocked off a year of PsyD), so 5+1 years combined. No help with my masters degree with tuition, but luckily my PsyD tuition is about half paid for with my Graduate Associateship position.
    My biggest piece of information about careers/degrees which can be helpful or fellow students is, think about what type of work you want to do/type of population I want to work with. From there, then seeing what degrees and licensure you need to pursue that will help you get there.

  26. Avatar
    added on 2 Aug, 2020
    Reply

    I have a masters, an associates level license, and I’m on faculty of a university. My career has led me into administration – no clinical work and I made +$100k last year. My ego wants to doctorate, but it will likely have no financial benefit to my career.

  27. Avatar
    added on 25 Aug, 2020
    Reply

    Thank you sooo much for this! I can't tell you how grateful I am. I was really unsure about which to pursue master or doctorate because I wanted to make the big $$$, and my ego wants to Doctorate, but I'm not interested in spending 7 years of my life in school and I have a bone to pick with American education system as anyway haha. A master's will give me the flexibility I want. Thanks so much.

  28. Avatar
    added on 26 Aug, 2020
    Reply

    Hi, just as a note, most doctorates do not cost anything to the student, as most doctorate programs offer tuition waivers for full tuition. Not just research grants, almost every single counseling psych PhD has tuition waivers for the students.

  29. Avatar
    added on 27 Aug, 2020
    Reply

    Just got into a masters program. This make me more comfortable with my decision. 😆

  30. Avatar
    added on 2 Sep, 2020
    Reply

    Is there any difference from where or how they work? Also do psychologists with a master’s degree wear a white coat?

  31. Avatar
    added on 3 Sep, 2020
    Reply

    This helped a lot, thank you!

  32. Avatar
    added on 4 Sep, 2020
    Reply

    Can anyone help me out? I’m currently leaning towards getting an MFT or MSW. I ultimately want to go into private practice as a psychotherapist. My biggest regret about getting a masters is that I would not be getting the same thorough clinical training I’d really love to have in order to be the best possible therapist I can be. I’m truly fascinated with the workings of the mind and think I could feel cheated if I went with an MSW because I know there’s not as much of an emphasis on psychology and clinical counseling. Also does anyone know if you get your masters and then later down the line decide to get your doctorate if it’s the same amount of schooling than if you went straight for your PsyD after undergrad?

  33. Avatar
    added on 26 Sep, 2020
    Reply

    Can you do a video on the difference between a LCPC and a LCSW & how the differences play out in private practice. I love your videos !

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