It’s Time To Rethink Psych School
(Penn St. Recently announced the closing of its Pysch PDH Program, despite a shortage of mental health practitioners.)
Rising costs and lengthy timelines to licensure are forcing students to rethink conventional psych ed and turn to more modern mental health career tracks.
There’s a seismic shift slowly unfolding in Mental Health. While the U.S. grapples with an alarming rise in mental health issues and an ongoing therapist shortage*, fewer people are pursuing traditional psychology degrees.
Initially, that might seem counterintuitive. You might think that a shortage of therapists would drive up wages and thus create an interest in education. But rising costs and ridiculously long timelines are forcing a decline in graduate program enrollments*. Penn State recently closed its School Psychology Ph.D. program, citing insufficient applications and financial challenges.
This raises an important question: is the traditional psychology education path still worth it?
1. The Rising Costs of Traditional Education
The financial burden of becoming a licensed therapist is staggering. Between undergraduate and graduate degrees, aspiring psychologists face costs ranging from $75,000 to over $200,000. Add the hidden cost of unpaid clinical hours—up to 4,000 in some states—and the price tag soars even higher. For many, these upfront costs are simply untenable, particularly when coupled with stagnant wages in entry-level mental health positions.
As education costs skyrocket, the value proposition of a psychology degree diminishes. With tuition debt hanging over their heads, many therapists struggle to make ends meet, even after licensure.
2. Lengthy Timeline to Enter the Field
It can take 8–10 years to become a fully licensed therapist. This includes a four-year undergraduate degree, 2–3 years in graduate school, and 2,000–4,000 hours of supervised work. The lengthy timeline can be a major deterrent, especially when alternative programs allow people to begin earning income and making an impact sooner.
3. Outdated Treatment Methods
Psychotherapy has undergone a profound transformation in the last 20 years, driven by the recognition of trauma and advances in somatic therapies. These modalities emphasize the body’s role in mental health, challenging the long-standing mind-centric frameworks of traditional psychology.
Many therapists trained in conventional programs find themselves retraining later in their careers and leaving the conventional approach for these more modern, body-based therapies. Therapists are paying twice—first for their degree and then for the skills they actually need to meet modern client needs.
This highlights a larger question: why pursue an expensive, outdated education system when modern alternatives are available from the outset?
3. The Insurance System: A Double-Edged Sword
Perhaps the primary reason people pursue licensure is to bill insurance. This is not an insignificant consideration, as billing Insurance essentially guarantees therapists a steady stream of clients. But the drawbacks are significant.
Reduced autonomy:
Insurance companies dictate session lengths, treatment methods, and even the number of sessions allowed. That means you can only bill for conventional, mind-driven pysch services (primarily CBT & DBT). If you want to incorporate modern somatic techniques like breathwork, mindfulness, or emotional release, you’ll have to leave insurance anyway.
Administrative burden:
For therapists in insurance networks, administrative duties can feel overwhelming. The process of billing insurance requires extensive documentation of every session, often including detailed treatment plans, progress notes, and diagnostic codes. Therapists must also navigate constant denials, resubmissions, and follow-ups with insurance companies to get reimbursed.
These eat into time that could be spent with clients, forcing many to dedicate hours to paperwork or hire billing specialists—an added cost that cuts into their income. Therapists must regularly justify treatments to insurers, who may deny coverage for sessions they deem unnecessary, regardless of client needs. This level of micromanagement not only reduces clinical autonomy but also adds to therapist burnout, making the insurance system a significant pain point.
Low reimbursement rates:
Insurance reimbursement rates for therapists are significantly lower than private pay rates, often by as much as 30-60%, making it challenging to sustain a viable practice. Private pay rates typically range between $100-$250 per session, while insurance reimbursements often fall between $60-$120 per session.
This income disparity has led many therapists to opt out of insurance networks entirely. A 2022 study by the American Psychological Association found that only 55% of therapists accept insurance, down from previous years*. These frustrations have driven many licensed therapists to leave insurance networks altogether.
Cash-pay practices are on the rise. Therapists who go this route often earn up to three times more per session, set their own schedules, and focus on niches like couples counseling or somatic therapy that aren’t typically covered by insurance.
5. Shifts in Demand: Somatic & Trauma Therapy
There’s been a seismic shift in client demand from conventional methods to more somatic and trauma-informed therapy methods. Over 1.1 million people search on Google for somatic therapists monthly, a figure that has doubled since 2021. This creates an immense opportunity for practitioners who want to enter the field of alternative mental health services.
6. Alternative Educational & Career Paths Are Emerging
The rise of private-pay therapy and entrepreneurial mental health models has opened new doors for aspiring somatic practitioners. Private, professional training programs offer practical, trauma-informed training that’s more affordable and time-efficient than conventional degrees. There are a number of obvious benefits to this route.
Faster entry into the field: Many programs take less than a year to complete, allowing graduates to start earning sooner.
Hands-on, applied training: Unlike traditional education, which focuses heavily on theory, alternative programs teach real-world skills like somatic therapy and mindfulness-based techniques.
Freedom from insurance constraints: Graduates are equipped to work outside the insurance system, offering specialized, high-value services to private-pay clients.
What It All Comes Down To: Generating Clients
In the evolving landscape of mental health, everything boils down to one crucial factor: your ability to generate clients. If you can create a steady flow of cash-pay clients, the traditional path of earning a license—and all the financial and time costs that come with it—starts to look unnecessary.
This shift is more than theoretical. The demand is unmistakable, and those with even basic marketing and branding skills can tap into it. Many of our students, by dedicating focused effort to building their businesses, are able to fill their client books within their first year. And once you have that foundation, it’s yours for life—an invaluable skill set that puts autonomy in your hands.
Weighted against the alternative: spending 8–10 years and up to $200,000 on a conventional psychology education makes increasingly less sense when that time could be invested into training in an offering you’re genuinely passionate about, and that money could be invested into starting your own business.
Sources:
https://www.apa.org/monitor/2023/11/potential-psychology-degree-declinehttps://www.apa.org/monitor/2024/03/college-enrollment-drop-psychologyhttps://radio.wpsu.org/2021-10-20/theres-a-shortage-of-school-counselors-so-why-is-penn-states-college-of-education-closing-its-school-psychology-ph-d-programhttps://www.aamc.org/news/growing-psychiatrist-shortage-enormous-demand-mental-health-serviceshttps://www.thrizer.com/post/transitioning-to-private-payhttps://www.counselingwise.com/cash-only-therapist-practice-pros-cons/