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.

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Because psychologists tend to charge more than masterslevel therapists in private practice, we might interpret that psychologists earn more than licensed masterslevel 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).
https://www.mftcalifornia.com/estimat...

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).
https://psydprograms.org/californiap...

So conservatively, doctoratelevel therapists can expect to pay at least twice as much as masterslevel 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!
https://www.nerdwallet.com/blog/loans...
https://www.finaid.org/calculators/lo...

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 masterslevel 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.
https://www.lifepurposeinstitute.com/...

So if your endgame 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 masterslevel 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!