Licensed vs unlicensed therapist

Figuring out the difference between therapists and psychologists is tricky at the best of times. Then once you overlay specialisms, it can become downright overwhelming.

Licensed vs unlicensed therapist
Wynona Jugueta


As I’m sure you are aware, there are a wide range of different specializations within healthcare, and many of them appear quite similar. Figuring out how to differentiate between therapists and psychologists, different kinds of counselors, and even the main differences between group practices and private practices can become overwhelming. This is where we can help. To assist you in your understanding of the different types of practitioners who operate underneath the umbrella of ‘therapy’, we’ve created this guide on the differences between licensed and unlicensed therapists. While there are perhaps some similarities, you will soon discover the importance of understanding why these labels are separate, and the consequences of practicing as an unlicensed practitioner. 

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Who is a licensed therapist?

A licensed therapist gains their title by being licensed by the state to provide therapy services to patients. They typically have received a Master’s Degree in social work, counseling, or psychology at a University, and have additionally completed the required amount of trainee or apprenticeship hours with a supervising therapist. Different states will have different regulations and requirements that an individual must fulfill in order to obtain their therapist license and once they have completed these, then they will be able to deliver licensed therapy services. It can take quite a long time for a person to become a licensed therapist: as we mentioned, they are required to have extensive mental health training in addition to a degree that may take anywhere between 4-8 years. Although this may seem like a lot of work, the rewards of being licensed are very fulfilling. Licensed therapists can work in group practices or as solo practitioners, and use their skills and experience to elevate practice management and deliver high-quality healthcare solutions to patients in need.

Who is a non-licensed therapist?

In comparison, a non-licensed therapist is an individual who has some training in mental health services but has not received a license from the state in which they reside. It may be that this individual is on their way to receiving a license, and is possible completing the necessary requirements and training, or they could simply have chosen an alternative career path. While both are called ‘therapists’ a non-licensed therapist is somewhat restricted in the services they can offer. They are able to conduct counseling services for patients and use techniques like CBT (cognitive behavioral therapy) or may work in a specific field, like family counseling. Understanding these differences can be confusing, especially when you take into account other mental health practitioners and the differences between counselors and therapists, but the main takeaway should be that non-licensed therapists do not have a state-issued license.

Therapists practicing without a license: Is it legal?

Now that you know the difference between a licensed and a non-licensed therapist you may be wondering whether it’s legal to be practicing without a license. The legality of operating as a therapist can be complicated, and most importantly, specific laws vary by state. Most states will have regulations in place regarding what a mental health practitioner can call themselves, as well as the services that they are allowed to offer patients. It is highly likely that wherever you are living, if a non-licensed therapist is calling themselves a therapist and offering therapy services to patients in need, then they are breaching the law. Unfortunately, managing non-licensed ‘practitioners’ can be quite difficult. This is made even more complicated when you take into consideration other mental health practitioner titles, including psychotherapy and counseling. The regulations that impact what non-licensed therapists can call themselves are constantly changing, and it’s imperative that you keep up to date with these.

Differences between Licensed vs unlicensed therapists explained

Understanding the differences between various mental healthcare practitioners is difficult, especially when you take into consideration how many titles there are: therapy, counseling, mentoring, and coaching. Although we’ve already covered the general basics surrounding the differences between licensed and unlicensed therapists, we thought we’d get into a little bit more detail. In addition to the actual licensure, there is a range of consequences and factors that help to differentiate between licensed and unlicensed therapists. These include the following:

Hours of training

Therapists who are looking to obtain their license are required to complete extensive training hours. In addition to completing a Master’s Degree, during which they will undergo therapy training, they will also be required to finish between 2000-4000 hours of training after they graduate. The specific hours that a therapist needs to complete before they achieve their license is dependent on the state that they reside and work in.

Training in mental health issues

State licensing boards also require therapists to undertake training in mental health issues before they receive their license. Most states have an exam that therapists must pass, demonstrating their ability to effectively assess and diagnose mental health disorders. This type of training ensures that the therapist has actually learned all of the skills that they will need in order to treat a patient effectively. 

Confidentiality protection

If a patient or client is being treated by an unlicensed therapist, then confidentiality laws are different. HIPAA is applicable to licensed therapists, meaning that breaches impacting an unlicensed therapist cannot be legally pursued by a client. Essentially, this means that patient protection is significantly limited if an unlicensed therapist is involved in the patient’s treatment. Further, an unlicensed therapist may be able to testify against clients in a court of law, whereas licensed therapists are bound by HIPAA and ethical guidelines to enforce confidentiality. 

Hours of supervision needed

After an individual has completed their degree, they are required (in most states) to be supervised during their training therapist hours. This means that a more experienced therapist will observe, assess, and help the trainee therapist build the skills they need to eventually operate as a solo practitioner. 


If a therapist is licensed, then they will be regulated by the state. State regulations manage various areas, including licensing, patient complaints, confidentiality requirements, and ethics. Being licensed helps to ensure that therapists fulfill their obligations to their patients and are meeting the expected ethical requirements. 

Liability insurance

As opposed to unlicensed therapists, licensed therapists are required to have liability insurance. This insurance helps to protect therapists from malpractice suits, in the unfortunate case of something going wrong at the therapy practice. On the other hand, it also offers patients another layer of protection and ensures they are being treated fairly and appropriately.


Even if a therapist is unlicensed, they may have obtained certificates that indicate certain levels of experience or knowledge in the mental health field. While these certificates may indicate important information regarding the therapist’s abilities, they do not equate to licenses and shouldn’t be taken as proof of skill. 

Continuity of education

One of the components of achieving a license is the continuation of education. Licensing boards outline various further education that licensed therapists are required to complete in order to stay updated regarding new changes or updates to the healthcare industry. By monitoring these continuations, licensing boards can ensure that therapists are constantly learning and improving.

Reimbursement of insurance

Licensed therapists can belong to many different insurance boards. This allows a greater number of patients to be seen at their practice and also helps to ensure that reimbursement is accepted for insurance payments.


If you work in the therapy field or are interested in becoming a therapist, then understanding the differences between being licensed and not being licensed is very important. At the end of the day, this decision is entirely up to you and your needs, although we would recommend pursuing the steps involved in becoming licensed. As a licensed therapist, you can give both yourself and your patients more protection while simultaneously ensuring you are as well-trained as possible. Licenses facilitate effective therapy treatment interventions, spanning from CBT to REBT, and are relevant for a range of different therapy specializations. 

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