There are a number of websites that describe the distinction between a PhD and PsyD. For brevity let's just be clear that:
1) A PhD is a Doctor of Philosophy whereas a PsyD is a Doctor of Psychology
2) PhD students are generally trained following the scientist-practitioner model that puts greater emphasis on research than PsyD students, while PsyD students are generally trained with greater emphasis on clinical work than PhD students
3) a PhD degree is earned in 5-7 years, while a PsyD degree is earned in 4-6 years, keeping in mind that this includes 1 internship year.
Let's get back to the factors important for making a PhD-PsyD decision. The first factor you need to consider is whether you will be funded during your years in graduate school. It is typically the case that students in a PhD program receive some type of funding. This includes tuition, a stipend (a fixed sum of money paid for being a Teaching or Research Assistant), or in many cases both types of aid. This can add up to literally tens of thousands of dollars each year in financial assistance. You will not be rolling in dough, but the fact that you will not have to pay tuition alone is a big deal because it will significantly reduce any debt you might incur in graduate school. This can turn out to be very important in the sense that the amount of money you will earn as a PhD clinical psychologist may not be as high as you imagined. (Check out careersinpsych.com to see salary info.) PsyD programs, in general, are unable to provide the same type of support as a PhD program. Part of this is tied to the fact that PhD students serve as Teaching Assistants or Research Assistants, but the same is generally not true of PsyD students at a particular school. In addition, because PhD programs have far fewer graduate students than PsyD programs, schools are able to afford to support PhD students.
I feel it is important to bring up an issue that takes into account the factor of funding-the length time you will be in graduate school. As stated above, the time in graduate school is typically shorter for a PsyD student than a PhD student. In a practical sense, this means that a PsyD student is able to get out and earn a real salary (on average) a year before a PhD student. Now this is where things get a bit interesting. Say you get out of school and earn about $60,000 with your PsyD. Of course this is way more than the stipend at any PhD program; the stipend might be close to $20,000. However, the $60,000 you earn in your year out of graduate school will be needed to start paying back what could be at least $100,000 in tuition costs. To find out tuition costs for any APA accredited PhD or PsyD program, go to their website and look for the link that says Student Admissions, Outcomes and Other Data. I think you will be very surprised to see the tuition costs at both PhD and PsyD programs. As stated earlier, a PhD student will typically not have any tuition debt hanging over their head. Thus the $40,000 extra in salary for the PsyD student in the year they are working compared to the stipend of a PhD student is offset by the tuition debt the PsyD student must repay.
The second factor to think about when deciding to apply to a PhD or PsyD program involves APA accreditation, for both graduate school and internship. APA (http://www.apa.org/ed/accreditation/about/about-accreditation.aspx) states that, although graduating from an accredited program does not guarantee jobs or licensure for individuals, it may facilitate such achievement. It reflects the quality by which an educational institution or a program conducts its business. It speaks to a sense of public trust, as well as to professional quality. Based on this statement, it would be wise to search out APA-accredited programs. With regard to internships (that every PhD and PsyD student must complete), APA also notes (http://www.apa.org/gradpsych/2010/11/unaccredited.aspx) that students who take unaccredited internships are ineligible for positions with the Department of Veterans Affairs, the single largest employer of psychologists. They are also barred from civilian positions with the military. In addition, a handful of states require aspiring psychologists to have had an APA-accredited internship to be licensed, and many others require them to show that they completed the equivalent of an APA-accredited internship. Once again, there are real advantages to your ultimate employment plans by completing an APA-accredited internship. One nice thing about this second factor is that you have the ability to find out the percentage of students who received an APA accredited internship vs. non-APA non-accredited internship for any APA accredited PhD or PsyD program. Go to the program's website and again look for the link that says Student Admissions, Outcomes and Other Data. If a school does not list this information it is not APA-accredited and should be viewed with caution.
The third factor to consider is what career path you would like to follow. On the one hand, if you want to conduct research both in graduate school and beyond you should probably go for a PhD. On the other hand, if your career goals lean toward more practical work (e.g., being a therapist) with no real intention of conducting research in graduate school or upon graduation you should probably get a PsyD. There is an important caveat to this distinction, however. You might be a person who wants to conduct research in a particular area (e.g. ADHD) because you feel the research experience will help you understand a particular mental health issue. Moreover, you might hope to graduate and get a job working with individuals who reflect that research area, but you have no plans to continue your research work. In this case, a PhD is probably for you. In presenting these important factors to think about if you are choosing to be a PhD or PsyD, we of course understand that each individual has unique circumstances that must be taken in account. Still, we hope that presenting these factors gives you some food for thought as you consider your ultimate career path in clinical Psychology.