Yes, these programs are extraordinarily competitive, funding has declined and reimbursement for providers (separate from academicians, but affect training programs in clinic and hospital settings) has dropped. ITs really depressing (no pun intended).
Not sure why you think you can’t pursue a Psy.D (if you find one that has a research oriented training program) as you can get licensed in most, if not all, states. Stay away from the for-profit schools. Read the APA graduate training site for guidance on finding programs.
Many programs sill want to see som real live experience in the working world (work at a psych facility for a few years) to be considered for grad school.
It is sad to have seen these changes in my profession 